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PA Worker Earnings Catch Up to Inflation The COVID-19 pandemic caused an inflation surge and wage pressures due to worker shortages and strong demand. This research brief uses the latest published data to examine how those outcomes affected real wages and earnings for the average or typical Pennsylvania private sector worker. Tags: brief, earnings, inflation, research
Inflation's Impact on Earnings and Pensions This research brief uses recent data from the U.S. Bureau of Labor Statistics to compute the impact of unusually high inflation on real average hourly earnings of Pennsylvania workers and a typical SERS-PSERS annuitant. Tags: brief, earnings, inflation, pensions, research
PA Worker earnings Catch Up to Inflation The COVID-19 pandemic caused an inflation surge and wage pressures due to worker shortages and strong demand. This research brief uses the latest published data to examine how those outcomes affected real wages and earnings for the average or typical Pennsylvania private sector worker. 11/30/2023
Inflation's Impact on earnings and Pensions This research brief uses recent data from the U.S. Bureau of Labor Statistics to compute the impact of unusually high inflation on real average hourly earnings of Pennsylvania workers and a typical SERS-PSERS annuitant. 07/31/2023
Inflation Eroding Real Wages and Pension Benefits The IFO published a new research brief that examines the impact of inflation on the real earnings of Pennsylvania workers and the real value of public pension benefits. 10/19/2021
2002_dbdc_report.pdf This distinction between the DB and DC approaches is most significant in the placement of the risk associated with investment earnings over the period of employment. The fixed benefit in a DB pension plan means that the investment experience impacts the contribution requirements, increasing them when earnings are lower and decreasing them when earnings are higher. The fixed contributions in a DC pension plan mean that the Hits: 76
ACN_SB1071_A10803_text.pdf the employer defined contributions paid into the trust on account of a participant's school service, together with any investment earnings and losses and adjustments for fees, costs and expenses credited or charged thereon and reduced by any distributions. "Accumulated mandatory mandatory pickup participant contributions paid into the trust on account of a participant's school service, together with any investment earnings and losses and adjustments for fees, costs and expenses credited or charged thereon and reduced by any distributions. "Accumulated total Hits: 63
2013_special_report_funding_and_reforming_public_employee_retirement_systems.pdf not sufficient to place the entire system at risk). - 2 - During the halcyon days of the late 1990s, the investment earnings of the State Employees’ Retirement System (SERS) and the Public School Employees’ Retirement System (PSERS) were such that the plan Reduction of Liabilities1. The nature of the contract clause protection is the concept that retirement benefits are future compensation, presently earned. In other words, the employee undertakes to perform services for the employer in return for compensation, both present (wages and Hits: 53
Revenue-Proposal-Analysis-2019-03.pdf 2018 instead of 2017. Those data show a notable drop in the number of non-tipped Pennsylvania workers earning under $10.00 per hour (-65,000, primary jobs only) and a large increase in workers earning $15.00 per hour or more (+150,000). 9  Last year’s analysis assumed a three-year phase-in to $12 Hits: 45
ACN_SB1_A01354_A01558_2017_06_03a.pdf 36,000, or $3,000 per month. The retirement benefits administered by the Systems are funded through employee contributions, investment earnings and employer contributions. The general benefit designs of the Systems remained largely unchanged from the time the authoriz- ing statutes or the two hybrid plans) would have an individual investment account in which participant and employer contributions accumulate, and investment earnings, fees and costs are credited or charged. Employees would have the op- tion to invest more of their annual salary Hits: 37
RB-2015-04.pdf the state minimum wage is tied to in Ðlation as measured by the consumer price index for all urban wage earners (CPI‐W). For the past year, that in Ðlation measure reveals a decline, or disin Ðlation, so those minimum wage by $2.85 (39.3 percent) from its current level. For a full‐time worker (40 hours per week) who earns minimum wage and retains employment, annual wage income would increase from $15,080 to $21,010, an increase of $5 Hits: 33
2007_divestment_complete_report.pdf of Divestment on Indirect Investments . . . . . . . . . . . . . 36 – Impact on Assumed Investment Returns and Employer Contribution Requirements . . . . . . . . . . . . . . . . 36 – Cumulative Effect of Reduced Earnings . . . . . . . . . . . . . . . . . . 40 – Transaction, Administrative and Monitoring Costs . . . . . . . . . 44 Part VI. Appendices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47 – Appendix I . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49 The Divestment Bills House Bill Numbers Potential Impact of Divestiture on Local School Districts For FY 2006/2007: Illustration of Impact of Reduction of PSERS’ Investment Earnings Assumption – Table V . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40 S&P 500 Index Comparison with the S&P South Africa Free Index – Table VI . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41 Hits: 33
Revenue-Proposal-Analysis-2020-04.pdf elasticity applies to all workers, while for others, it only applies to affected workers (i.e., workers currently earning less than the new, higher minimum wage) and sometimes only affected workers in a particular industry or sector (e.g., fast food Washington (July 2016). 25 For employers with less than 500 employees who offer health insurance or the employees earn tips, the minimum wage increased to $10.00 per hour. 26 Meer, Jonathan and Jeremy West. “Effects of the Minimum Wage on Hits: 31
2000_cost_of_living_adjustments.pdf CPI was an implicit factor in setting the benefit amount in many of the other instances of a fixed benefit. Earnings - In 4% of the retirement systems, the benefit amount is determined by the investment earnings made available, with the CPI being a factor in two of the three instances of earnings-based benefits. Method of Hits: 22
Revenue_Proposal_Analysis_2021_04.pdf and Prohofsky (2018) 25 A Stanford University working paper examined three waves of tax reform in California that affected top earners using administrative tax data to analyze how high-income taxpayers respond to changes in top tax rates. Statistical significance on where residents move into the millionaire bracket or fall out of it. The authors cite the temporary nature of high earnings (e.g., transitory capital gains) for many taxpayers as a reason for the modest tax migration effect. Kleven et al Hits: 21
Revenue-Proposal-Analysis-2018-04.pdf 2016, the 2017 survey data utilized in the analysis show a material reduction in the number of workers earning less than $11.99 per hour. That technical change reduces the number of workers that receive a higher wage, as well as Many hourly‐paid workers report compensation that falls below the federal minimum and most are employees who traditionally earn tips, such as food servers and bartenders. Employers may pay less than the federal minimum if a tipped worker earns at least Hits: 21
2004_srpvffinal.pdf Credit: Describes the manner in which service is credited. “1 for 1" indicates that a year of service credit is earned for every year of certified volunteer fire service. Otherwise, credit is as indicated. Vesting: Describes the service required for a the member is fully vested (example, “5-year Cliff” would indicate vesting after five years of service credit has been earned). “Partial” indicates that members vest in a percentage of their benefit over specific service time frames (example, 25% vested after Hits: 21
Single-Use Plastics Report-2020_06.pdf 33 Section 6: Net Economic Impacts ........................................................................................... 37 Consumption and Spending on Retail Bags...................................................................................... 37 Impact on Employment and Earnings ............................................................................................. 39 Treatment of Fee Revenues ........................................................................................................... 41 Section 7: Local and State Government .................................................................................. 43 Litter Abatement ........................................................................................................................... 44 Waste Management ....................................................................................................................... 45 Recycling ...................................................................................................................................... 47 Section a portion of the higher consumer spending flows to Pennsylvania manufacturers. Employment falls by 507 jobs and labor earnings decline by $22 million.  A fee (10 cents) increases consumer spending on other goods and services as spending on retail bags Hits: 20
RB_2021_10_Inflation_Impact_Wages.pdf Many recent articles have noted the negative impact that high rates of inflation are having on the real earnings of U.S. workers. 1 The latest monthly earnings release by the U.S. Bureau of Labor Statistics (BLS) confirms that finding. The release found that real average hourly Hits: 17
