Independent Fiscal Office

The IFO will present a revenue and economic update for FY 2020-21 on October 29 at 10 am. The update will be based on revenues received for the first four months of the fiscal year and the latest state economic data. See the announcement for a link to register for the presentation.

The October edition of our Monthly Economic Update includes links to recent articles and reports that provide insight into state or national economic, demographic and fiscal trends. 

This research brief presents data on Pennsylvania economic development incentives for fiscal years (FY) 2014-15 through FY 2019-20. The tables provide annual detail on tax credit utilization or awards, state spending or grants, job training programs and state loan programs. The brief also highlights recent changes to incentive programs spending or utilization.

This research brief uses newly released IRS tax data to examine how the Tax Cuts and Jobs Act of 2017 impacted Pennsylvania federal income taxpayers. The analysis finds that tax law changes likely reduced federal income taxes by roughly $8.5 to $9.0 billion. 

This research brief was originally posted on October 2 but was updated and reposted on October 13 so that refundable tax credits and certain miscellaneous taxes (AMT and net investment tax) are reflected in average tax rate and estimated tax cut computations. Previously, those amounts were itemized separately.

The Commonwealth collected $3.26 billion in General Fund revenues for September, an increase of $76.7 million (2.4%) compared to September 2019.

Section 604-B (a)(2) of the Administrative Code of 1929 specifies that the Independent Fiscal Office (IFO) shall “provide an assessment of the state’s current fiscal condition and a projection of what the fiscal condition will be during the next five years. The assessment shall take into account the state of the economy, demographics, revenues and expenditures.” This report fulfills the demographics obligation in advance of the IFO’s release of the Economic and Budget Outlook for Fiscal Year 2020-21 to 2025-26. In prior years, the information contained in this report was presented as an individual section within the IFO’s Five-Year Economic and Budget Outlook.

This report examines the performance of IFO revenue estimates for the past eight budget cycles.

This report provides revenue distributions based on the FY 2020-21 projections contained in the Official Revenue Estimate published by the IFO on June 22, 2020. They reflect the statutory changes that were enacted with the FY 2020-21 state budget.

This report for the second quarter of 2020 uses data collected by the PA Department of Environmental Protection to develop statewide and county-level tabulations of production volume and well counts.

Director Matthew Knittel provided a brief economic and revenue update to members of the Senate Appropriations Committee (Democrat).

In response to a legislative request, the Independent Fiscal Office examined how the COVID-19 pandemic and mandated business closures could impact local earned income taxes (EIT), property taxes and gaming revenues received by municipalities, counties and school districts for the current year.

Revenue Analyst Jesse Bushman made a presentation to the Center for Energy Policy and Management at Washington & Jefferson College regarding regional natural gas trends and how they are affecting the state's Impact Fee.

This letter provides a fiscal impact analysis of the collective bargaining agreement between the Commonwealth of Pennsylvania and the Pennsylvania State  Education Association (PSEA), Non-Tenured Teachers Unit.

As required by Act 20 of 2019, this report examines the economic impact from the regulation of single-use plastics. The report considers three types of regulation that have been enacted by other states and local jurisdictions: a ban, a fee and a ban-plus-fee. The report examines potential outcomes if these regulations were implemented statewide for plastic retail bags. The analysis is also extended to a ban on expanded polystyrene foam foodservice products.

This letter provides a fiscal impact analysis of the collective bargaining agreement between the Commonwealth of Pennsylvania and the Pennsylvania State Corrections Officers Association (PSCOA).

This report examines impact fee collections for 2019 and provides an outlook for 2020.

This report provides revised revenue estimates for FY 2019-20 and official estimates for FY 2020-21 related to the General Fund, Motor License Fund, Lottery Fund and federal funds subject to appropriation. 

Presentation

Methodology

This research brief presents four maps that illustrate recent demographic and income trends at the county level. The release highlights population change, personal income growth and per capita figures for all counties of the Commonwealth.

The initial revenue estimate for FY 2020-21 and updated estimates for FY 2019-20 are included. 

Director Matthew Knittel made a presentation on the initial revenue estimate for FY 2020-21 and updated estimates for FY 2019-20.

This report for the first quarter of 2020 uses data collected by the PA Department of Environmental Protection to develop statewide and county-level tabulations of production volume and well counts. 

