Mid-Year Budget Briefing: Revenues Estimated To Be $450 Million Short of Mark
December 16, 2009
With the recession continuing to take a toll on Pennsylvania's tax revenues, the Commonwealth is poised to end another fiscal year with less revenue than expected, prompting Governor Ed Rendell to make additional cuts to the 2009-10 budget.
The Rendell administration is estimating that the Commonwealth will have a $450 million shortfall in 2009-10 revenue collections. Various fund transfers allowed the state to start the fiscal year with $354 million in the bank, but even after using those funds, revenues will be $96 million short of estimate. And the 2009-10 budget is dependent on $250 million in revenue expected to be generated from yet-to-be-approved legislation to authorize table games in state casinos. Without that legislation, the state will be facing a deeper revenue shortfall.
Revised 2009-10 General Fund Balance Sheet
|
|||
| (in $ thousands) | |||
| 2008-09 | 2009-10 Original | 2009-10 Revised | |
| Beginning Balance | $585,296 | ($2,030,416) | ($2,030,416) |
| Revenues | |||
| Revenue Receipts (net of refunds) | $24,304,806 | $24,274,400 | $24,274,400 |
| Expected Revenue Shortfall | - |
- |
($450,000) |
| Recurring Revenue Changes | - | $695,500 | $695,500 |
| One-Time Revenues | - | $2,342,951 | $2,342,951 |
| Table Game Revenue | - | $250,000 | $250,000 |
| Federal Stimulus Received (FMAP and Fiscal Stabilization) | - | $2,621,179 | $2,621,179 |
| Plus: Prior Year Lapses | $163,837 | - | - |
| Funds Available | $25,053,939 | $28,153,614 | $27,703,614 |
| Expenditures | |||
| Appropriations (State Funds) | $28,264,430 | $25,178,679 | $25,178,679 |
| Supplemental Appropriations | ($712,213) | - |
- |
| State Spending Supplanted by Federal Fiscal Relief | |||
| FMAP Increases | - | $1,699,795 | $1,699,795 |
| Fiscal Stabilization | - | $921,384 | $921,384 |
| Less Current Lapses | ($467,862) | - | - |
| Total Expenditures | $27,084,355 | $27,799,858 | $27,799,858 |
| Ending Balance | ($2,030,416) | $353,756 | ($96,244) |
The economic downturn has hit the state's two biggest revenue streams hard. Sluggish consumer spending has resulted in lower-than-expected sales tax revenue, while high unemployment and stagnant incomes have cut into personal income tax revenue.
Governor Rendell said at a mid-year budget briefing December 15 that he will make additional budget cuts that will produce a $124 million year-end surplus. These include $170 million in budget cuts - with $100 million coming out of "discretionary grant programs" and another $70 million coming from a 1% across-the-board cut to agency operating costs and grant programs. In addition, $50 million in unused prior-year funds will be carried over.
More details on the planned cuts are expected in the coming weeks.