Revenue_Proposal_Analysis_2024_03.pdf would still be required to ensure that most workers receive at least the regular minimum wage after accounting for tips earned. Since 2015, the IFO has published numerous analyses of various minimum wage proposals, with the most recent analysis released in occupation increased 4% above the average occupation wage growth and was offset by slower wage growth for the highest wage earners within the same occu- pation. Although the hourly minimum wage is $7.25 for Pennsylvania employers, based on the projected Hits: 16
Revenue_Proposal_Analysis_2023_05.pdf newly certified nurses, teachers and police officers. This personal income tax (PIT) credit is equal to 3.07% of wages earned from nursing, teaching or policing during the tax year. The credit is capped at $2,500 annually and is available assess their effectiveness. These tax credits include: ▪ Colorado’s Early Childhood Educator Tax Credit is for early childhood educators who earn less than $75,000 (single) or $150,000 (joint) in federal adjusted gross income. The credit amount ranges from $750 Hits: 16
2006_surviving_spouse_healthcare_study.pdf The retiree is required to annually contribute an amount equal to one percent of the final base salary that was earned by the employee in the year prior to retirement. RETIRED EMPLOYEE HEALTH PROGRAM -4- Prior to 1991, postretirement healthcare was fiscal year pay-as-you-go basis. 7 Actuarial accrued liability - The cost of fully projected benefits that has been earned (or accrued) as of the valuation date. 8 Normal cost -The portion of the cost of projected benefits allocated to Hits: 15
PBB_2022_DLI_REPORT.pdf trained 2,798 2,760 3,296 3,130 2,676 -- Second Quarter 1 Employment rate -- 77% 77% 77% 69% -- Earnings gain -- $1,598 $1,865 $2,119 $1,695 -- Fourth Quarter 1 Employment rate -- 76% 76% 75% 67% -- Earnings gain -- $1,962 $2,272 $2,478 $2,191 -- Dislocated Workers Individuals trained 4,812 4,297 3,792 3 Hits: 14
RB_2023_07_Inflation_Impact.pdf 0% sometime in 2024. This research brief provides an update to an IFO analysis from October 2021 using recent hourly earnings and CPI data to quantify how unusually high inflation has impacted real earnings for Pennsylvania workers and pensions received by annuitants of the State Employees Retirement System (SERS) and Pennsylvania School Employees Retirement Hits: 13
RB_2021_01_Economic_Impact_of_Federal_Stimulus.pdf other provisions. Based on these data, the IFO estimates that more than 85% of total payments flowed to residents who earned less than $50,000 annually. This outcome is heavily influenced by the PUA program, in which nearly 80% of claimants to the uncapping of the refundable portion of the tax credit and the elimination of the minimum income requirement. Filers earning less than $25,000 in AGI gain $1.2 billion, while filers under $50,000 receive an additional $835 million Hits: 13
PBB_2021_DHS_REPORT_ADDENDUM.pdf 75.0% 76.0% % Served in work experience 52.5% 63.3% 54.0% 51.0% 47.9% 50.0% % Earning credits 1,7 74.3% 78.9% 80.3% 80.2% 86.0% 82.0% % Earned HS degree/GED 1,7 33.4% 38.1% 42.6% 37.5% 31.8% 37.0% % Preparedness for reentry Hits: 13
Monthly_Economic_Update_February_2022.pdf PA Real Average Hourly Earnings Contract, but Some Workers Gain In January 2022, the U.S. Bureau of Labor Statistics (BLS) released December employment and average hourly earnings data for all states. The latest data reveal dramatically different outcomes for the growth of average hourly earnings across sectors Hits: 13
RB_2021_02 County Income Patterns.pdf Allegheny, Washington and Armstrong) and northern counties (e.g., Potter, Bradford and Susquehanna) due to strong gains recorded for net earnings (earnings from labor) and dividends, interest and rent. Moreover, some of those counties (Armstrong, Bradford, Potter and Susquehanna) recorded strong income Hits: 12
RB_11_2023_PA_Worker_Earnings.pdf The COVID-19 pandemic, mitigation efforts and federal response produced two economic outcomes that directly impacted the real earnings of Pennsylvania workers. Inflation surged to a four-decade high while a labor shortage and strong demand pushed up worker during that four-year period (bottom row). The table also displays corresponding YOY growth rates for (1) Pennsylvania average hourly earnings and (2) the Philadelphia metro region employment cost index (ECI) for wages and salaries (excludes benefits). These two labor compensation Hits: 11
Public Employee Retirement Laws of PA Local Governments (2009).pdf is maintained by contributions from local governments (which include State aid), payroll deductions and other contributions of employees, and by earnings from the invest- ments of the system. While the monies of individual munici- palities are accounted for separately, they are the system, and the General Assembly has dealt with that situation by periodically authorizing the retrospective use of investment income earned in excess of the regular interest rate set by the PMRS Board. Membership. Membership is optional for Pennsylvania’s local Hits: 11
MTR-2016-03.pdf FYTD $22,240 $21,901 $340 Growth 2.4% 3.5% -39.3% Dollar amounts are in millions. BEA RELEASES EARNINGS FOR 2015 On March 24 th , the U.S. Bureau of Economic Analysis (BEA) released state Personal Income data for Income increased by 3.3%, versus 4.4% for the U.S. The main component of Personal Income is gross earnings by place of work, which includes wages-salaries, employer contributions to health insurance and pension plans, employer contributions to government Hits: 10
TC_2020_Mobile Telecommunications Broadband Investment Tax Credit.pdf an amount not to exceed 50 percent of a taxpayer’s total CNIT liability in any year. Credits earned but not utilized in the same tax year as awarded may be carried forward for up to five tax years. Credits transferred to as value added), the change in the number of full-time equivalent employees and the change in earnings. 20 It is noted that the employment figure in Table 4.1 does not represent permanent jobs. Line 14 The Pennsylvania personal Hits: 9
Presentation-2019-5-1-PAEL.pdf Wage Proposal Increase minimum wage from $7.25 to $12.00/hr (+65.5%).  Note: average wage for workers earning <$12.00 is $9.73 (+23.3%).  Effective July 1, 2019. Applies to entire state.  On July 1 expenditures on healthcare programs (Medicaid). Raised by Opponents:  They are "starter" wages paid to inexperienced workers.  Most who earn minimum wage are dependents.  Reduces number of jobs.  Makes entry into labor market more difficult.  Affects smaller Hits: 9
platt ppt.pdf www.bea.gov Recent Trends in Personal Income, Earnings and Wages in Pennsylvania Joel D. Platt Associate Director for Regional Economics Revenue Forecasting Conference Independent Fiscal Office for Pennsylvania production (factor payments to labor and capital) o Business and government transfers 5 www.bea.gov Components of Personal Income ▪ Earnings (Place of Work)  Compensation (Place of Work)  Wages and salaries  Supplements  Employer payments for pensions and Hits: 9
Revenue_Estimate_2023_06.pdf are excluded. The bottom portion of the table displays the most recent data from FactSet for S&P 500 net earnings, revenues and profits margins (i.e., profits divided by revenues or sales). Corporate net earnings or profits growth is the product of (1) profit margin growth and (2) revenue growth. For example, if profit margins Hits: 8
Revenue-Estimate-2023-05.pdf are excluded. The bottom portion of the table displays the most recent data from FactSet for S&P 500 net earnings, revenues and profits margins (i.e., profits divided by revenues or sales). Corporate net earnings or profits growth is the product of (1) profit margin growth and (2) revenue growth. For example, if profit margins Hits: 8
RB-2020-COVID-19 Local Revenue Impact.pdf from the General Assembly, this research brief examines 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. The March 2020, (2) EIT remittances received during the calendar year, which are attributable to wage compensation and certain net profits earned one quarter prior (i.e., 2019 Q4 to 2020 Q3) and (3) gaming local share assessment distributions on a one Hits: 8
House_Maj_Policy_Com_Testimony_June_8_2022.pdf IFO projects overall inflation to average 7.0% for 2022 and decelerate to 4.5% for 2023. Real Average Hourly Earnings Due to inflation, the real value of average hourly earnings for Pennsylvania payroll workers contracted by 3.8% in April 2022 relative to the prior year (see next page). (For Hits: 8
TC_2021_Video_Game_Production.pdf time during the year and is equal to 85 percent of the value of the tax credit that could be earned. 11  New Jersey provides a 20 percent tax credit for qualified digital media production expenses, or 25 percent of multiplier is applied to the new Pennsylvania spending (line 11) that results from the VGP Tax Credit. Line 16 An earnings multiplier is applied to the new Pennsylvania spending that results from the VGP Tax Credit. 21 Line 17 An employment Hits: 7
TC_2021_Neighborhood_Assistance_Program.pdf or spending because it does not double count sales that occur in the supply chain. Line 11 IMPLAN applies an earnings multiplier to the new Pennsylvania spending that results from the NAP Tax Credit. 23 Line 12 IMPLAN applies an employment multiplier to the new Pennsylvania spending that results from the NAP Tax Credit. When combined with the earnings impact, the results suggest an average annual wage of roughly $55,000 to $58,000. Line 13 Tax collections due Hits: 7
TC_2021_Entertainment_Economic_Enhancement_Program.pdf assumes the state personal income tax (PIT) is paid on those wages. Moreover, the analysis assumes that wages or salaries earned by a performer are also subject to state PIT (includes incentivized performances only). Section 4: Economic Analysis | Page 16 Line multiplier is applied to the new Pennsylvania spending (line 16) that results from the EEEP Tax Credit. Line 18 An earnings multiplier is applied to the new Pennsylvania spending that results from the EEEP Tax Credit. 25 Line 19 An employment Hits: 7
