Legislative fiscal office: collections through January strong but HR 1, tax changes complicate outlook

Sam Schaffer of the Legislative Fiscal Division briefed the Revenue Interim Committee on state revenue collections through January. "Ongoing growth is 5.6% on the far right hand side," he reported, noting that about 55% of general fund revenue is typically collected by January and that 45% of the year remains to be recorded.

Schaffer reviewed sector performance: individual income tax collections showed year-to-date growth (he cited 4.4% year-to-date for individual income), withholding remains strong but will likely slow after the implementation of House Bill 337 on January 1, and corporate collections have underperformed (corporate is down roughly 10–15% compared with last year). He also flagged a potential federal impact from HR 1, which staff estimated could lower state revenue by about $115 million annually, and said the largest swings — particularly large refunds and corporate estimated payments — typically arrive in March and April.

Why it matters: The revenue forecast underpins HJ 2 and budget planning. Schaffer described how one-time transfers and accounting changes can mask ongoing growth; the committee emphasized the need to monitor April filings and suggested follow-up in the finance committee and at the summer outlook.

Next steps: Committee members asked staff for follow-up materials on SEPTA (the state equalization/property tax account), on assumptions in the revenue estimate, and to update modeling as April receipts arrive.

Sources: Sam Schaffer testimony to the Revenue Interim Committee; Legislative Fiscal Division handouts.