No Severance Tax Causes $70 Million State Budget Shortfall, Pay Raises?
In August Gov. Rendell said he would use $70 million in revenue from a Marcellus Shale natural gas severance tax to help make up for the $280 million shortfall caused by reduced federal appropriations for Medicaid Funding.
The Department of Revenue reported state tax collections were down in October and there may be little hope the gap would be made up by increased revenues.
The state collected $1.8 billion in General Fund revenue in October, which was $57.3 million, or 3.2 percent, less than anticipated. Fiscal year-to-date General Fund collections total $7.6 billion, which is $18.5 million, or 0.2 percent, above estimate.
"October revenue collections provide a sobering reminder that the economy is not yet out of the woods and that the recovery may in fact be slowing," said Sen. Jake Corman (R-Centre), Majority Chair of the Senate Appropriations Committee.
The state's next proposed budget will be presented to the General Assembly the first week in March by Gov.-elect Corbett.
The overall General Fund budget deficit for next fiscal year is expected to be between $4 and $5 billion.
Automatic Pay Raise
And in the middle of the state's ongoing budget crisis, it was announced legislators, judges and top officials in executive agencies are eligible for a 1.67 percent cost of living pay raise in 2011 thanks to a 1995 law making the increases automatic.
NewsClips: Top PA Officials To Get Automatic Pay Raises
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