Revenue_Proposal_Analysis_2022_04.pdf Journal of Economic Perspectives, 35(1), 3-26 (February 2021). 6 Long, M. C. “Seattle’s local minimum wage and earnings inequality,” Economic Inquiry (April 2021). 7 Yu et al. “Evidence of the Unintended Labor Scheduling Implications of the Minimum Wage results from the prior analysis for the first full year are as follows: ▪ An estimated 749,000 directly affected workers (earning less than $12.00 per hour) and 696,000 indirectly affected workers (earning $12.00 to $14.99 per hour Hits: 7
Presentation_Rotary_Club_of_York_7-15-2015.pdf 30/2014. 3 Calendar year 2014  Employee contributions (percent of salary). • SERS: 6.25% • PSERS: 7.5%  Investment earnings. • Assumed 7.5% long-term rate of return. Actual earnings are based on market conditions. • Significant losses during the 2008-2009 recession.  Employer contributions. • Determined actuarially after accounting for Hits: 7
Presentation_Harrisburg_Rotary_4-11-2016.pdf 30/2015. 3 Calendar year 2015  Employee contributions (percent of salary). • SERS: 6.25% • PSERS: 7.50%  Investment earnings. • Assumed 7.5% long‐term rate of return. Actual earnings are based on market conditions. • Significant losses during the 2008‐2009 recession.  Employer contributions. • Determined actuarially after accounting for Hits: 7
PBB_2022_PDE_REPORT_Amended.pdf Statewide Outcomes % Age 25 to 64 that hold a postsecondary degree or industry recognized credential 46% 50% 51% -- -- -- % HS grads earning degree within 6 yrs of grad -- -- -- 43% 43% -- Graduate within 150% normal time 2 Community Colleges 16% 18% 19% 20% 46% 50% 51% -- -- -- % Enrolled in postsec. edu. w/in 16 mo. of grad 2 63% 62% 61% 57% -- -- % HS grads earning degree within 6 yrs of grad 2 -- -- -- 43% 43% -- Community Colleges Fall headcount enrollment (000s) 3,4 124.8 121 Hits: 7
TC_2020_Research and Development Tax Credit.pdf estimated that the credit created or retained 1,150 jobs per annum, gen- erated $85 million in new earnings at an average salary of $72,000 and a net fiscal cost of $42,000 per job created. 17  A report multipliers are used to determine the impact on state gross domestic product (GDP), full time equivalent jobs and earnings of workers and business owners 32 The impact on state GDP will be smaller than the impact on spending/output because spending Hits: 6
Presentation_Pension_Town_Hall_3-26-2015.pdf 26/2015 6 Defined Benefit Plans  Employee contributions (percent of salary). • SERS: 6.25% • PSERS: 7.5%  Investment earnings. • Assumed 7.5% long‐term rate of return. Actual earnings are based on market conditions. • Significant losses during the 2008‐2009 recession.  Employer contributions. • Determined actuarially after accounting for Hits: 6
MTR-2017-07.pdf for the first quarter of 2017. The data include personal income and its components, which can be decomposed into net earnings (64% of total), transfer receipts (17%), dividends, interest and rent (19%). Net earnings include wages and salaries (less social insurance tax contributions) and business profits. Transfer receipts include government assistance to individuals such Hits: 6
Economic_Forecast_Business_Leadership_Summit_Feb_2024.pdf 1.1 million worker contraction April 2020; UE Rate goes to 16.2% Inflation Inflated assets: homes and stocks Real Earnings Feb 2024 Economic Summit Slide 6 Was there a permanent exodus from Labor Force? (No.) Most impacts permanent, but some deflation (durable goods, energy) Inflation creates winners and losers How about wage earners? Clear winners: homeowners, especially refinancers What industries added jobs over last 4 years? Home Price Inflation + Low Interest Rates All Hits: 6
Boyd PA IFO November 2016.pdf varies greatly. PA pensions significantly underfunded. •As interest rates fell and investing environment became more difficult, public pension plans maintained earnings assumptions and increased investment risk. Private plans and plans in other countries reduced earnings assumptions. •Incentives & institutions encourage risk taking. Lowering earnings assumptions would require large contribution increases. •Risk to taxpayers & stakeholders in govt Hits: 6
2024_Mid_Year_Update_Final.pdf 9.8 Realty Transfer 302 -105 -25.8 All Other 1,306 290 28.5 $59m in January from TSF earnings Note: Dollar millions. PIT is personal income. January revenue preliminary. Figures control for processing delays last fiscal year. Mid-Year 54 -9.5 Realty Transfer 649 543 -106 -15.7 All Other 4,098 4,437 339 10.1 Treasury earnings Note: Dollar millions. Official estimate is adjusted for tax law changes enacted in December 2023. PIT is personal income. Sales Hits: 6
2002_drop_report.pdf employer typically deposits all or a portion of the DROP participant’s monthly retirement payment into a separate account that earns interest at a rate specified by statute or ordinance and ceases crediting the additional compensation and service for retirement benefit to the DROP, to the retirement system, or both. Interest Crediting to DROP Accounts. Most, but not all, DROP accounts earn interest. Because these accounts will be held for a short period of time, they will tend to be more sensitive Hits: 6
TC_2021_Keystone_Special_Development_Zones_Update.pdf excess of the number of FTEs employed by the KSDZ employer prior to January 1, 2012. Tax credits can be earned in any tax year for up to ten years between July 1, 2012 and June 30, 2035. There is no of the number of FTEs employed by the KSDZ employer prior to January 1, 2012. 3 Tax credits can be earned in any tax year for up to ten years between July 1, 2012 and June 30, 2035. 4 There is Hits: 5
Roundtable_Jan_2024_Final.pdf 9.8 Realty Transfer 302 -105 -25.8 All Other 1,306 290 28.5 $59m in January from TSF earnings Note: Dollar millions. PIT is personal income. January revenue preliminary. Figures control for processing delays last fiscal year. Sales and 1% US Corporate Profit Trends Domestic Non-Financial Profits 5.5% -1.9% 0.4% -- FactSet: S&P 500 Net Earnings -2.2% -5.2% 4.1% -- 2020 2021 2022 2023 CNIT Payments (tax year) 13.8% 33.4% 23.5% Hits: 5
IFO_Hearing_Materials_02_2024.pdf Taxes .................................................................................................. 10 Lottery and Gaming Trends .................................................................................. 12 Revenues, Economics and Demographics Revenue Trends .................................................................................................. 13 Economic Trends ................................................................................................. 14 Jobs and Real Earnings ........................................................................................ 15 Philadelphia CPI-U ............................................................................................... 16 Consumer Wealth and Debt .................................................................................. 17 Demographic Projections ...................................................................................... 18 Demographics – Components of Population Change ............................................... 19 Other Jobs (000s) 938 805 Analysis counts jobs, not people Receive Wage Increase (000s) 918 805 1,723 Directly Affected workers earn Gross Income Gain ($ billions) $2.83 $0.88 $3.71 <$15 per hour Average Annual Income Gain $3,084 $1 Hits: 5
Five_Year_Outlook_2023.pdf 6,236 2,602 -1,371 General Fund Financial Statement Note: Millions of dollars. 5 Prior year balance plus interest earnings, less any shortfall that cannot be absorbed by the General Fund. 1 Based on appropriations. Includes current year lapses. 4 interest rates revert to historical levels. 6 A value below 100 indicates that a household with median income does not earn enough to qualify for a mortgage on a median-priced home. Fiscal Year 22-23 23-24 24-25 25- Hits: 5
Revenue-Estimate-2020-05.pdf residents decrease by 3.2 percent (2020) and increase by 5.5 percent (2021). Those amounts exclude compensation earned by self-employed and inde- pendent contractors.  Payroll Employment contracts by 495,300 (2020, annualized basis) and expands by 357,100 This is consistent with forecasts from other entities that project a 15 to 30 percent decline in corporate earnings for CY 2020. The IFO’s official estimate assumed moderate profits growth in CY 2020. The IFO’s revised estimate as- sumes Hits: 4
Response-Letter-10-7-2019.pdf moving the minimum wage rate to $12.00 per hour. The analysis estimates that 1.08 million workers that previously earned under $12.00 per hour (referred to as “directly affected” workers in the analysis) would receive a higher wage and retain employment. The analysis assumed that another 826,000 indirectly-affected workers earning between $12.00 and $14.99 would also receive a modest average pay increase of four percent. Overall, the incremental Hits: 4
RB-2017-5.pdf and (3) the highest tax bracket. 3 The fourth column displays the marginal effective tax rate for a couple that earns $75,000, files a joint return, claims two exemptions and a standard deduction (if applicable). The final column denotes if or a standard deduction. 3 The marginal tax rate is the tax rate imposed on the last dollar of income earned. Independent Fiscal Office Page 3 Table 1 2017 State Personal Income Tax Rates State Lowest Rate 1 Rate at $75 Hits: 4
RB 2019 County Income Patterns.pdf percent), Crawford (1.2 percent) and Cumberland (1.3 percent). Personal income can be decomposed into three categories: (1) resident earnings (wages, salaries and business income), (2) dividends, interest and rent and (3) transfer receipts and retirement income. For the state, per capita average annual growth rates for these income sources were as follows: earnings (2.9 percent), dividends, interest and rent (3.4 percent), transfer receipts and retirement income (2.8 percent). The moderate Hits: 4
