Rumblings of low tax collections shake up lawmakers

Lawmakers and the governor’s office are bracing themselves for a depressing revenue report on the year’s most crucial month for state tax collections. The official report on the state’s tax revenue haul in April won’t be out until Thursday, but already people are dreading it. April is a crucial month for revenue – if collections come in below estimate, it bodes poorly for budget balances. “I think the bottom is about ready to drop out of revenues and its coming to a theater near all of us,” said Drew Crompton, chief of staff and spokesman for Senate President Pro Tem Joe Scarnati. He spoke at a Monday event hosted by the Pennsylvania Business Council and Pennsylvania Manufacturers’ Association. Lawmakers could be facing a gap of $400 million – and that’s just for the current fiscal year ending in two months. The projected gap for the next budget year beginning in July is even bigger – as high as $800 million. “So it is particularly dreary,” Crompton said. “It is more dreary than I think people — anyone — expected it to be, and therefore creates challenges that we already knew we had and makes them probably three or four times more challenging. “The glimpse of the April revenues haul is bad news for Gov. Corbett’s proposed budget, which includes a number of funding increases, many for education programs.At an unrelated event Tuesday, Corbett said he was aware of April collections. “We’re taking a look at it,” he said. How big a deal are the tax revenues that come in April, anyway? Lower-than-expected April collections don’t necessarily spell doom for the entire current fiscal year, Crompton said – but an expected deficit of $400 million for entire year just might, said Crompton. “May revenues are small, so it is not likely we will make up much money in May. June revenues are not small — they’re the third-biggest collection month of the year,” Crompton said. “But quite frankly, if we’re talking $400-plus million to end the balance, you’re obviously not going to come anywhere near making a big dent in, even if you have a good month, of June.”