NEW YORK (Reuters) - Pennsylvania raked in an extra 3.1 percent of general fund revenue in September, buoyed by a rise in taxes paid by corporations, though Moody's Investors Service kept its negative outlook for Pennsylvania.
The Commonwealth's general fund -- which counts most state dollars except some fees, taxes and federal aid -- took in $2.3 billion in September. That was almost $70 million more than expected, the state department of revenue said in a statement on Friday.
Corporation tax revenue was one of the top performers, surpassing estimates by $53 million to hit $489 million.
Since July 1, when Pennsylvania started its fiscal year, its general fund has collected $5.8 billion or 1.3 percent more than expected, the department said.
But also on Friday, Moody's Investors Service made no change in its assessment, keeping both Pennsylvania's credit at Aa1 and its negative outlook. The commonwealth will find it hard to rebuild its reserves and has a negative fund balance under Generally Accepted Accounting Principles, it said.
"With no budget reserves remaining, the impact of a double-dip recession could be particularly heavy on Pennsylvania's finances," Moody's warned in a statement.
A successor to Democratic Governor Ed Rendell, now finishing his second and final term, will also have to deal with a long trend of below-average growth and the continuing loss of manufacturing jobs, Moody's said.
Moody's predicted that Pennsylvania will not soon enact the new tax on natural gas proposed by Rendell and thus could have to find another way to raise $70 million to help close a $282 million shortfall in the current budget.
Most of that deficit was caused by a shortfall in federal dollars for schools and Medicaid, Moody's said. Pennsylvania has already sliced agency budgets by 1.9 percent and clipped $50 million of school aid, the credit agency said.
Moody's said the current deficit is "manageable," given that the state general fund totals $28 billion.
But the state auditor general on September 29 warned that the next governor -- either Republican Attorney General Tom Corbett or Democratic Allegheny County Executive Dan Onorato -- might have to close a $5 billion budget gap in the next fiscal year.
(Reporting by Joan Gralla, Editing by Kenneth Barry)