Pennsylvania's budget hole is getting incrementally deeper

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The Pennsylvania Department of Revenue's latest collections report brings more bad news for the state.

(PennLive archives)

"Below estimate."

Those words, which strike fear into the hearts of Gov. Tom Wolf and the Pennsylvania Legislature, appear 13 times in the Department of Revenue's latest collections report.

In fact, they might have appeared more often had the dispatch's writer not swapped them out for "less than anticipated" three more times.

Following a trend that's persisted for much of the year, Pennsylvania's November revenue collections ran 3.8 percent behind budget estimates. In all, the state pulled in $2 billion which, in real terms, meant it fell $79.5 million behind anticipated revenue.

Since the turn of the fiscal year in July, Pennsylvania has collected about $10.8 billion for the General Fund. That's 2.4 percent, or $261.8 million, "below estimate."

The deficits were felt across the board: Sales tax collections are $122 million behind for the year to date. Income taxes are $81.1 million behind. Realty transfer taxes are $28 million behind.

According to the Independent Fiscal Office, which issued a gloomy five-year outlook last month, the state faces a projected current-year budget deficit of $500 million. That's expected to balloon to a $3 billion per year deficit by 2021.

What does this mean for you?

Earlier this year, Wolf and the Legislature managed to cobble together a budget that avoided personal income and sales tax increases by relying heavily on new revenue from a gambling expansion, new liquor permits and increased tobacco taxes, among other things.

It's unlikely such machinations will work again, so broad-based tax increases and a possible new tax on Marcellus Shale gas extraction could be on the menu in 2017.

And the greater the deficit, the more pressure Pennsylvania will feel from credit agencies who've already issued warnings about the state's looming structural deficit and further downgrades that would make borrowing more expensive.

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