WITH Governor Josh Shapiro first budget speech just weeks away, a modern report suggests the Democratic governor may want to take a measured approach to his inaugural fiscal plan.
After recovering from pandemic losses in 2020 and rebounding in 2022, experts expect annual state tax revenue growth to “decline significantly” in 2023 as state finances reach a turning point. according to the analysis By Pew Charitable Trusts.
The analysis shows that from January 2020 through the end of fiscal year 2022, most states’ tax revenue growth “exceeded their pre-pandemic growth trajectory in a record 32 states.”
At the end of the second quarter of 2022, state tax revenues peaked just before its historic collapse The analysis showed that in early 2020
Harvest in the final quarter of 2019 was 20.7% higher, adjusted for inflation and averaged over four quarters to account for seasonal fluctuations, data showed Pew analysis.
Currently, however, tax revenues “are on track for negative growth by the end of this financial year amid looming economic uncertainty,” he says Pew.
“Although higher than expected tax revenue growth, abundant federal aid and record financial reserves, budgetary conditions have recently improvedCountries face several looming challenges, including slowing income growth as the economy weakens and monetary policy tightens. historically high inflationand limiting federal aid related to the COVID-19 pandemic,” the Pew analysis indicated.
Shapiro the administration received its first signs of the state’s fiscal health earlier this month when the state Department of Revenue published the tax collection amount for January.
In January, the commonwealth collected $3.6 billion in tax revenue, up $205.6 million, or 5.5%, as expected, state data show.
Total tax collections for the fiscal year ending June 30 are $23.3 billion, or $297.5 million, or 1.3% above estimates, according to estimates Treasury Secretary Pat Browne – wrote in the statement.
Shapiroformer two-term attorney general, took office on January 17 thanks to a surplus of $5.4 billion, however, modern data from official state budget forecasters may signal tough conditions despite a vigorous balance.
First, optimism was fueled by the state’s historically low unemployment rate and falling inflation rate may be compensated by declines in the labor market, USA Today’s Pennsylvania Capital Office – it said, citing research conducted by the state Independent Tax Office.
Some other state highlights from Pew’s analysis:
- “New Mexico’s tax revenues outperformed all states, collecting 17.1% more than would have been collected had revenues remained at the state’s five-year pre-pandemic growth rate. The next states to see the largest increases in tax revenue compared to pre-pandemic growth trends were Idaho (16.7%), New York (14.0%), Illinois (10.8%), Utah (10.5%). and Montana (10.1%)”;
- “Only Wyoming fell short of generating sufficient revenue to return to pre-pandemic levels, much less catch up to pre-pandemic growth trends. Since the beginning of the pandemic, states dependent on natural resources have seen some of the steepest declines in tax revenue. However, these states have recently seen a sharp turnaround, with stronger growth in tax revenues, largely due to rising energy prices,” i
- “At the start of fiscal year 2022, most states (32) were below pre-pandemic growth trends. However, almost half (14) of these states have passed this milestone in the last four quarters: Alabama, Arizona, Connecticut, Florida, Indiana, Massachusetts, Missouri, New Jersey, North Carolina, Pennsylvania, Rhode Island, South Carolina, Virginia and Virginia Western.
