PA Fiscal Office: Consumer Spending Tied To Sagging Revenue
HARRISBURG, PA (CBS) -- The state agency that draws up revenue projections for Pennsylvania's government says one big reason those estimates are off is that you're not spending your money.
Pennsylvania's Independent Fiscal Office, or IFO, says based on its latest revision, state revenues for the current fiscal year are almost $700 million below what it projected at the beginning of the fiscal year last summer.
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The reason is a bit of a mystery for IFO director Matthew Knittel.
He says the problem is that folks aren't spending, even though Pennsylvania's job market remains strong. The good news is that Knittel expects the trend to change.
"I do expect a reversion because it's very unusual and we haven't seen it over the last decade where we had this disconnect between the income that's received and the spending that's occurring by consumers," said Knittel. "So, we do think it's temporary and it will revert back to normal patterns."
Knittel says the IFO is predicting that the state's general fund revenues will grow by two percent in the new fiscal year.