State finances hit hard by pandemic

Pennsylvania ended the fiscal year as July started with a $3.2 billion shortfall. According to an analysis by Spotlight PA, revenues fell 9% below official estimates as the state grappled with the economic damage caused by COVID-19.

The state saw a nearly 44% drop year-over-year from April through June for sales tax revenues, from about $247 million collected in 2019 to about $139 million collected in 2020, the York Dispatch reported in late July. Officials with the Pennsylvania Department of Transportation estimated nearly $1 billion in losses as gas and diesel tax revenues contracted, according to WPMT, a TV station in York.

Since March, when Gov. Tom Wolf announced measures to slow the spread of virus, “widespread business closures and record job losses have chipped away at the tax revenues Pennsylvania relies on to pay for crucial services,” Spotlight PA said.

In June, revenues dropped 18% below estimates, with three-quarters of the shortfall attributed to fallout from the virus. Although Pennsylvania received almost $4 billion in federal COVID-19 relief funds, federal regulations prohibit that money from being used to make up for revenue shortfalls, Spotlight PA reported.

Pennsylvania collected $2.5 billion in General Fund revenue in August, which was $209 million, or 8.9 percent, more than anticipated, the state Department of Revenue said in a news release.

The state Department of Revenue attributed the figure in part to postponing deadlines for paying certain state taxes.


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