The Patriot-News reports that state tax collections dropped this year, the third time that’s happened in the last six years. “Total general fund revenue collections were $28.607 billion, down $39.8 million from the $28.647 billion collected in 2012-13, according to preliminary state Department of Revenue figures.”
Why did this happen? A few factors:
• A federal tax increase in 2013 compelled some taxpayers to report income in 2012, creating a one-time bubble then and loss of revenue now.
• Slow job growth in Pennsylvania held back income tax revenue.
• Real estate taxes also fell short of projections.
Despite that drop, the paper notes: “Pennsylvania’s elected officials have placed a strong bet on that rebound: The $29.1 billion general fund budget now under review by Gov. Tom Corbett relies on tax growth projections of 3.5 percent.” So it’s possible we’ll meet here next year for this same conversation.