June 12, 2012 | By | Posted in General News

PA: Fiscal Office sets final parameters for budget battle

Confirms previous estimate of $27.5B in revenue
By Jared Sichel | PA Independent
HARRISBURG Pennsylvania’s Independent Fiscal Office confirmed its revenue estimates for the current budget year at $27.54 billion, setting the playing field for the final three weeks of the state budget battle.
At present, next year’s budget bill would spend about $27.6 billion.

Gov. Tom Corbett has called that figure a “ceiling” and is pressuring lawmakers to bring the total back down toward his budget proposal in February that called for a $27.1 billion spending figure.
The IFO — a new body designed to be a counterweight to Corbett's Budget Office when it comes to make revenue estimates — said on May 1 that the state would collect about $27.5 billion in revenue this year, emboldening Democrats who wanted to spend more than Corbett’s plan.
The state Senate passed a bipartisan budget at $27.6 billion, which is awaiting action in the state House, where lawmakers and the administration are haggling over line items.
Tax revenue in May and estimates for June were used by the IFO in confirming its initial projection of $27.5, which was made May 1.
Now, the power might shift toward those who want to spend less, since the IFO projection did not increase after another month of data was available – and projected a $48 million decline over its estimated revenue totals for next year.
Corbett repeatedly has said the state will not spend more than it takes in, and is pushing for a lower figure, though he acknowledged Tuesday that he’s open to spending more than $27.1 billion.
House Democrat spokesman Bill Patton said he expects the Republicans to consider the IFO’s new estimate when crafting the new budget.
“The majority GOP party that is engaging in the budget negotiations is the same one that pushed for the formation of the IFO,” Patton said. “It would be nonsensical for them to disregard the IFO’s data at this point.”
The IFO’s fiscal 2012-13 estimate for general fund revenue is $28.6 billion, 3.8 percent higher than the previous fiscal year’s collections, but $48 million lower than the May 1 initial estimate.
IFO Director Matthew Knittel attributed the revised estimate to “weakness in Europe as well as from the uncertainties of U.S. fiscal policy.”
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