It's too early to panic, but a second straight difficult budget year could be shaping up for Gov. Ed Rendell and the state Legislature.
For the fourth month in a row, the state Revenue Department said yesterday, revenue collections for fiscal 2009-10 have fallen below projections.
Last month, the state collected $1.6 billion in General Fund revenue, or almost $57 million less than expected. For the first four months of the current fiscal year (July-November), revenue totalled $10.4 billion, which is $217 million below estimates.
The state plans to spend $27.8 billion by the end of the fiscal year June 30, and if revenue collections don't soon pick up, another deficit seems likely, unless more painful spending cuts are made.
The previous fiscal year ended June 30 with a whopping $3.25 billion deficit, forcing the Legislature and Mr. Rendell to reduce spending by cutting many programs, closing some historic sites, laying off more than 700 state workers and wiping out some one-time revenue sources, such as the $750 million Rainy Day Fund and a $700 million fund that helped doctors pay their malpractice insurance.
The difficulty in balancing the budget caused legislators to miss the July 1 budget deadline by 101 days.
Mr. Rendell has said he doesn't foresee any growth in state tax revenues this fiscal year, even though the recession seems to be slowly ending. But so far, not only has there been no growth in revenue from the sales tax, the personal income tax and corporate taxes, there has been a continued decline.
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