Massive Budget Hole Awaits New Legislature

Member Group : Commonwealth Foundation

NEWS RELEASE from the Commonwealth Foundation

Massive Budget Hole Awaits New Legislature
Commonwealth’s revenue shortfall grows to $560 million

HARRISBURG, PA — The Commonwealth Foundation today warned the newly minted General Assembly that it must immediately heed the voters’ call for "change" by reining in wasteful spending, otherwise painful tax increases are forthcoming.

The Pennsylvania Department of Revenue, released the October revenue collections showing state collections were $280 million below estimate for the month, and now $565 million short for the fiscal year to date.

This shortfall far exceeds previous years in which a tax increase occurred, and is already well above the $350 million in savings Governor Rendell believes can be achieved by a hiring freeze, through only the first four months of the fiscal year.

"We’re already facing a larger revenue shortfall than that of the entire 2002-03 fiscal year that proceeded the 9-11 recession, and we still have eight months to go," said Matthew J. Brouillette, president of the Commonwealth Foundation. "The General Assembly responded to that fiscal crisis with a $1.5 billion tax increase, including a 10 percent hike in the personal income tax.

"If the new legislature does not cut waste and re-prioritize spending, a tax increase significantly larger than the one six years ago will be unavoidable."
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The Commonwealth Foundation ( is an independent, non-profit public policy research and educational institute based in Harrisburg, PA.

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CONTACT: Matthew J. Brouillette or Joe Sterns at 717.671.1901