Presentation_PASBO_Annual_Conference_3-8-2018.pdf vs. Declining Districts School District Revenues; FY 2015-16 Source Amount Percent Property Tax (excludes delinquent) $12,615 44.3% Earned Income $1,509 5.3% Other Local Sources $2,185 7.7% Act 1 Allocations (slots) $531 1.9% State to a reduction in the investment rate of return.  Under defined benefit pension funding, employer rates increase when investment earnings are lower than expected.  For employees hired under Act 5, the resulting employer rate increase is mitigated (but not Hits: 4
Presentation-2018-07-NCSL.pdf percentage point reductions in the assumed rate of return.  Quantified the projected change in employer contributions under the current earnings assumption and the lower rate.  Sensitivity analysis is consistent with Actuarial Standard of Practice No. 51. 7/29/2018 and projections supplied by the actuaries. A broader analysis could be performed with additional time and resources.  Multiple deterministic earnings assumptions could be employed.  Stochastic analysis could help establish the distribution of outcomes and the probabilities associated with those Hits: 4
PBB_Board_Hearing_Apr_26_2021.pdf metrics for NAP, EEEP and VGP ▪ Gross ROI vs. net ROI (deducts alternative use of monies) ▪ Output or spending | labor earnings | number of jobs ▪ Not possible to estimate certain spillover effects and synergies ▪ Keys: incentivization parameter, “leakages” and “injections” April 26 relevant studies ▪ Gross ROI: 12 cents per dollar | Net ROI: 5 cents per dollar ▪ +$22.7m GDP | +$20.9m labor earnings | +320 FTEs Other effects ▪ Social, environmental and aesthetic benefits to communities Recommendations ▪ Standardize application period and commitment decisions ▪ Create project Hits: 4
PA_Economy_League_Presentation.pdf school boards to reduce or eliminate school property taxes by millage rate reductions.  Replacement revenues derived from higher local earned income or business taxes (mercantile or business privilege). Other variations.  Some local option proposals have included local personal income May.2017 7 19.May.2017 FY14-15 School District Revenues Source Amount Percent Property Tax $12,285 44.5% Earned Income $1,476 5.4% Other Local Sources $2,126 7.7% Act 1 Allocations (slots) $530 1.9% State Hits: 4
Official_Revenue_Estimate_Methodology_2023_06.pdf capture that linkage. Pennsylvania DCI is equal to Cash Income less Taxes. (See Table 1 .) Cash Income includes all income earned, received or realized by Pennsylvania residents during the calendar year. The measure is different than state personal income reported by associations, nonprofit hospitals and medical associations are exempt from tax. Additionally, canceled policies, premiums for reinsurance, annuity considerations and dividends, earnings of participating members in mutual or stock insurance companies and premiums written by automobile insurance companies for extraordinary medical benefit Hits: 4
Initial_Revenue_Update_May_2023_Final.pdf 10.2 unexpected weakness Realty Transfer 581 -24.6 consistent weakness All Other 4,301 -40.6 11.1 Treasury earnings Note: Dollars in millions. PIT is personal income tax. Adjusted growth rate controls for one-time/new transfers (e.g 7% 15.0% -2.7% FactSet S&P 500 2022.1 2022.2 2022.3 2022.4 2023.1 Net Earnings (YOY growth) 9.4% 5.8% 2.5% -4.9% -2.2% Revenues (YOY growth) 13.0% 12.7% 10 Hits: 4
Initial_Revenue_Estimate_Presentation_May_2023_Final.pdf 10.2 unexpected weakness Realty Transfer 581 -24.6 consistent weakness All Other 4,301 -40.6 11.1 Treasury earnings Note: Dollars in millions. PIT is personal income tax. Adjusted growth rate controls for one-time/new transfers (e.g 7% 15.0% -2.7% FactSet S&P 500 2022.1 2022.2 2022.3 2022.4 2023.1 Net Earnings (YOY growth) 9.4% 5.8% 2.5% -4.9% -2.2% Revenues (YOY growth) 13.0% 12.7% 10 Hits: 4
Five_Year_Outlook_2020.pdf inflation rate of 2.0 percent.  Interest rates remain relatively low. Energy prices do not increase dramatically.  Wage earners receive raises that exceed inflation (i.e., real wages increase).  Payroll employment does not return to its pre-pandemic permanently exit the labor force, it could create labor supply constraints. It could also be the case that former two-earner house- holds decide that a spouse or partner will remain at home to school children and/or provide care for Hits: 4
index.cfm revenues for November, an increase of $107.9 million (3.7%) compared to November 2022 (adjusted). ... (Full Report) PA Worker Earnings Catch Up to Inflation Economics and Other November 30, 2023 The COVID-19 pandemic caused an inflation surge and wage and strong demand. This research brief uses the latest published data to examine how those outcomes affected real wages and earnings for the average or typical Pennsylvania private sector worker. ... (Full Report) November 2023 Monthly Economic Update Revenue & Economic Update November Hits: 4
TC_2022_Coal_Refuse_Energy_and_Reclamation.pdf s Alternative Energy Portfolio Standards (AEPS). Under these stand- ards, alternative energy suppliers (designated as Tier I and Tier II) earn Alternative Energy Credits (AECs) for each MWh of electricity generated from alternative sources. Electric distribution companies and electric generation suppliers by the spending of workers directly employed by the industry. The net impact is an increase of 366 jobs. The earnings multiplier for that sec- tor is also applied to derive an increase in total earnings of $35 million. 29 For Hits: 3
TC_2020_Keystone_Innovation_Zone_Tax_Credit.pdf million). This increase in GDP is associated with 542 full-time equivalent jobs and $53 million of labor earnings (includes employee compensation, and the earnings of independent contractors and sole proprietors). 24 Median annual wages for typical occupa- tions in subsectors that use the credit include software Hits: 3
SR2014-03-presentation.pdf 6.95 million $13.90 million $20.85 million Current countywide averages: Consolidated district ranges: 16.Dec.2014 16 Findings Earned Income Tax Real Estate Tax 0.56% 20.442 mills Earned Income Tax Admin. Savings Real Estate Tax 2.0% 75% 15.932 mills 0.5% 25% 21.956 mills Analysis Hits: 3
Senate Appropriations Response Letter 3-6-2020.pdf in New York for the previous 12 consecutive months. They must have graduated from a New York State high school, earned an undergraduate degree from a New York college or university in 2014 or later, be enrolled in a federal income- to $101,410. For 2018, the middle income range is $40,730 to $121,570. Low income is any household earning less than middle income. Upper income is any household earning more than middle income. Income excludes any capital gains. Sources Hits: 3
Response_Letter_2021_April.pdf realty transfer) and taxes not based on income or consumption (e.g., inheritance). The analysis also did not consider local earned income or sales taxes. Based on these criteria, Table 3 includes the following General Fund taxes: (1) state personal income 6% tax. ▪ The additional personal income tax (PIT) would be collected at the local level, similar to the existing local earned income tax (EIT). The Department of Revenue devotes significant resources to ensuring compliance with PIT laws, including the matching of Hits: 3
RB_09_2023_Treasury.pdf a competitive return while preserving capital (e.g., money market funds). (See the Pennsylvania Treasury website for more information.) Treasury earnings are posted monthly as General Fund revenue and those amounts have increased dramatically over the past 15 months. This research divided by the average daily balance) for FY 2014- 15 through FY 2023-24. The data illustrate that the higher earnings are due to the combination of two factors: (1) unprecedented General Fund balances and (2) historically high interest rates. Prior Hits: 3
RB-2020-03 County Income Patterns.pdf percent), Montgomery (3.4 percent) and Montour (3.9 percent). Personal income can be decomposed into three categories: (1) resident earnings (wages, salaries and proprietor income), (2) dividends, interest and rent and (3) transfer receipts (e.g., Social Security, Medicare, Medicaid income maintenance benefits). For the state, per capita average annual growth rates for these income sources were as follows: resident earnings (3.8 percent), dividends, interest and rent (7.3 percent), and transfer receipts (3.7 percent). The growth rate for Hits: 3
Presentation-2018-08-PA-State-Association-Boroughs.pdf Economic growth. Job Creation. Spending patterns.  Service sector jobs. Slower growth. Housing pressures. Transition to local unit trends.  Earned income tax and property tax.  Focus on wage growth. August.08.2018 2 Good Morning & Today’s Presentation Established of Comm. and Economic Development, U.S. Bureau of Economic Analysis and Federal Housing Finance Agency. August.08.2018 21 Earned Income Tax: Avg. Growth Rates Fiscal Year Ending 2006-11 2011-16 Earned Income Tax Borough 2.5% 3.7% Hits: 3
Official_Revenue_Estimate_Methodology_2022.pdf make projec- tions. Pennsylvania DCI is equal to Cash Income less Taxes. (See Table 1.) Cash Income includes all income earned, received or realized by Pennsylvania residents during the calendar year. The measure is different than state personal income reported by associations, nonprofit hospitals and medical associations are exempt from tax. Additionally, canceled policies, premiums for reinsurance, annuity considerations and dividends, earnings of participating members in mutual or stock insurance companies and premiums written by automobile insurance companies for extraordinary medical benefit Hits: 3
Official_Revenue_Estimate_Methodology_2021.pdf make projec- tions. Pennsylvania DCI is equal to Cash Income less Taxes. (See Table 1.) Cash Income includes all income earned, received or realized by Pennsylvania residents during the calendar year. The measure is different than state personal income reported by associations, nonprofit hospitals and medical associations are exempt from tax. Additionally, canceled policies, premiums for reinsurance, annuity considerations and dividends, earnings of participating members in mutual or stock insurance companies and premiums written by automobile insurance companies for extraordinary medical benefit Hits: 3
