The Right Way to Grow Tax Revenue

A story that got five seconds on the evening news and just a few paragraphs of ink on page three deserves a lot more attention. The latest figures from the Department of Labor & Industry show that the state’s unemployment level under Governor Tom Corbett now stands at 5.6 percent. It’s the lowest level in the state since 2008; far lower than the national rate of 6.3 percent.

To the delight of the business community most of the new jobs created were within the private sector, which added 21,700 jobs to reach a record high of 5,078,000 while public sector jobs were up by 3,000. Additionally, as other states are seeing their rate lowered by having their workforce leave the job market altogether, Pennsylvania has added the number of people seeking employment.

“We’ve been saying all along that the right way to grow revenues is through growing jobs,” said PMA Executive Director, David N. Taylor. “Under Governor Corbett, that’s exactly what Pennsylvania has been doing.”

The good news will keep giving. Deputy Director of the Independent Fiscal Office, Mark Ryan, said that the 2014-15 fiscal year, which starts on July 1, should see a revenue growth of 3.2 percent or $900 million. The problem with this past fiscal year is that the federal government increased taxes, causing an influx of taxes being filed in the previous tax year. This is a problem that many other states are also incurring, complicating their state budgets as well.

“We believe the jobs picture will continue to improve and more jobs will mean more tax revenue,” Ryan said.

For more on the current revenue problem, watch this previous episode (https://vimeo.com/97133709) of PMA Perspective where this issue is fully examined.