The Independent Fiscal Office (IFO) has issued a cost analysis of the collective bargaining agreement between the Commonwealth of Pennsylvania and the Service Employees International Union (SEIU) Local 668 Unemployment Compensation (UC) Referees.

This report provides estimates for the revenue proposals contained in the 2020-21 Executive Budget released February 2020. The Independent Fiscal Office (IFO) publishes this report to fulfill its statutory duties as provided under 71 Pa.C.S. § 4104. The act requires that the IFO “provide an analysis, including economic impact, of all tax and revenue proposals submitted by the Governor or the Office of the Budget.”

The IFO released an updated revenue projection for FY 2019-20 and a preliminary projection for FY 2020-21 using two scenarios for business closures due to the COVID-19 virus. The release also discusses the impact on economic growth rates and federal stimulus monies that are projected to flow into the state economy.

This research brief uses data from the U.S. Census Bureau's American Community Survey to provide Pennsylvania property tax data for 2018 by county, household income and homeowner age.

Director Matthew Knittel made a brief presentation to the Pennsylvania School Boards Association on property tax data recently published by the IFO.

The IFO responded to questions raised at the office's budget hearing before the Senate Appropriations Committee.

The IFO responded to questions raised at the office's budget hearing before the House Appropriations Committee.

In response to a legislative request, the IFO conducted a preliminary analysis on the state and county impacts of the Family First Prevention Services Act.

Director Matthew Knittel gave a presentation at a session of the Pennsylvania Education Policy Fellowship Program regarding the Commonwealth's economic and budget outlook.

This report for the fourth quarter of 2019 uses data collected by the PA Department of Environmental Protection to develop statewide and county-level tabulations of production volume and well counts.

The Independent Fiscal Office submitted material to the House and Senate Appropriations Committees in advance of its scheduled budget hearings.

Testimony

This report contains the IFO's forecasted school district property tax collections from FY 2018-19 through FY 2024-25. The report also contains projections of the Act 1 index and estimates of school district property taxes that can be attributed to homesteads.

Total school property tax collections for FY 2018-19 ($15.0 billion) and FY 2019-20 ($15.3 billion) are estimated using millage rates published by the Pennsylvania Department of Education and property tax assessment data. For FY 2020-21 through FY 2024-25, collections are projected based on the statutory, economic and structural factors that affect growth rates of property taxes. During that period, total school property tax collections are projected to grow at an average annual rate of 3.9 percent, reaching $18.6 billion by FY 2024-25.

This report uses the most recent data from the U.S. Census Bureau, the Internal Revenue Service (IRS), the U.S. Bureau of Economic Analysis and the Federation of Tax Administrators to facilitate a comparison of state and local tax systems across the fifty states. The report examines (1) the relative level of state and local taxes across states, (2) the distribution of state and local taxes across revenue sources (e.g., income, sales and property) and (3) state debt levels.

Director Matthew Knittel provided brief testimony to the Senate Democratic Policy Committee regarding the potential impact of combined reporting on corporate net income tax revenues.

The Independent Fiscal Office (IFO) has released a mid-year update of its revenue estimate for fiscal year (FY) 2019-20. The revised estimate is $35.738 billion, which is $220 million higher than the IFO’s official estimate. As part of the mid-year update, the IFO also provides an advance look at revenue projections for the next fiscal year. For FY 2020-21, revenues are projected to be $37.117 billion, an increase of 3.9 percent over the current year. The IFO will update the estimate in its next round of revenue projections to be released in late May.

IFO presentation of Organ and Bone Marrow Donation, Mobile Telecommunications Broadband Investment, Research and Development and Keystone Innovation Zone Tax Credit Reviews and Performance-Based Budget highlights for the Department of Community and Economic Development, Department of Health and Department of Human Services.  

IFO presentation of Performance-Based Budget overview and agency highlights for the Pennsylvania Emergency Management Agency, Department of State and Department of Environmental Protection.

Act 48 of 2017 requires the Independent Fiscal Office (IFO) to review all state tax credits over a five-year period. For the second year, the IFO reviewed the Research and Development, Keystone Innovation Zone, Mobile Telecommunications Broadband Investment and Organ and Bone Marrow Donation Tax Credits.

Click on the link to access the Research and Development Tax Credit Report.

