30 Ways in 30 Days: Revenue Collections

Proposed Cuts to Revenue Department Penny Wise and Pound Foolish

A $36 million cut from what the governor proposed for 2009-10 could lead to staff layoffs, costing the state millions in uncollected tax revenue.
 
HARRISBURG (June 15, 2009) - A $36 million cut from what the governor proposed to fund the state Department of Revenue in 2009-10 may not seem like a concern for many Pennsylvanians, but that cut could actually end up costing the state many millions more in uncollected tax revenue.
 
Department of Revenue staff estimates that a $13 million cut in Senate Bill 850 to the department's general government funding will require 210 layoffs, while a $1.2 million cut elsewhere could cost another 22 jobs. Those job cuts could cost the state money, since the employees filling those revenue-generating positions play an active role in collecting delinquent tax revenue.

"With the governor's budget, we can eliminate positions that are non-revenue generating," said Department of Revenue spokeswoman Stephanie Weyant. "But if we go as far as Senate Bill 850, we are looking at eliminating positions that generate revenue."

Each revenue-generating position has the potential to bring in up to $1 million in tax collections, Weyant said, so the job cuts could translate into more than $200 million of lost tax revenue. That could force budget cuts elsewhere.
 
In addition, the Senate plan cuts the governor's proposed $21 million investment in technology upgrades, which would give the department needed new tools to help collect legally owed taxes. Taxpayers would also benefit, as tax filings could be made easier and more efficient with the new technology.
 
"Cutting tax collection staff and needed technology upgrades, particularly when revenues are tight, is a shortsighted idea," said Michael Wood, Research Director for the Pennsylvania Budget and Policy Center. "The state should be doing everything it can to collect tax payments so that everyone is paying their fair share."
 
To learn more about the issue, contact Stephanie Weyant, Press Secretary for the Pennsylvania Department of Revenue, at 717-787-6960.  You can contact Michael Wood of the Pennsylvania Budget and Policy Center at mwood@pennbpc.org.

Return to 30 Ways in 30 Days Service Cuts Will Hurt Pennsylvanians.