It's officially time to panic.
When the March tax revenue collection numbers were released showing a $243 million shortfall, Gov. Ed Rendell said there was no need to panic. The numbers in April, which is one of the best months for tax revenues, would rebound, Rendell promised.
This is what Rendell said after the March numbers were released and the state's budget shortfall reached $719 million.
"With the significant revenue month of April just ahead, it is important to wait and see how the major tax category collections come in before we make assumptions about end-of-year revenues," Rendell said. "At this point it would be premature to deviate from the plan that I have already presented to balance the budget.
Well, the April numbers were released Monday ... and it's worse than anyone anticipated.
When it comes to fiscal matters, Rendell couldn't hit water if he fell out of a boat.
Pennsylvania collected $2.9 billion in General Fund revenue in April, which was $390 million, or 11.8 percent, less than anticipated, according to Secretary of Revenue C. Daniel Hassell.
Fiscal year-to-date General Fund collections total $22.8 billion, which is $1.1 billion, or 4.6 percent, below estimate, Russell reports.
Rendell was conspicuously silent after the release of the April numbers, leaving it to his underlings to explain how screwed up things are in the state.
"Revenues continued to deteriorate during the major tax collection month of April," Budget Secretary Mary Soderberg said in a press release. "We will have to develop options to address the shortfall to be able to enact a balanced budget for FY2010-11. It will require difficult choices by all involved in state government,"
Grasping for straws, Hassell and Soderberg pointed out that $100 million the state had budgeted to receive by April from casino operators for one-time table games license fees was not yet submitted, but should arrive by June 1, as required by statute.
That makes the $390 million April shortfall and the $1.1 billion year-to-date figure appear worse than they actually are by $100 million. The state faces at least a $1 billion deficit for the 2009-10 fiscal year, according to the dynamic duo.
How bad is the Rendell Administration's math?
In February, the year-end deficit was projected to reach $525 million. Two months later, the year-to-date shortfall (not counting the expected table games fees) is $1 billion.
Pennsylvania finished the 2008-09 fiscal year with a $3.25 billion deficit, which means Rendell will have spent $4.25 billion more than the state took in over the past two years. That's an achievement only Barack "Red Ink" Obama would be proud of.
From the Department of Revenue:
Pennsylvania's April corporation tax collections showed the most severe shortfall among tax categories. Revenue of $436.9 million was $147.4 million below estimate. Year-to-date corporation tax collections total $4 billion, which is $430.6 million, or 9.8 percent below estimate.
Sales tax receipts totaled $708.5 million for April, $26.7 million below estimate. Year-to-date sales tax collections total $6.6 billion, which is $342.9 million, or 4.9 percent less than anticipated.
Personal income tax (PIT) revenue in April was $1.4 billion, $128.6 million below estimate. This brings year-to-date PIT collections to $8.2 billion, which is $264.5 million, or 3.1 percent below estimate.
For more on the lousy tax revenue numbers, click on the link below:Pennsylvania Revenue Department Releases April Collections
For another perspective on the state's fiscal woes, check out, "Maybe Gov. Rendell Needs to Listen to Different Advisers," at POLICY BLOG
Labels: Debt, Government Spending, Pennsylvania Legislature, Rendell, Taxes