Official-Revenue-Estimate-Methodology-2020-6.pdf projections. Pennsylvania DCI is equal to Cash Income less Taxes. (See Table 1.) Cash Income includes all income earned, received or realized by Pennsylvania residents during the calendar year. The measure is different than state personal income reported by the U hospitals and medical associations are exempt from tax. Additionally, canceled policies, premiums for reinsurance, annuity considerations and dividends, earnings of participating members in mutual or stock insurance companies and premiums written by automobile insurance companies for extraordinary medical benefit coverage are Hits: 3
Official-Revenue-Estimate-Methodology-2019-06.pdf projections. Pennsylvania DCI is equal to Cash Income less Taxes. (See Table 1.) Cash Income includes all income earned, received or realized by Pennsylvania residents during the calendar year. The measure is different than state personal income reported by the U hospitals and medical associations are exempt from tax. Additionally, canceled policies, premiums for reinsurance, annuity considerations and dividends, earnings of participating members in mutual or stock insurance companies and premiums written by automobile insurance companies for extraordinary medical benefit coverage are Hits: 3
Official-Revenue-Estimate-2020-06.pdf residents decrease by 3.2 percent (2020) and increase by 5.0 percent (2021). Those amounts exclude compensation earned by self-employed and inde- pendent contractors.  Payroll Employment contracts by 453,000 (2020, annualized basis) and expands by 309,700 2020. For CY 2021, profits remain below CY 2019 levels. Forecasts from other entities project declines in corporate earnings ranging from 7 to 30 percent for CY 2020. The IFO’s revised estimate assumes that domestic non-financial corporate profits contract Hits: 3
MTR-2016-10.pdf Growth -0.2% 0.2% -38.7% Dollar amounts are in millions. RECENT TRENDS IN WAGE INCOME Wages and salaries earned by workers are an integral part of the state and national economies. For Pennsylvania, wage income ($308.2 billion) comprised nearly one half (48.4%) of total personal income in 2015. 1 Wage earners typically spend most of their earnings, and changes in annual pay can affect consumer confidence. Employers are more likely to Hits: 3
Ironman_Triathlon_Impact_Analysis_2024_04.pdf spending at restaurants), (2) indirect effects (firms in the supply chain) and (3) induced effects (how workers spend extra incomes earned). The sum of these three impacts is referred to as the multiplier effect, as the original direct spending reverberates through related to the event include: $47,000 in state personal income tax and $120,000 in state sales tax. Local earned income taxes (assumed at 1.5%) total $22,000. Centre County imposes a 5% tax on hotel expenditures, and the Hits: 3
IFO_Hearing_Materials_Feb_22_2022.pdf 0% All Other 36% 3.0% -0.6% -1.3% 2.3% 3.3% Year-Over-Year Growth Average Hourly Earnings 2020.3 2020.4 2021.1 2021.2 2021.3 2021.4 All Private Workers Nominal 4.3% 4.0% All Private Workers Real 3.9% 3.1% 2.4% -2.1% -0.4% -0.7% Inflation and Average Hourly Earnings Notes: Real Average Hourly Earnings deflated by Philadelphia CPI-U. Source: U.S. Bureau of Labor Statistics. Year-over-Year Hits: 3
IFO - Economic and Budget Outlook - January 2012.pdf retirement funds for school and state employees. The PSERS and SERS funds are supported by three sources of income: investment earnings, employee contributions, and employer contributions. Historically, investment earnings have been the primary source of funding for both funds, generating roughly 70 percent of the income for a typical Hits: 3
Five_Year_Outlook_2019.pdf preferred inflation meas- ure (personal consumption expenditures).  Pennsylvania labor force participation rates continue to increase.  Wage earners receive raises that exceed inflation (i.e., real wages increase).  Labor productivity growth reverts to historical averages. Further technical details regarding are as follows:  Department of Aging appropriations grow by 2.1 percent per annum. Those revenues are ear- marked for general operations, PENNCARE, Pre-Admissions Assessment, Caregiver Support, Alz- heimer’s Outreach, Pharmaceutical Assistance Fund and grants for senior centers Hits: 3
2001_hr266.pdf are required to join SERS; and 12 WHEREAS, Both systems are financed through employer and 13 employee contributions and investment earnings, with the 14 employer rate being variable based upon actuarial experience and 15 investment returns; and 16 WHEREAS, The PSERS DB plan issues including the number of 11 participants who enter the PSERS and SERS systems, the number 12 who earn a full benefit, who earn a reduced or partial 13 benefit and who receive no benefit. 14 (4) An analysis Hits: 3
Pensions Code) to bring the Public School Employees' Retirement System (PSERS) into compliance with the following Federal laws: 1) the Heroes Earnings Assistance and Relief Tax Act of 2008 ("HEART Act"); 2) the Uniformed Services Employment and Reemployment Rights Act of 1994 and State Employees' Retirement System (SERS) Codes to bring SERS into compliance with the following Federal laws: 1) the Heroes Earnings Assistance and Relief Tax Act of 2008 (HEART Act); 2) the Uniformed Services Employment and Reemployment Rights Act of 1994 Hits: 3
TC_2022_Educational_Tax_Credits.pdf is a crucial assumption for an analysis that seeks to quantify the potential for improved outcomes for switchers over their earn- ings lifetime. For these reasons, the analysis does not attempt to quantify the potential benefits from private school attendance over of a scholarship. While academic research does identify positive outcomes (e.g., higher test scores and graduation rates and increased earnings potential) from private schools, more data are needed to quantify those potential outcomes for Pennsylvania students. Economic Analysis | Page 28 Hits: 2
State_Tax_Comparison_2023_02.pdf Tax Foundation for CY 2023. 12 For PIT, the tax rate represents the marginal tax rate for a couple that earns $75,000, files a joint return, claims two exemptions and a standard deduction (if applicable). 13 For CNIT, the tax That amount has not been reduced for $2.9 billion of refundable credits paid to Pennsylvania residents, such as the Earned Income Tax Credit ($1.6 billion) and the Additional Child Tax Credit ($992 million). In general, wealthier states have higher Hits: 2
State_Tax_Comparison_2022_01.pdf Foundation for CY 2021. 10 For personal income, the tax rate represents the marginal tax rate for a couple that earns $75,000, files a joint return, claims two exemptions and a standard deduction (if applicable). 11 For corporate net income That amount has not been reduced for $3.2 billion of refundable credits paid to Pennsylvania residents, such as the Earned Income Tax Credit and the Additional Child Care Tax Credit. It also excludes $2.9 billion of Premium and Advance Hits: 2
State_Tax_Comparison_2020_11.pdf CY 2020. 12 For personal income, the tax rate represents the marginal tax rate for a couple that earns $75,000, files a joint return, claims two exemptions and a standard deduction (if applicable). 13 For corporate net income, the tax has not been reduced for $3.2 billion of refundable credits paid to Pennsylvania residents, such as the Earned Income Tax Credit and the Additional Child Care Tax Credit. It also excludes $3.8 billion of Premium and Advance Premium Tax Hits: 2
State-Tax-Comparison-2020-01.pdf CY 2019. 12 For personal income, the tax rate represents the marginal tax rate for a couple that earns $75,000, files a joint return, claims two exemptions and a standard deduction (if applicable). 13 For corporate net income, the tax been reduced for the approximately $2.1 billion of refundable credits paid to Pennsylvania residents, such as the Earned Income Tax Credit and the Education Credit. Due to the progressive federal rate structure, state rankings for federal income tax will be Hits: 2
SR2017-03.pdf Administrators for CY 2017. 9 For personal income, the tax rate represents the marginal tax rate for a couple that earns $75,000, files a joint return, claims two exemptions and a standard deduction (if applicable). 10 For corporate net income has not been reduced for the approximately $2.1 billion of refundable credits paid to Pennsylvania residents, such as the Earned Income Tax Credit and the Education Credit. Due to the progressive federal rate structure, state rankings for federal income tax Hits: 2
Revenue_Estimate_2022_06.pdf 5% (2023). ▪ Wages and Salaries paid to Pennsylvania residents increases by 7.7% (2022) and 5.5% (2023) (excludes compensation earned by self-employed and independent contractors). ▪ Payroll Employment expands by 135,000 (2022, annual average) and 30,000 (2023) net on non-wage income such as dividends, capital gains and net business profits (excludes C corporations, but includes self-employed earnings) through estimated and final payments. Revenue data through May 2022 show that payments attributable to non-wage income received or Hits: 2
Revenue_Estimate_2022_05.pdf 9% (2023). ▪ Wages and Salaries paid to Pennsylvania residents increases by 7.8% (2022) and 5.5% (2023) (excludes compensation earned by self-employed and independent contractors). ▪ Payroll Employment expands by 130,000 (2022, annual average) and 40,000 (2023) net on non-wage income such as dividends, capital gains and net business profits (excludes C corporations, but includes self-employed earnings) through estimated and final payments. Revenue data through May 2022 show that payments attributable to non-wage income received or Hits: 2
