Budget Season Place Setter: Pa. collected $3.3B in taxes in May

(Photo by Joe Raedle/Getty Images)

The state House and Senate return to session this Monday to start the 25-day sprint to the June 30 deadline to pass a new state budget. And they’ll be doing it with the latest tax collection data in hand.

The commonwealth collected $3.3 billion in general fund tax revenue in May. That's $46.1 million, or 1.4%, less than anticipated, according to state Revenue Department data released late last week.

Year-to-date tax collections total $41.2 billion, which is $1.2 billion, or 2.9 percent, above estimate, state data indicated.

As we’ve noted before, this stew of numbers matters because how much money the state will have on hand when the current fiscal year ends on June 30 will be a major driver in the negotiations leading to the approval of the fiscal 2023-24 budget, which is supposed to be in place by July 1.

While they haven't been as openly hostile to Democratic Gov. Josh Shapiro's $44.4 billion spending blueprint as they have been during past budget cycles, legislative Republicans have nonetheless been sounding cautionary notes about the state's long-term financial health.

"First and foremost, this is not the time to spend beyond our means," Rep. Seth Grove, of York County, the ranking Republican on the House Appropriations Committee, said in mid-May.

"Since the initial spike in revenue starting in 2021 – stemming from the first round of federal stimulus checks which reached most Americans by January 2021 – General Fund incoming dollars have slowed," Grove said in a statement. "From the Personal Income Tax withholding to Sales and Use Taxes, and the Realty Transfer Tax, Pennsylvania state government needs to focus on saving, and not increasing our spending."

Below, a look at the state's May collections, by major category.

Sales Tax: Sales tax receipts totaled $1.1 billion for May, coming in $49.2 million below estimates. Year-to-date sales tax collections totaled $12.8 billion, which was $178.5 million, or 1.4% more than anticipated, according to the Revenue Department.

Personal Income Tax: Income tax revenues totaled $1.3 billion in May, which was $8.6 million above estimate. That brought the year-to-date total to $16.2 billion, which was $397.8 million, or 2.4% behind estimates.

Corporate Taxes: May's corporate tax collections totaled $445.4 million, which was $28.5 million below estimates, according to state data. Year-to-date corporate tax collections totaled $7.7 billion, which was $1.1 billion, or 16.9% ahead of estimates.

Inheritance Tax: Inheritance tax collections totaled $131.4 million last month, which was $14.1 million above estimate. That brought the the year-to-date total to $1.4 billion, which was $50.5 million, or 3.8% above estimates, according to the Revenue Department.

Realty Transfer Tax: Realty transfer tax revenue was $50.3 million for May, which $13.9 million below estimates. That brought the year-to-date total to $579.2 million, which was $109.3 million, or 15.9% less than anticipated.

Other General Fund Revenue: Other revenues, including cigarette, malt beverage, liquor and gaming taxes, totaled $167.3 million for the month, which was $21.9 million below estimates. That brought the year-to-date total to $1.5 billion, which was $9.3 million, or 0.6% below estimates.

Non-Tax Revenue: These collections totaled $82.4 million for the month, $44.6 million above estimates, bringing the year-to-date total to $1.1 billion, which is $331.5 million, or 45% above estimate.

Motor License Fund: The Motor License Fund received $280.8 million for the month, which was $27.2 million below estimates. Year-to-date collections for the fund – which includes gas and diesel taxes, as well as other license, fine and fee revenues – totaled $2.7 billion. That's $38.8 million, or 1.5% above estimates, according to the Revenue Department.

by John L. Micek, Pennsylvania Capital-Star June 5, 2023

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A 3-decade veteran of the news business, John L. Micek is the Pennsylvania Capital-Star's Editor-in-Chief. An award-winning political reporter, Micek's career has taken him from small town meetings and Chicago City Hall to Congress and the Pennsylvania Capitol. His weekly column on U.S. politics is syndicated to 800 newspapers nationwide by Cagle Syndicate. He also contributes commentary and analysis to broadcast outlets in the U.S., Canada and the U.K. Micek's first novel, "Ordinary Angels," was released in 2019 by Sunbury Press.