Last week, Acting Revenue Secretary Pat Browne announced that Pennsylvania collected $6.2 billion in General Fund revenue during March — $499.4 million, or 8.8 percent, more than expected. The March figures are in line with year-to-date collections, which total $32.3 billion, or $1.1 billion above estimate.
Corporation tax revenue came in at $3 billion, or $367.7 million above estimate. Year-to-date corporation tax collections total $6.2 billion, which is 16.4 percent above estimate.
The strong corporation tax revenues are bolstering advocates’ calls for accelerating the Corporate Net Income (CNI) tax reduction. Legislation signed into law last year, decreased Pennsylvania’s CNI from 9.99 percent last year to 8.99 percent on January 1, 2023. The CNI is scheduled to phase down to 4.99 percent by 2031.
“Accelerating the phase down of Pennsylvania’s CNI will make us more competitive with other states and show the world that the commonwealth is open for business,” PA Chamber President and CEO Luke Bernstein said in an interview with PennLive. “With the state’s corporation tax revenue collections nearly $900 million ahead of projections for the year, now is the time for lawmakers to continue the bipartisan progress they made in last year’s budget, speed up the CNI reduction, and unleash Pennsylvania’s full economic potential.”
During the gubernatorial campaign, then-candidate Josh Shapiro called for reducing the CNI to four percent by 2025. A recent poll commissioned by the Commonwealth Foundation found that 77 percent of Pennsylvanians support reducing the CNI to four percent by 2025.
When he delivered his budget address in March, Gov. Shapiro noted the bipartisan efforts last session to phase down the CNI from 9.99 percent to 4.99 percent by 2031 and said that “while the work that you began is critically important, we need to speed up these cuts.” While his proposed 2023-2023 budget does not reflect an accelerated phase down of the CNI, he asked the legislature “to work together to do just that.”
Republicans in the Senate have introduced legislation to expedite the CNI reduction by immediately dropping it to 7.99 percent and then reducing it an additional point every January until it reaches 4.99 percent.
Additional March and year-to-date state revenue collections can be found here.