Revenue_Estimate_2021_05.pdf 4% (2022). ▪ Wages and Salaries paid to Pennsylvania residents increases by 6.7% (2021) and 4.3% (2022) (excludes compensation earned by self-employed and independent contractors). ▪ Payroll Employment expands by 100,000 (2021, average for full year) and 80,000 Those individuals receive the largest net benefit from enhanced unemployment benefits. The study is based on a median worker that earns roughly $1,000 per week ($52,000 annu- ally), but 60% of PUA recipients report annual incomes of less than Hits: 2
Revenue-Estimate-2020-05-Presentation.pdf is $375 | ~50% wage replacement rate for most  Extra $600 per week up to 16 weeks, regardless of prior earnings  $12/hr wage earner moves from ~50% to ~175% replacement rate High share of claimants are low-wage or part-time  Replacement rate Hits: 2
Response-Letter-9-30-2019.pdf indicates that the additional personal income tax (PIT) would be collected at the local level, similar to the existing local earned income tax (EIT). The Department of Revenue devotes significant resources to ensuring compliance with PIT laws, including the matching of employee contributions to qualified retirement accounts are subject to PIT, but qualified distributions from those accounts (including employer contributions and earnings) are exempt from tax. If Pennsylvania were to impose PIT on retirement income (excluding Social Security), employee contributions already subject Hits: 2
RB_2023_08_PTRR_Expansion.pdf the form of rebates. Under program parameters through 2022, rebates of $250 to $650 were provided to eligible homeowners who earned $35,000 or less of qualified income and rebates of $500 to $650 to eligible renters who earned $15,000 or less of qualified income. 1 Eligible homeowners/renters meet one of four criteria: (1) age 65 or Hits: 2
RB_2022_03_Student_Loan.pdf by the Brookings Institution finds that nearly three-quarters of monthly student loan debt payments (in dollar terms) are from earners in the top two income quintiles. 3 Policymakers will need to compare the benefits of further relief relative to the significant federal costs incurred and potential negative implications for labor force participation that disproportionately benefits upper income earners. 2 See https://www.cbo.gov/system/files/2021-04/56997-PNPI.pdf. 3 The article finds that 40% of Hits: 2
RB_2020_12_PPP_Loans_to_PA_Businesses.pdf The research also finds that the average cost per job saved or retained was many times higher than average annual earnings of employees at eligible firms. For example, three recent academic studies found that (results apply to the U.S., and average cost of $377,700 per job for the April to August time period. 5 By comparison, the average annual earnings for employees at PPP-eligible firms was $45,000. 6  The program resulted in employment gains of 3.2 Hits: 2
PSBA Webinar - IFO - Act5_Actuarial.pdf contributions to a reduction in the investment rate of return.  Under defined benefit funding, employer rates increase when investment earnings are lower than expected.  For employees hired under Act 5, the resulting employer rate increase is mitigated when investment earnings fall below expectations.  Average risk mitigation will be small at first, but it will increase over time as Act Hits: 2
PBB_2023_PID_REPORT.pdf are therefore not included in the resource table below. In calendar year 2021, the office employed 11.5 FTEs who earned an average annual salary of $89,000, not including benefits. The Bureau of Special Funds provides oversight and management of in automobile accidents between 1981 and 1989. The fund will continue to pay existing claims through its balance and interest earnings and is projected to be solvent until 2096. 17-18 18-19 19-20 20-21 21-22 MCARE New Hits: 2
PBB-Board Hearing Jan 23 2020.pptx revenues Economic metrics for MTBI, RDTC and KIZ ▪ Gross ROI and net ROI (deducts alternative use of monies) ▪ GDP | labor earnings | number of jobs ▪ Not possible to estimate certain spillover effects and synergies ▪ Key : incentivization parameter | use consensus of existing research is incentivized ▪ Gross ROI: 15 cents per dollar | Net ROI: 9 cents per dollar ▪ $5.9m GDP | $2.5m labor earnings | 39 FTEs Recommendations ▪ If retained, convert to competitive grant program ▪ Require investment to underserved/unserved areas ▪ Report metrics: location of Hits: 2
Official-Revenue-Estimate-2020-06-Presentation.pdf is $330 | ~50% wage replacement rate for most  Extra $600 per week up to 16 weeks, regardless of prior earnings  $12/hr wage earner moves from ~50% to ~175% replacement rate High share of claimants are low-wage or part-time  Replacement rate Hits: 2
NewsStand_2019_July.pdf debt relief to move to a different state or change jobs and averaged more than $4,000 in total additional earnings over a three-year period. Philadelphia Region Inflation Remains Steady On July 11, the U.S. Bureau of Labor Statistics prior year, data show that Pennsylvania personal income grew by 3.5% in the first quarter with the larg- est earnings increase coming from government transfers. Transfer receipts grew by 7.7% year-over-year in Pennsylvania and 6.9% nationally Hits: 2
NAP-2018-03.pdf neighborhood organizations purchase goods and services from businesses in other industries (indirect spending). The additional direct and indirect spending increases earnings, as new jobs are created, existing wages are increased and enhanced profits flow through to business owners. The economic activity generated by the higher earnings creates yet another round of effects (induced spending). A simplified way to measure the impacts of direct spending on the Hits: 2
Monthly_Economic_Update_June_2020.pdf sufficient revenues to continue operations. For FY 2019-20, the primary driver of this outcome is the projected reduction in earned income tax revenues, with an estimated shortfall of $526 million. Other revenue sources including amusement tax (-25%), parking revenue (-20% Compared to the prior year, data show that U.S. personal income grew by 11.7% in April. The largest earnings increase was from government social benefits, with the unemployment insurance category growing 1,574%. The large increase in government support Hits: 2
June_Revenue_Estimate_2021.pdf 4% (2022). ▪ Wages-Salaries paid to Pennsylvania residents increases by 6.4% (2021) and 4.3% (2022) (ex- cludes compensation earned by self-employed and independent contractors). ▪ Payroll Employment expands by 100,000 (2021, average for full year) and 80,000 Those individuals receive the largest net benefit from enhanced unemployment benefits. The study is based on a median worker that earns roughly $1,000 per week ($52,000 annu- ally), but 60% of PUA recipients report annual incomes of less than Hits: 2
ITEP-Presentation-11-14-2019.pdf Makes sure that a company’s tax bill doesn’t depend on its legal form. It should matter what you earn, not how many subsidiaries you hide the earnings in. Combined Reporting: Why Not?  “Manufacturing companies will flee to other states.” (Empirically, there’s no evidence this has Hits: 2
IFO_Response_Letter_April_12_2022.pdf tax.  The additional personal income tax (PIT) would be collected at the local level, similar to the existing local earned income tax (EIT). The Department of Revenue devotes significant resources to ensure compliance with PIT laws, including the matching of employee contributions to qualified retirement accounts are subject to PIT, but qualified distributions from those accounts (including employer contributions and earnings) are exempt from tax. If Pennsylvania were to impose PIT on retirement income (excluding Social Security), employee contributions already subject Hits: 2
IFO_Hearing_Packet_Feb2018.pdf percent of payroll. 1 2 3 4 For SERS, the normal cost represents the employer rate to pay pension benefits earned in that year for post-Act 120 employees only. Therefore, this measure of normal cost will be lower than the andfunding deferrals) in prior years. For PSERS, the normal cost represents the weighted average employer rate to pay pension benefits earned in that year for both pre- and post-Act 120 employees. The normal cost for post-Act 120 employees is Hits: 2
HTAE_2019_05_15.pdf Wage Proposal Increase minimum wage from $7.25 to $12.00/hr (+65.5%).  Note: average wage for workers earning <$12.00 is $9.73 (+23.3%).  Effective July 1, 2019. Applies to entire state.  On July 1 22,456 $21,614 $29,639 $43,838 Avg Annual Growth -0.6% 4.7% 11.8% Note: Includes wage earners only who report that wage compensation comprises at least 90% of taxable income in both years. Filers do not change Hits: 2
FTA_Student_Loan_Presentation_Oct_2023.pdf Powell and Turner (Jan 2023) Survey of Current Finances (2019) 60% payments from top 40% 7% payments from bottom 20% earnings median share share decile earnings payments balances 1 $12,217 1.1% 3.1% 2 $25,453 3.9% 4.1% 3 $36,652 4 Hits: 2
Five_Year_Outlook_2022.pdf is negative due to retirements at the upper end of the pay scale that are replaced by younger workers who earn lower wages. The second factor is a general adjustment that reflects (1) a cost- of-living increase and (2) a 696 Less Field Prizes & Comm. -3,930 -3,915 -4,056 -4,206 -4,361 -4,523 -4,691 Transfers, Earnings and Lapses 247 91 104 99 94 89 87 Net Revenue 2,100 1,898 1,947 1,981 2 Hits: 2
Economic_and_Revenue_Update_2021.pdf Amount % Amount % Property Tax $12,285 44.5% $13,052 42.4% $13,930 44.3% $14,301 45.2% Earned Income Tax 1,476 5.4 1,563 5.1 1,657 5.3 1,599 5.1 Other Local 24 March 2021 PIT Revenue Proposal: Impact on Average Effective Tax Rates Summary The higher SP thresholds disproportionately impact wage earners at lower end of income distribution and greatly reduce the average effective tax rate paid on that type of income Hits: 2
CNIT-Rate-Cut-2018-04.pdf the CBO. 6  The Tax Policy Center assumes that 20 percent of the tax is borne by capital that earns a normal return, 60 percent is borne by capital that earns a supernormal (i.e., above average) return and 20 percent is borne by labor. 7  The Tax Foundation cites Hits: 2
