HARRISBURG, PA — Pennsylvania collected $3.4 billion in General Fund revenue in May, surpassing expectations by $86.4 million, or 2.6 percent, according to Revenue Secretary Pat Browne. This brings the fiscal year-to-date General Fund collections to $41.8 billion, exceeding projections by $825.7 million, or 2.0 percent.
“Our revenue collections are in a very strong position with one month to go in the current fiscal year. We are anticipating that we’ll close the fiscal year with a sizable surplus,” said Secretary Browne. “Given our current financial position, we now have an opportunity to make the critical investments in Governor Shapiro’s budget proposal that will improve the lives of Pennsylvanians across the Commonwealth.”
Breakdown of Revenue Sources
- Sales Tax: Sales tax receipts for May totaled $1.2 billion, $117.1 million above estimate. Year-to-date, sales tax collections have reached $13.0 billion, which is $199.7 million, or 1.6 percent, more than anticipated. The increase is due to stronger-than-expected April activity and changes in filing frequency.
- Personal Income Tax (PIT): PIT revenue for May was $1.3 billion, surpassing estimates by $10.6 million. However, year-to-date PIT collections stand at $16.3 billion, falling short by $146.8 million, or 0.9 percent.
- Corporation Tax: Corporation tax revenue for May was $391.5 million, which is $97.9 million below estimate. Despite this, year-to-date corporation tax collections total $7.6 billion, exceeding estimates by $234.3 million, or 3.2 percent. The May shortfall offsets April’s overage.
- Inheritance Tax: Inheritance tax revenue for May was $146.9 million, $18.1 million above estimate. The year-to-date total is $1.5 billion, exceeding estimates by $155.4 million, or 11.4 percent.
- Realty Transfer Tax: Realty transfer tax revenue for May was $51.5 million, $3.7 million above estimate. Year-to-date, this tax has generated $478.9 million, surpassing estimates by $17.2 million, or 3.7 percent.
- Other General Fund Taxes: Revenue from other General Fund taxes, including cigarette, malt beverage, liquor, and gaming taxes, totaled $185.5 million for May, $8.0 million below estimate. Year-to-date collections stand at $1.4 billion, which is $74.1 million, or 5.1 percent, below estimate.
- Non-Tax Revenue: Non-tax revenue for May was $81.6 million, $42.8 million above estimate. Year-to-date, non-tax revenue has reached $1.5 billion, exceeding estimates by $440.1 million, or 40.3 percent, driven largely by higher-than-expected Treasury receipts.
Motor License Fund
The Motor License Fund collected $311.3 million in May, which is $2.0 million below estimate. Year-to-date collections for this fund, which includes gas and diesel taxes as well as other license, fine, and fee revenues, total $2.9 billion, exceeding estimates by $6.1 million, or 0.2 percent.
Pennsylvania’s Economic Potential
This robust revenue growth is significant for several reasons:
- Financial Stability: Surpassing revenue projections indicates a stable and growing economy. This stability allows for strategic planning and investments that can benefit the state’s residents.
- Budget Surplus: With a likely surplus at the end of the fiscal year, Pennsylvania has the financial flexibility to invest in critical areas outlined in Governor Shapiro’s budget proposal. These investments could include education, infrastructure, and healthcare, directly impacting the quality of life for Pennsylvanians.
- Economic Growth: The increase in sales tax and non-tax revenue suggests heightened consumer spending and economic activity. This reflects positively on the state’s overall economic health.
Future Considerations
The positive revenue trend provides a cushion for future fiscal planning. It also presents an opportunity for policymakers to address long-term challenges and invest in sustainable projects. As the state continues to navigate economic uncertainties, maintaining robust revenue streams will be key to its resilience.
In conclusion, Pennsylvania’s stronger-than-expected revenue collections paint a promising picture for the state’s financial health. With a fiscal year-end surplus on the horizon, the state is well-positioned to make impactful investments that could drive growth and improve the lives of its residents.
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