Pa.'s revenues continue to fall amid COVID-19 pandemic, and other news ...

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Pa.'s Budget Issues Grow as State Revenues Continue to Fall Amid COVID-19 Pandemic

The COVID-19 pandemic continues to impact Pennsylvania's tax collections, as another month of disastrous revenue numbers has the Commonwealth limping to the end of the current fiscal year.

The impact of the novel coronavirus and the measures implemented by the state to mitigate the virus' spread continues to wreak havoc on the state's budget. Last month, the state's top budget officials discussed the significant impact the COVID-19 pandemic may have on the state's budget. On Friday, the news continued to be grim as the Pennsylvania Department of Revenue reported that the state collected $2.2 billion in taxes in April, nearly half of what the state expected to collect before the COVID-19 outbreak.

The department said that roughly $1.7 billion of the shortfall in April came from delaying the state's tax-filing deadline to later in the summer. Additionally, nearly $400 million dollars in lost revenue was attributed to the economic slowdown caused by the business shutdown orders implemented to fight the spread of the virus.

Last week it was reported that with the lack of traffic on Pennsylvania's roads, projects funded through the state's gasoline tax, which sits at 57.6 cents per gallon, will be impacted significantly next year. Also, with the state's casinos remaining closed, the Commonwealth is losing nearly $250 million a month in revenue. Along with over 33,000 direct and indirect jobs, the casinos also kick in over $1.5 billion in revenue each year to state and local governments.

The continued economic downturn caused by the COVID-19 outbreak offers the latest realization of the looming budget deficit facing Gov. Tom Wolf and the state Legislature. Last month, the administration projected that Pennsylvania's budget deficit could reach $5 billion for the current fiscal year, which ends on June 30.

But even as the General Assembly positions budget-related bills this month, the current economic situation facing the Commonwealth has also impacted the process by which the state negotiates and passes its budget. Legislators are looking into possibly passing a short-term, five-or-six month budget to address the deficit and fill the gap for the remainder of the year. The plan would be to then take a look at the complete financial picture after November's general election, or even into January of 2021, and pass a budget for the remainder of the fiscal year.

To help address the economic fallout from the virus, the administration has taken some action to reduce spending, including laying off more than 2,500 employees, freezing pay for nearly 14,000 state employees, limiting new hiring and department purchases. In addition, the governor said he is relying on federal aid to help fill other gaps. Pennsylvania has about $4 billion in COVID-19 aid it can use to cover costs associated with the pandemic.

In early February, Gov. Tom Wolf proposed a $36.1 billion budget for the upcoming year, a spending increase of 4.2 percent.

Daily COVID-19 update for Pennsylvania

The Pennsylvania Department of Health reported 825 new positive confirmed cases of COVID-19 statewide, bringing the state total to 50,092. In addition, 2,458 Pennsylvanians have died from complications from the virus. To date, there have been more than 195,000 negative cases across the state.

Gov. Tom Wolf is still asking all Pennsylvanians who must leave their homes for life-essential reasons to wear a mask to help stop the spread of the virus . An executive order was issued on April 15 requiring customers entering a place of business to wear a mask.

Daily COVID-19 update for Ohio

The Ohio Department of Health reported 20,474 cumulative cases of COVID-19 and 1,056 deaths, including probable cases, by Monday afternoon. There have been 3,809 hospitalizations and 1,090 ICU admissions.

Other News...

As COVID-19 pandemic hits revenues, school districts prepare for cuts. With a looming $5 billion budget deficit at the state, school districts throughout Pennsylvania are preparing for drastic cuts to programs. At the same time, Gov. Tom Wolf is asking for more than $500 million in emergency funding from the federal government to help struggling school districts weather the storm created by the COVID-19 pandemic.

How will retail car sales be impacted long-term by coronavirus pandemic? McNees attorney Stephen Moore discusses how automotive retailing has been, and will continue to be, impacted by the COVID-19 pandemic in the latest McNees Auto Dealer Blog.

Ohio Gov. DeWine backtracks on mask requirement. Over the weekend, Ohio Gov. Mike DeWine said his order to require all Ohio residents to wear face coverings and masks "went too far." The governor rescinded the order, but will still require employees to wear masks and highly recommends customers to do the same when entering businesses.

Hair salons, spas will not reopen under Gov. Wolf's 'yellow' phase. When Gov. Tom Wolf announced the reopening of 24 counties in the northern region of the state and their movement from his plan's "red" phase to "yellow," his administration also clarified that hair and nail salons, as well as other personal grooming businesses will not be permitted to open.

Unprecedented times, but McNees is here to help

The situation surrounding COVID-19 is changing by the hour. Capitol Buzz will do its best to keep our readers as up-to-date as possible as to local, state and federal actions relating to the virus.

As we have stated in previous editions, for those businesses seeking guidance or assistance on how to proceed during this unprecedented time, please contact the McNees Labor and Employment Practice Group , or for government relations and nonprofit consulting assistance please contact the McNees Strategic Solutions Group (MSSG) .

You can also visit the McNees COVID-19 Article & Resource Page for more information on various legal and political issues created by the novel coronavirus.

For more information on what you can do to protect yourself and others, check out the CDC's coronavirus information page or visit www.health.pa.gov .