Budget Hearings Packet.pdf are percent of payroll. 1 For PSERS, the normal cost represents the weighted average employer rate to pay pension benefits earned in that year for both pre- and post-Act 120 employees. The normal cost for post-Act 120 employees is 5 percentage points in any year. 4 For SERS, the normal cost represents the employer rate to pay pension benefits earned in that year for post-Act 120 employees only. Therefore, this measure of normal cost will be lower than the Hits: 2
Budget Hearings Packet- Web Version.pdf are percent of payroll. 1 For PSERS, the normal cost represents the weighted average employer rate to pay pension benefits earned in that year for both pre- and post-Act 120 employees. The normal cost for post-Act 120 employees is 5 percentage points in any year. 4 For SERS, the normal cost represents the employer rate to pay pension benefits earned in that year for post-Act 120 employees only. Therefore, this measure of normal cost will be lower than the Hits: 2
2013-01 Monthly Economic Report.pdf 2 to 4.2 percent during 2011 and 2012, was al- lowed to expire. 1 For 2013, the average wage earner in Pennsylvania who earns approximately $50,000 will realize a $1,000 reduction in their annual take-home pay. Due to the expiration, it Hits: 2
2012-09 Monthly Economic Summary 7.pdf Pennsylvania’s General Fund revenues. Over three-quarters of the $12.0 billion collected from PIT remittances were attributable to earned income (typically wages and salary). While Pennsylvania tax law does not allow individu- als to claim deductions for contributions made s, the state does not tax that income when individuals withdraw the money during retirement. Taxing resi- dents when they earn income rather than when they spend income (i.e., in retirement) relieves the tax Snapshot: Demographics and the Impact on Hits: 2
TC_2020_Organ and Bone Marrow Donation Tax Credit.pdf incentives, 30 states allow state employees to take paid leave (sepa- rate from sick or other types of earned leave) for the purpose of living organ or bone marrow donation. 12 Arkansas, California and Delaware extend these requirements to public school Hits: 1
TC_2019_Film_Production_Tax_Credit_Report.pdf goods and services produced in the state economy during the calendar year. It includes compensation paid to or earned by all individuals who supply labor to produce goods and services, including partners and independent contractors. It also reflects the economic value Hits: 1
Tax-Foundation-Presentation-11-14-2019.pdf of capital investment  High Corporate Net Income Tax (CNIT) rate  Regular property assessments not required LOCAL  Local earned income tax base differs from state income tax base  Localities rely on local gross receipts taxes (GRTs), including Mercantile Hits: 1
SUT Exemption for Aircraft - January 2013.pdf and Industrial Machinery Equipment Repair and Maintenance (NAIC 811300). Data from BLS show that employees of that industry earn a wage similar to MRO service providers. Independent Fiscal Office Page 21 Technical Appendix Industries were selected for use in this analysis Hits: 1
State_Tax_Comparison_2024_02.pdf Free Kids for CY 2024. 10 For PIT, the tax rate represents the marginal tax rate for a couple that earns $75,000, files a joint return, claims two exemptions and a standard deduction (if applicable). 11 For CNIT, the tax Hits: 1
State and Local Tax Burden Study.pdf personal income, the tax rate represents the marginal tax rate for a couple that files a joint return earning $50,000. For corporate net income, the tax rate represents the highest marginal tax rate. 9 See http://www.taxadmin.org/fta Hits: 1
Senate_Appropriations_Committee_Response_Letter_2023.pdf old. Increases in labor supply among married mothers with very young children suggest that CDCC benefits may generate long-run earnings gains.” 3 ▪ A recent presentation by the Congressional Budget Office (CBO) notes the following impact on low- income parents from Hits: 1
SD_Prop_Tax_Update_Jun_2023.pdf central region of the state. The top counties had a relatively higher reliance on property taxes (as opposed to local earned income taxes or state funds) for school district funding. For FY 2021-22, current-year property taxes as a share Hits: 1
SD_Prop_Tax_Update_Aug_2022.pdf share of statewide total local school district revenue was 77.5% in FY 2020-21. (Other primary revenue sources included earned income taxes (9.2%) and delinquent taxes (all types, 3.5%)). The average for the top five counties shown was Hits: 1
SD_Property_Tax_Forecast_Nov_2021.pdf exclusion to distribute property tax relief allocated from slots proceeds (Act 1 allocations). A few school districts also increased their earned income taxes under Act 1 to provide for additional homestead exclusions. Table 5 (next page) provides estimates of FY 2019- Hits: 1
SD-Property-Tax-Forecast-2020.pdf exclusion to distribute property tax relief allocated from slots proceeds (Act 1 allocations). A few school districts also increased their earned income taxes under Act 1 to provide for additional homestead exclusions. Table 5 (next page) provides estimates of FY 2017- Hits: 1
SD-Property-Tax-Forecast-2019.pdf exclusion to distribute property tax relief allocated from slots proceeds (Act 1 allocations). A few school districts also increased their earned income taxes under Act 1 to provide for additional homestead exclusions. Table 5 (next page) provides estimates of FY 2016- Hits: 1
Response_Letter_9_23_2019.pdf realty transfer) and taxes not based on income or consumption (e.g., inheritance). The analysis also did not consider local earned income or sales taxes. Based on these criteria, Table 2 includes the following General Fund taxes: (1) state personal income Hits: 1
Response-Letter-05-13-2019.pdf the IFO. 8 Includes all school district property taxes (residential, commercial, etc.). All years estimated by the IFO. 2 New earned income tax (EIT) rates depend on the existing rate levied by the school district. 1 New PIT rates would be Hits: 1
RB_2024_04_Older_Workers.pdf workers over time to determine various characteristics such as worker age, rates of quits and new hires, and average monthly earnings across various sectors. Because the database uses administrative records and not surveys, it provides the best source of information regarding Hits: 1
RB_2023_08_Wage_Contract.pdf illustrates the impact of the compensation provisions contained in the ratified AFSCME CBA for an average full-time state employee earning $52,070 on June 30, 2023. 3 Over the four-year period, salary increases $11,506 (22.1%), and healthcare Hits: 1
RB_2023_08_Property_Tax_Burden_by_County.pdf County is likely due to multiple factors including a relatively higher reliance on school district property taxes (as opposed to earned income taxes) and a relatively high proportion of vacation/secondary homes. • Snyder County residents and businesses remitted 1.51% of Hits: 1
RB_2023_06_Jackpot_Lottery.pdf and other Lottery games are deposited into the Lottery Fund that benefits older Pennsylvanians. The roughly $279 million net revenue earned from Mega Millions and Powerball ticket sales funds the following programs supported by the Lottery Fund in FY 2022-23 Hits: 1
RB_2023_05_Migration.pdf concentrated in the top income group. 1 These data generally correspond to tax years 2019 and 2020, when income was earned or received. See https://www.irs.gov/statistics/soi-tax-stats-migration-data-2020-2021. PA Taxpayers Continue to Migrate Hits: 1
RB_2022_09_Student_Loan_Forgiveness.pdf of outstanding federal student loans and to enact various changes to the program. The main provisions are as follows: • Borrowers earning less than $125,000 (single) or $250,000 (married) a year can qualify for up to $10,000 of debt Hits: 1
RB_2022_09_SNAP_Changes.pdf incomes just below the threshold. For a household of 4, the monthly SNAP benefit ($939) is largely equal to income earned by a member who works 20 hours per week at $15 per hour ($1,200 per month, $1,052 after Hits: 1
RB_2022_08_Worker_Shortage.pdf with family has greater value since the start of the pandemic. Workers in households with more than one source of earnings may have quit work or reduced hours from full to part-time. • Higher SNAP benefits and ongoing Emergency Allotments. Relative Hits: 1
RB_2022_07_Worker_Shortage.pdf with family has greater value since the start of the pandemic. Workers in households with more than one source of earnings may have quit work or reduced hours from full to part-time. • Higher SNAP benefits and ongoing Emergency Allotments. Relative Hits: 1
RB_2022_06_PA_Migration.pdf 50,000 of AGI (2,988). 1 These data generally correspond to tax years 2018 and 2019, when income was earned or received. See https://www.irs.gov/statistics/soi-tax-stats-migration-data-2019-2020. PA Residents Migrating to Southern Hits: 1
RB_2022_06_Act_105_Pre-Funding_Impact.pdf end of the 30-year period, the overall SERS UAL would be unaffected if all investments, including the advance payment, earned the assumed rate of return in effect at the time the advance payments were made. 1 The setoff credit schedule Hits: 1
RB_2021_09_Pension_Outlook.pdf billion in unfunded liabilities, equivalent to nearly $6,000 per resident. These data do not reflect the strong investment returns earned since that time, which would reduce the per capita amount. The figures in Table 5 are for illustrative purposes only Hits: 1
RB-2020-10-Impact_of_TCJA_on_PA_Taxpayers.pdf Income, and Taxable Income cannot be negative. 5 The Final Income Tax and Final Average Tax Rate computations include refundable earned income tax credit (EITC) and child tax credit amounts, as well as the alternative minimum tax (AMT) and net investment Hits: 1
RB-2018-01.pdf exclusion to distribute property tax relief allocated from slots proceeds (Act 1 allocations). A few school districts also increased their earned income taxes under Act 1 to provide for additional homestead exclusions. Table 5 (next page) provides estimates of FY 2015- Hits: 1