Act 48 of 2017 requires the Independent Fiscal Office (IFO) to review all state tax credits over a five-year period. For the second year, the IFO reviewed the Research and Development, Keystone Innovation Zone, Mobile Telecommunications Broadband Investment and Organ and Bone Marrow Donation Tax Credits.

Click on the link to access the Keystone Innovation Zone Tax Credit Report.

Act 48 of 2017 requires the Independent Fiscal Office (IFO) to develop performance-based budget plans for all agencies under the Governor’s jurisdiction once every five years. For the second year, the IFO reviewed the Department of Community and Economic Development, Department of Human Services (Part 1), Department of Health, Department of Environmental Protection, Department of State and Pennsylvania Emergency Management Agency.

Click on the link to access the performance-based budget review for the Department of Community and Economic Development.

Act 48 of 2017 requires the Independent Fiscal Office (IFO) to develop performance-based budget plans for all agencies under the Governor’s jurisdiction once every five years. For the second year, the IFO reviewed the Department of Community and Economic Development, Department of Human Services (Part 1), Department of Health, Department of Environmental Protection, Department of State and Pennsylvania Emergency Management Agency.

Click on the link to access the performance-based budget review for the Department of Human Services. The report has been reposted with modifications adopted by vote of the Performance-Based Budget Board.

Act 48 of 2017 requires the Independent Fiscal Office (IFO) to develop performance-based budget plans for all agencies under the Governor’s jurisdiction once every five years. For the second year, the IFO reviewed the Department of Community and Economic Development, Department of Human Services (Part 1), Department of Health, Department of Environmental Protection, Department of State and Pennsylvania Emergency Management Agency.

Click on the link to access the performance-based budget review for the Department of Health.

Act 48 of 2017 requires the Independent Fiscal Office (IFO) to review all state tax credits over a five-year period. For the second year, the IFO reviewed the Research and Development, Keystone Innovation Zone, Mobile Telecommunications Broadband Investment and Organ and Bone Marrow Donation Tax Credits.

Click on the link to access the Mobile Telecommunications Broadband Investment Tax Credit Report.

Act 48 of 2017 requires the Independent Fiscal Office (IFO) to review all state tax credits over a five-year period. For the second year, the IFO reviewed the Research and Development, Keystone Innovation Zone, Mobile Telecommunications Broadband Investment and Organ and Bone Marrow Donation Tax Credits.

Click on the link to access the Organ and Bone Marrow Donation Tax Credit Report.

Act 48 of 2017 requires the Independent Fiscal Office (IFO) to develop performance-based budget plans for all agencies under the Governor’s jurisdiction once every five years. For the second year, the IFO reviewed the Department of Community and Economic Development, Department of Human Services (Part 1), Department of Health, Department of Environmental Protection, Department of State and Pennsylvania Emergency Management Agency.

Click on the link to access the performance-based budget review for the Department of Environmental Protection.

Act 48 of 2017 requires the Independent Fiscal Office (IFO) to develop performance-based budget plans for all agencies under the Governor’s jurisdiction once every five years. For the second year, the IFO reviewed the Department of Community and Economic Development, Department of Human Services (Part 1), Department of Health, Department of Environmental Protection, Department of State and Pennsylvania Emergency Management Agency.

This report was updated to reflect the Performance-Based Budget Board vote to amend the report on January 22, 2020.

Click on the link to access the performance-based budget review for the Department of State.

Act 48 of 2017 requires the Independent Fiscal Office (IFO) to develop performance-based budget plans for all agencies under the Governor’s jurisdiction once every five years. For the second year, the IFO reviewed the Department of Community and Economic Development, Department of Human Services (Part 1), Department of Health, Department of Environmental Protection, Department of State and Pennsylvania Emergency Management Agency.

Click on the link to access the performance-based budget review for the Pennsylvania Emergency Management Agency.

This research brief uses recent data published by the Department of Environmental Protection to project CY 2019 Impact Fee collections. Collections are estimated to be $198.2 million, a decrease of $53.6 million from the prior year.

In response to a legislative request, the Independent Fiscal Office analyzed new or expanded tax credits and special zones approved by the General Assembly since 2009.

This report for the third quarter of 2019 uses data collected by the PA Department of Environmental Protection to develop statewide and county-level tabulations of production volume and well counts.

Director Matthew Knittel made a brief presentation to the Grow PA Coalition on the Pennsylvania Demographic and Economic Outlook.

