Governor Wolf’s strong fiscal management allows us to deliver for Pa.

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C. Daniel Hassell

Only two years ago this month, the COVID-19 pandemic first reached Pennsylvania and threw a hammer on the financial health of our Commonwealth. In the summer of 2020, what had been a modest surplus of General Fund income in February fell to a loss of $3.2 billion at the end of the year in June. At the time, the stark reality was that the virus that had upended our lives had also put Pennsylvania’s fiscal health on shaky ground.

Continued:Wolf: Moving Pa. forward with a balanced budget and smart investments in what matters most

Thankfully, we live in a much different world today – and that turnaround also applies to the funds pouring into Commonwealth coffers. Thanks to Governor Tom Wolf’s strong fiscal management, an injection of stimulus money from the federal government and a recovering economy, we are in a strong position as we work to craft a budget for the next fiscal year. . Revenues collected for the current year are $2 billion higher than forecast and this surplus is expected to increase in the coming months. There are also indications that our economic recovery will continue.

The economic forecasting firms that our department consults to develop our tax revenue estimates and forecasts predict continued economic growth. Other important barometers of our financial health are the Commonwealth’s two main sources of revenue: personal income tax and sales tax. Revenue collections for both taxes continue to be very strong each month, supported by higher wages and continued consumer spending.

Historically, these are stable sources of income that produce gradual growth and are less susceptible to sudden fluctuations. It is also important to note that the trend of strong consumer spending continued despite the fact that the stimulus payments that millions of Americans were receiving from the federal government expired for most families.

Additionally, economists have observed that there is pent-up demand among many consumers affected by the pandemic. This means that we are likely to see strong economic activity in the spring and summer, as people can travel safely again and resume many of the activities that have been suspended for the past two years.

Continued:Wolf asks GOP-led Legislature to spend PA federal aid as he proposes $1.8 billion increase for education

These are all factors that are factored into Governor Wolf’s budget plan, which is balanced against available recurring revenue from the general fund and does not rely on one-time funding sources. In fact, if the Governor’s proposed budget were implemented in full, there would still be a surplus of $3.3 billion at the end of the 2022-23 fiscal year. This would be in addition to the $2.87 billion from the Commonwealth’s Rainy Day Fund, which serves as a safety net to help meet the economic challenges ahead.

In other words, now is the time to make the historic investments that Governor Wolf is calling for in his budget proposal, including for education and our workforce. In return, we have the ability to use $1.7 billion in US Federal Bailout Act dollars to fund a variety of programs that will provide immediate relief to those in need.

We have a real opportunity this year to ensure Pennsylvania continues to be a great place to live and work. Supporting the Governor’s budget proposal will help us take action for the people of Pennsylvania.

C. Daniel Hassell is Secretary of Revenue for the Commonwealth of Pennsylvania. He has over 40 years of experience in Pennsylvania government.


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