“Collections in August reflect a continuation of adverse trends from recent months, including relatively lower-than-expected growth in sales and income-related payments”.
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Revenue collections of $1.7 billion in August fell $42 million shy of monthly estimates used to build the state’s $38.9 billion budget for fiscal 2017, according to the Department of Revenue. “We are still experiencing the aftermath of the June flooding with businesses not being able to reopen and displaced employees without a workplace”.
After two months of the new fiscal year, the state has fallen behind in collections by $49 million, Kiss said.
Secretary of Revenue Bob Kiss said August’s $16 million shortfall can be attributed to a number of factors.
August sales tax collections – representing July sales transactions – missed estimates by $3.9 million, but that was a notable improvement over July, when sales tax collections came in $22.1 million short.
Personal income taxes totaled $1.7 billion through two months, off about $18 million so far, the department said.
Severance-tax revenue, which has nosedived amid the coal industry’s downturn and low natural-gas prices, was $16.6 million below estimates and 21.6 percent below the prior year.
“The estimates are fairly aggressive (for September)”, Muchow said. And realty transfer taxes were off about $9 million through August.
Weak tax collections in August left the Baker administration in a familiar position – managing a state budget in which revenues are not keeping pace with expectations.
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Kiss said it is probably helping that on August 1, Pennsylvania raised its cigarette tax by $1 a pack to $2.60, encouraging cross-border sales in West Virginia, where the tax is $1.20 a pack.
