State revenue projection could prove to be inaccurate, if history is guide

(Harrisburg) — The budget recently signed by Governor Corbett, relies on some one-time funding sources, plus assumed savings, but some are wondering if more problems are ahead, on the other side of the equation.

Revenue came in lower than expected in the fiscal year that ended June 30th, leaving lawmakers with a $1.4 billion deficit to close.

As for next year, the Independent Fiscal Office estimates growth of about three percent, including a five percent jump in income tax collections.

But political science professor Chris Borick, Director of the Muhlenberg College Institute of Public Opinion, says he’s not sure how much you can trust the numbers.

“And I think we’ve seen that in the last few budget cycles. It’s not just a one time deal. We’re starting to see this more regularly. Which really does push, and it should be more pressure to make these things act more in accordance with what really happens rather than what is hoped for.

Borick says it’s always the opposing party that questions rosy revenue estimates, and Democrats may push for changes this time.

Matthew Knittel, Director of the Independent Fiscal Office, says revenue projections have been off because no model could predict the type of economic recovery Pennsylvania and the U.S. is experiencing.

He says when conditions stabilize, forecasts may become more reliable.

“That hasn’t worked. The current recovery is very, very different from prior recoveries and we’re trying to pin down why that’s the case and when we can expect the decent growth we’re hoping for.”

Knittel says he doesn’t see the situation as systemic, but calls this uncharted territory.

Governor Corbett’s office did not respond to multiple requests for comment for this story by deadline.