Click on the hyperlink above to access the full report, three presentations and press release.

In response to a legislative request, the IFO transmitted a letter that analyzes a set of proposed school district property tax rebates for all homestead property owners.

In response to a legislative request, the IFO transmitted a letter that expands upon a prior analysis on the impact of a proposed minimum wage increase.

In response to a legislative request, the IFO transmitted a letter that provides revenue estimates for various proposed changes to the state tax code affecting personal income and sales and use taxes.

In response to a legislative request, the IFO transmitted a letter that analyzes (1) state spending dedicated to seniors, (2) the share of certain tax revenues remitted by seniors and (3) potential changes in senior migration patterns due to proposed tax law changes.

This research brief uses state personal income tax data to estimate natural gas royalties paid to landowners in 2017. The data suggest that royalties paid increased significantly from the prior year due to increased production and higher prices.

This report for the second quarter of 2019 uses data collected by the PA Department of Environmental Protection to develop statewide and county-level tabulations of production volume and well counts. 

This letter provides a fiscal impact analysis of the collective bargaining agreement between the Commonwealth of Pennsylvania and AFSCME.

This report examines the performance of IFO revenue estimates for the past seven budget cycles.

This report examines impact fee collections for 2018 and provides an outlook for 2019.

This report provides revised revenue estimates for FY 2018-19 and official estimates for FY 2019-20 related to the General Fund, Motor License Fund, Lottery Fund and federal funds subject to appropriation. 

Methodology

Deputy Director Brenda Warburton gave a presentation to the Pennsylvania Institute of Certified Public Accountants regarding an update on Pennsylvania's budget and economic landscape.  

The initial revenue estimate for FY 2019-20 and updated estimates for FY 2018-19 are included. For the PowerPoint presentation, click on the hyperlink above.

Director Matthew Knittel made a presentation on the initial revenue estimate for FY 2019-20 and updated estimates for FY 2018-19.

In partnership with the Pennsylvania Economy League, Director Matthew Knittel and Deputy Director Brenda Warburton will make multiple presentations on raising the state minimum wage to $12.00 per hour. The presentation examines the proposed minimum wage’s impact on employment, worker incomes, prices and state spending.

This report provides estimates for the revenue proposals contained in the 2019-20 Executive Budget released February 2019. The Independent Fiscal Office (IFO) publishes this report to fulfill its statutory duties as provided under 71 Pa.C.S. § 4104. The act requires that the IFO “provide an analysis, including economic impact, of all tax and revenue proposals submitted by the Governor or the Office of the Budget."

This report contains the IFO's forecasted school district property tax collections from FY 2017-18 through FY 2023-24. The report also contains projections of the Act 1 index and estimates of school district property taxes that can be attributed to homesteads.

Total school property tax collections for FY 2017-18 ($14.5 billion) and FY 2018-19 ($14.9 billion) are estimated using millage rates published by the Pennsylvania Department of Education and property tax assessment data. For FY 2019-20 through FY 2023-24, collections are projected based on the statutory, economic and structural factors that affect growth rates of property taxes. During that period, total school property tax collections are projected to grow by an average annual rate of 3.2 percent, reaching $17.3 billion by FY 2023-24.

In response to a legislative request, the IFO transmitted a letter that computes the level of personal income tax (PIT) increase needed to fully fund a 100% homestead exclusion for school district property taxes.

In response to a legislative request, the IFO transmitted a letter that modifies or supplements certain computations from the IFO report entitled State and Local Taxes: A Comparison Across States (December 2018). The letter also compares Pennsylvania’s relative debt burden to other states.

In response to a legislative request, the IFO has updated projections regarding school district property tax elimination. The document projects the school property tax revenues that would be subject to replacement under potential legislation that would eliminate school property taxes.

Click on the hyperlink above to access the five performance-based budget reviews and presentations.

Click on the hyperlink above to access the (1) Film Production Tax Credit, (2) Historic Preservation Tax Credit, (3) New Jobs Tax Credit and (4) summary PowerPoint presentation.

Click on the hyperlink above to access the full report, three presentations and press release.

In response to a legislative request, the Independent Fiscal Office published a research brief related to the Redevelopment Assistance Capital Program. The brief provides historical data of the program and examines the potential impact of proposed legislation.

This research brief was updated November 12, 2019 to take Act 43 of 2019 into consideration.