Flagging Pa. tax revenues could revive with spring

Revenue from tax collections in Pennsylvania are running below expectations, putting a lot of focus on revenue reports in the coming months.

Monthly state revenue reports start getting more attention right around this time of year in the Capitol — when the state budget plan is at the forefront of lawmakers’ minds.

The February report marked the third time monthly revenues came in below estimate. So far this year, the state is about half a percent behind.

If one subset of tax revenues is going to bring the state back into the black, it’s more likely to be corporation taxes and sales taxes, according to the state Independent Fiscal Office, which offers nonpartisan analysis.

Personal income taxes probably won’t provide a game-changer, said Matthew Knittel, director.

“It’s very difficult for personal income tax to pick up quickly because it depends on labor market conditions — hiring,” he said Thursday. “But for corporate income, there have been times where we’ve received an unexpected large amount of revenues that were unanticipated.”

There’s reason, however, to hold out some hope for a turnaround.

It appears the harsh winter is at least partly to blame for lower than expected sales tax revenues, which could rebound with warmer weather, Knittel said.

In addition, the state typically collects a large amount of its tax revenues in March and April.