Pennsylvania’s tax surplus grew by another $34 million dollars in May, and now sits at nearly $540 million. Strong sales and corporate tax revenue came in well over projections, augmenting a deficit in personal income tax returns.
Democratic lawmakers say the increase gives added momentum to their argument for a larger budget.
Governor Corbett and House Republican leaders want to hold the extra cash in reserve, while most Democrats, including the party’s Appropriations Chair, Joe Markosek, have argued for months that it should lessen proposed cuts. He’d use the money for “Education, certainly,” but also, “Long-term care for our frail and chronically ill senior citizens. And certainly additional restoration of the funding cuts for the handicapped population in Pennsylvania.”
Not every Democrat agrees, though. Auditor General Jack Wagner said the Republican plan to put the money in the depleted Rainy Day Fund is the right call, pointing to billions of dollars in debt and overdue bills. “Our commitment – our additional commitment to SERS and PSERS going forward is simply in the next couple years – is in the billions of dollars. The Pennsylvania Employee benefit trust fund is owed two to three billion dollars,” he said, warning other “fiscal unknowns” may rise in the coming year, as well.
Marksosek is confident the surplus will grow even larger, once June revenue comes in. “We still have one month to go, and my econometric staff folks tell me that all expectations, based on past history, etc, is the June is shaping up to be at least a fairly strong month. So I don’t think the $540 million figure will shrink,” he said.
The House passed its budget next week, and the next round of action will come in the Senate. Markosek says he’s been in touch with Senate leaders, but no formal budget negotiations have been scheduled.