PSERS_Stress_Test_Impact_Analysis_2024.pdf must increase by $11.3 billion during the second half to offset the reduced contributions and returns they would have earned. The scenario results in a 92.3% funded status at the end of FY 2051-52. Summary of Simulation and Hits: 1
PSERS_Stress_Test_Impact_Analysis_2023.pdf must increase by $13.3 billion during the second half to offset the reduced contributions and returns they would have earned. The scenario does result in near full-funding status (97.6%) by the end of FY 2050-51. Summary of Hits: 1
PSBA-Property-Tax-Update-March-2020.pdf 2020 School District Revenues: FY 2017-18 March 13, 2020 2 Source Amount Percent Property Tax $13,511 44.6% Earned Income $1,592 5.3% Other Local Sources $2,347 7.8% Act 1 Allocations (slots) $533 1.8% State Hits: 1
PSBA Presentation - Final.pdf 2017 2 FY14-15 School District Revenues 1/19/2017 3 Source Amount Percent Property Tax $12,285 44.5% Earned Income $1,476 5.4% Other Local Sources $2,126 7.7% Act 1 Allocations (slots) $530 1.9% State Hits: 1
Property-Tax-Update-August-2018.pdf Property Tax $13,052 42.4% State (exclude Act 1) $10,779 35.1% Other Local $2,224 7.2% Earned Income $1,563 5.1% Act 1 Allocations $532 1.7% Federal $843 2.7% Other (debt related) $1,759 Hits: 1
Presentation_PICPA_9-24-2013.pdf 8 $0 $20 $40 $60 $80 $100 $120 2005 2008 2011 2014 2017 2020 2023 CBO Forecast of Federal Reserve Earnings billions of dollars Losses from sales of securities $111 billion $34 billion 24 . Sept . 2013 9 How Are Revenues? Revenues Hits: 1
Presentation_PICPA_12-3-2014.pdf simulation exercise. Some Positives and Negatives. • Energy prices very low. Inflation and interest rates low. • Flat wage growth. Many wage earners essentially treading water. • Housing recovery less robust than assumed. 3.Dec.2014 The Economic Outlook 12 3.Dec.2014 Pennsylvania Hits: 1
Presentation_2017_02_10_EPLC.pdf 9, 2017 FY14-15 School District Revenues 10.Feb.2017 22 Source Amount Percent Property Tax $12,285 44.5% Earned Income $1,476 5.4% Other Local Sources $2,126 7.7% Act 1 Allocations (slots) $530 1.9% State Hits: 1
Presentation-2019-3-1-EPLC.pdf December2018). School District Revenues: FY 2016-17 March 1, 2019 18 Source Amount Percent Property Tax $13,052 42.4% Earned Income $1,563 5.1% Other Local Sources $2,224 7.2% Act 1 Allocations (slots) $532 1.7% State Hits: 1
PBB_2022_DHS_REPORT_ADDENDUM.pdf higher, with more incentive funding provided the higher the STARS level. ▪ Tuition assistance is provided to child care staff who earn credits in early childhood education through contracts with partnering institutions of higher education. ▪ PDOs were established in October 2019 and Hits: 1
PBB_2019_DOBS_Report.pdf designed to assess the level of risk in the following six areas: capital adequacy, asset quality, management capability, earnings, liquidity and sensitivity to market risk with an overall Composite rating assigned. The CAMELS rating system is numeric based from 1 to Hits: 1
Newsstand_2019_March.pdf Labor Market Begins to Translate to Wage Gains On March 8, the U.S. Department of Labor released average hourly earnings for U.S. production and non- supervisory employees (by industry) for February 2019. The latest data show that the average Hits: 1
NewsStand_2019_August.pdf that require an advanced degree, such as pharmacists, physicians and surgeons, dentists and veterinarians, as compared to 2000. However, median earnings gains for heath care workers with a Bachelor’s degree or less were relatively small when compared to workers with Hits: 1
Newsstand_2018_November.pdf An October analysis of Current Population Survey data by the website Governing finds that median (as opposed to average) real earnings for individuals with a bachelor’s degree or high school diploma declined for the first two quarters of 2018. The Hits: 1
MTR-2016-02.pdf in the third quarter of 2015 on a year-over-year basis. 1 For the fourth quarter, analysts project that earnings will continue to decline by 2% to 10% compared to the prior year. If these projections are correct, it will Hits: 1
MTR-2015-10.pdf Annual COLAs are determined by the U.S. Department of Labor based on the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W), which measures inflation’s effect on a typical bundle of goods and services purchased by Hits: 1
MRU_2024_1.pdf estimate. ▪ Treasury collections of $114.0 million (+$81.5 million, +250.8%) included $59.0 million in unusual one-time earnings. Monthly Revenue Update January 2024 FY 2023-24 Revenue Performance Through January January Collections FY Collections Actual Estimate $ Diff Actual Hits: 1
Monthly_Economic_Update_October_2020.pdf respectively. The accommodation and food services (-57.0%) and the arts, entertainment and recreation (-42.8%) sectors recorded the largest earnings declines in Pennsylvania. Pennsylvania Records 10th Largest Percent Decrease in State GDP in Q2 Pennsylvania real Gross Domestic Product (GDP Hits: 1
Monthly_Economic_Update_May_2021.pdf the increased demand as (1) many individuals continue to receive enhanced unemployment benefits, which may exceed wages that could be earned through employment and/or (2) children may be at home and require supervision. Currently, Pennsylvania does not require individuals who Hits: 1
Monthly_Economic_Update_June_2021.pdf UC claims) are an exception to this trend. Workers in this age group are often students and not typically primary earners in their households, which may explain the lower share of UC claims. Monthly Economic Update June 2021 14-24 25- Hits: 1
Monthly_Economic_Update_July_2021_Final.pdf Third, the data include tabulations by income group and total income of migrants. However, if the migrant was a wage earner, it is likely that the job (and associated income) remained in the state and did not migrate with the taxpayer Hits: 1
MER-2015-03.pdf influx of individuals into the rental market, due to declining homeownership rates. Therefore, Penn‐ sylvanians aged 20‐30, who typically earn less than the statewide median, are likely to be disproportion‐ ately affected by recent trends in the rental market. March Hits: 1
MER-2014-07.pdf fers such as Social Security and disability payments, recipients’ spending patterns are likely quite differ‐ ent than a typical wage earner. It is likely that a larger share of that income is spent on items not subject to sales and use Hits: 1
IFO Five-Year Outlook.pdf with pension costs.  Out-year PSERS rates could be higher if investment returns do not match the 7.5% earnings assumption. The Economic and Budget Outlook Slide 31 15.Nov.2012 Revenues The Economic and Budget Outlook Slide 32 15 Hits: 1
House Budget Hearing Request.pdf and out migration by the age of the primary tax filer. These data may be utilized to estimate the income earners and dependents migrating in and out of the state by age group. Tables presenting the IRS migration data for 2013 Hits: 1
Five_Year_Outlook_Presentation_2022.pdf Advisers in the White House and as an economist at the Federal Reserve Board and the International Monetary Fund. He earned his Ph.D. in economics from Harvard University and his A.B. in economics from Princeton University. November 15, 2022 Hits: 1
Five_Year_Outlook_2021.pdf 844 Less Field Prizes & Comm. -4,183 -3,863 -3,987 -4,152 -4,324 -4,505 -4,694 Transfers, Earnings and Lapses 113 142 111 107 103 99 95 Net Revenue 2,119 2,019 2,025 2,077 2 Hits: 1
EPLC_April_2024.pdf 99% (2023); 8.49% (2024); and 7.99% (2025) • Realty Transfer: Massive lock-in effect for 2023-24 • Treasury balances earn ~5.25% Latest General Fund Revenue Forecast Notes FY 2023-24 FY 2024-25 Amount $ Change Amount $ Change General Fund Hits: 1
EPLC_3_4_2022_update.pdf Impact School District Revenues: FY 2019-20 March 4, 2022 26 Source Amount Percent Property Tax $14,276 43.2% Earned Income $1,673 5.1% Other Local Sources $2,464 7.5% Act 1 Allocations (slots) $534 1.6% State Hits: 1
EPLC-2-19-21.pdf Impact School District Revenues: FY 2018-19 February 19, 2021 25 Source Amount Percent Property Tax $13,930 44.3% Earned Income $1,657 5.3% Other Local Sources $2,569 8.2% Act 1 Allocations (slots) $533 1.7% State Hits: 1
EPLC Feb 2020 FINAL.pdf paid School District Revenues: FY 2017-18 February 28, 2020 17 Source Amount Percent Property Tax $13,511 44.6% Earned Income $1,592 5.3% Other Local Sources $2,347 7.8% Act 1 Allocations (slots) $533 1.8% State Hits: 1
Economic_and_Revenue_Update_2020_10.pdf through the remainder of FY 2020-21, due to continued unemployment, lower wage growth and reduced non-withheld earnings (e.g., net profits, capital gains, dividends, interest and rental payments). Other Revenue Sources Other notable updates to the revenue estimates include Hits: 1
2021-SD-Property-Tax-Forecast.pdf exclusion to distribute property tax relief allocated from slots proceeds (Act 1 allocations). A few school districts also increased their earned income taxes under Act 1 to provide for additional homestead exclusions. Table 5 (next page) provides estimates of FY 2019- Hits: 1
2013 Appropriation Hearings Background Information.pdf Both Recession and Recovery,” Wall Street Journal, February 7, 2013, p. A5. Schwartz, Nelson. “Restored Payroll Tax Pinches Those Who Earn the Least,” New York Times, February 8, 2013, p. B1. Shah, Neil. “Tax Holiday Ends, Consumers Scrimp,” Wall Street Journal Hits: 1
2012-08 Monthly Economic Summary_Final.pdf When resolved, corporations will have a clearer understanding of the economic outlook and the best manner to direct their retained earnings. In the near term, analysts expect that profits will remain at relatively high levels, as- suming that the private sector Hits: 1
Pensions Law (Law), by extending through calendar year 2005 the authority of the Pennsylvania Municipal Retirement System (PMRS) to use interest earnings in excess of regular interest to pay administrative expenses not covered by the $20 a member per year assessments. Act Hits: 1