Size of Pennsylvania budget surplus may be less important than whether it actually exists

While state leaders are heading into budget season with a projected general fund surplus of $866 million, some who follow state budgeting say the number paints a too rosy picture.

The projection of the extra revenue came last month from the Independent Fiscal Office, which cited unanticipated major inflows of corporate net income taxes and sales-and-use taxes. The state requires that a use tax be paid when a consumer buys a taxable item from a seller who does not collect the tax.

But observers at the Pennsylvania Budget and Policy Center and the Commonwealth Foundation, generally viewed as occupying opposing ends of the political spectrum, said in separate interviews the numbers are illusory.

“I think the jury is still out on how much of a surplus we really have,” PBPC Director Marc Stier said. Foundation Director of Policy Analysis Elizabeth Stelle said, “Most of that surplus has already been spent on current year spending.”

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