Things are looking up for Pennsylvania’s year-end deficit, due to higher than expected tax revenue collections in March and April. With that in mind, the Corbett administration is waiting to see if the indicators of an economic recovery are lasting. So far, the state’s shortfall is about $288 million. Back in December, the Corbett administration predicted it would be a $719 million deficit by the end of the fiscal year in June.
So, what does that mean for next year’s budget?
Department of Revenue Secretary Dan Meuser says his office will wait until tax collections for May are in before making any changes to revenue estimates. “We do expect some positive impact on 2012 and 2013, but at this point, the level of positive impact is yet to be determined. We’ll know a lot more in two to three weeks.” The state’s Independent Fiscal Office, which provides apolitical economic analysis, says the economy does appear to be recovering. But wild cards remain. Sales and use taxes have been coming in higher, for example, but some say the unusually warm weather has caused a short-lived burst in consumer spending.