HARRISBURG - Pennsylvania padded its tax revenue surplus to nearly $540 million last month, a development that will intensify debate over how far to go to restore planned state spending cuts for many programs.

The release of the May revenue report Wednesday shows tax collections since the start of the fiscal year in July are 2.3 percent above projections as the economy improves. Tax collections for May alone are $34 million above estimate and build on a big revenue haul considerably above expectations in April.

Of the three mainstay state taxes, corporate and sales tax collections were up in May while collections of the personal income tax were slightly below mark, according to the Revenue Department. Collections of "sin" taxes - liquor, cigarette, table games - were below estimate last month as they have been for this year.

The emergence of a surplus after several years of recession-spawned red ink is the key issue confronting lawmakers as they approach the finale of the state budget debate, especially since Gov. Tom Corbett proposed deep cuts in state aid to school districts and higher education in March.

A Senate Republican leader said Wednesday that part of the surplus should be used to support programs that his caucus has identified as priorities, such as aid to schools, higher education and hospitals. The next move on the budget is in the Senate's court.

"The solid revenue collections seen in May, which followed strong collections in April, support our position that a portion of the now $540 million revenue surplus can be used in a fiscally responsible way to provide additional support for critical programs," said Majority Leader Dominic Pileggi, R-9, Chester.

The GOP-controlled House approved a $27.3 billion budget last week that would restore a share of the governor's cuts in education aid and cut public welfare spending yet keep the entire surplus in reserve. All House Democratic lawmakers voted against the bill, saying either all or part of the surplus should be used to restore cutbacks in aid.

"The Republican refusal to use this extra revenue makes no sense when we are contemplating deep cuts to schools that teach our children, hospitals and nursing homes that provide life-saving care and community colleges that train our workers," said House Minority Leader Frank Dermody, D-33, Pittsburgh.

Overspending led to Pennsylvania's fiscal problems, said Stephen Miskin, spokesman for House Majority Leader Mike Turzai, R-28, Pittsburgh. No one can guarantee the surplus will continue through the next fiscal year. The signs are that June will bring more good news for the revenue flow, said Rep. Joseph Markosek, D-25, Monroeville, ranking Democrat on the House Appropriations Committee.

While the main requirement is to produce a balanced budget, Pennsylvania's fiscal problems are aggravated by the end of federal stimulus money that propped up the budget the past two years, increasing costs for public pensions and corrections and a $3.7 billion debt to Washington for aid to cover unemployment compensation benefits.

GOP lawmakers are preparing for a final budget vote as early as June 17 to meet a pledge for an on-time budget.

Contact the writer: rswift@timesshamrock.com