Income forecast bolsters state budget
HARRISBURG — With chatter in the state Capitol continuing to suggest a General Appropriations bill could be ready to go by week’s end, the Independent Fiscal Office on Monday offered news that most lawmakers will consider good enough to get a budget done without a tax hike — and potentially on time — this year.
The IFO’s final official revenue estimate indicates the state will end with a bit more than $34.5 billion, which is $226 million less than the IFO’s November estimate.
Most of the difference is because a federal judge blocked a $200 million transfer to the General Fund from the Pennsylvania Professional Liability Joint Underwriting Association, which provides liability insurance to physicians.
The IFO’s FY2018-19 revenue estimate has changed little from the agency’s May estimate: It is still approximately $33.9 billion, although it’s about $49 million less than what the IFO forecast early last month.
Of that projected $33.9 billion figure, $32.23 billion is from tax revenue, which represents a $1.263 billion, or 4 percent, increase from the tax revenue generated during the current fiscal year.
The overall $33.9 billion General Fund revenue total forecast by the IFO is actually a drop of roughly $607 million, or 1.8 percent, compared to the current fiscal year, but that difference is attributable to nearly $1.9 billion of one-time funding that was used to balance the current year’s budget.
But $33.9 billion isn’t what lawmakers and the governor would have available to them to spend in the upcoming budget.
House Majority Leader Dave Reed, R-Indiana, told reporters Monday afternoon that he doesn’t “think there’s going to be any new revenue to come to the table.”
If that’s the case, and if the FY2018-19 refunds figure remains as currently assumed ($1.359 billion), along with the $100 million of lapses suggested by the Wolf administration as part of the governor’s spending proposal, state lawmakers will have roughly $32.65 billion to spend.
That’s $650 million (about 2 percent) more than what was to have been spent this year.
Senate Appropriations Committee Majority Chairman Pat Browne, R-Lehigh, Monday afternoon suggested lawmakers would take yet another run at transferring the $200 million from the JUA.
However, if the current year’s $200 million JUA shortfall isn’t addressed, then lawmakers would, effectively, have $450 million, or 1.4 percent, more to spend than last year.
Reed suggested a General Appropriations bill moved by the Republican-controlled House would likely contain only modest spending growth.
“Spending — obviously there is interest here and there; education, school safety in particular,” said Reed. “I think overall it will be similar to what we had last year at least with a spending increase below the rate of inflation, which I think is a good thing.”