Pennsylvania Sen. Jake Corman, R-District 34, Wednesday said the Senate would not act on a fiscal 2011 budget bill until mid-May, but warned of another budget stalemate if Democratic leaders propose tax hikes to help balance next year’s spending plan.
While the House on March 23 passed Gov. Edward Rendell’s $29 billion fiscal 2011 budget proposal — which does not raise or create any new taxes — Corman said the Senate would oppose any potential tax-increase initiatives in light of underperforming revenues in the current fiscal year. The governor and the House have not proposed any such plan to raise additional revenue in fiscal 2011.
The governor Wednesday announced that July 2009 through March 2010 revenue collections could come in $750 million below budgeted estimates, including March revenues that officials expect to be $273 million below projections. The state is set to release final March tax receipts Thursday.
The Rendell administration said $275 million of additional federal Medicare funds will help offset those sluggish revenue streams. In addition, the state has yet to collect April tax receipts, historically its biggest revenue month.
“With the significant revenue month of April just ahead, it is important to wait and see how the major tax category collections come in before we make assumptions about end-of-year revenues,” Rendell said in a prepared statement.
Conversely, Corman believes the state will have a $1 billion revenue shortfall by June 30. The senator, who chairs the Appropriations Committee, also said that in light of those sluggish revenues, Rendell’s projected 3.2% growth for fiscal 2011 may be too optimistic and lawmakers will need to scale back on next year’s $29 billion budget proposal since the state may not produce enough revenue to support such a spending plan.
Corman said the fiscal 2011 budget plan should be reduced to roughly $28 billion, a size similar to this year’s budget.
If Democrats suggest tax hikes to help balance next year budget, Corman said that would delay final passage. Pennsylvania lawmakers have not passed a budget by the June 30 deadline in seven years.
“Everyone’s got the right spirit to get it done, but it’s going to come down to the same discussion,” Corman said in a press conference Wednesday. “If the governor and the House want to hold on to raise taxes like it did last year, yes, it could last awhile. If they’re going to embrace rethinking state government and trying to reduce the government’s spending as we ultimately got to last year, then I think we’ll get it done in a reasonable time.”
Neither the governor nor the House has proposed a tax hike to help balance the fiscal 2011 budget. In addition, the House has yet to take up Rendell’s proposal to expand the state’s sales tax and its corporate tax to help fill projected deficits beyond fiscal 2011, initiatives that he released along with his fiscal 2011 budget plan. Rendell will leave office in January, after serving two terms.
Corman said the Senate will not vote on a fiscal 2011 budget bill until after April revenue collections come in and officials can see how May collections are performing.
“I wouldn’t imagine we’d do anything until we at least get a sense of where the May numbers are going to go just for the sake of making responsible assumptions in putting a budget together,” Corman said. “So I would say mid-May, hopefully, we will have a good idea where the revenues are going and all four caucuses and the governor will agree on something that can move Pennsylvania forward.”
Rendell signed a $27.8 billion fiscal 2010 budget on Oct. 9, yet that budget assumed lawmakers would finalize a measure to expand gambling and fill a $250 million revenue gap. The legislature passed that table games bill in early January, ending the fiscal 2010 budget process seven months after the start of the fiscal year.