HARRISBURG - As lawmakers return to the Capitol to begin work on finalizing the state's budget and addressing a wave of proposed cuts by Gov. Tom Corbett, they will do so with improving tax revenue.

State tax revenue collections for the key month of April are coming in about $40 million to $50 million above estimate so far, Revenue Secretary Dan Meuser told a Pittsburgh area business group Monday. That means the state's estimated revenue shortfall for fiscal 2011-12 has shrunk to the $350 million range from estimates earlier this year of a $700 million shortfall, said Meuser. Growth in corporate tax revenue is one reason for this trend.

"We are moving in a positive direction," said Meuser, a Shavertown resident.

The secretary gave a preview of the Revenue Department's official revenue report for April that will be released today. He said officials are still counting tax payments that arrived by mail following the April 15 reporting deadline.

Revenue collections during the next two months will also help shape the $27 billion 2012-13 state budget that will be approved in late June.

Meuser said the improving fiscal picture doesn't negate the budget challenges posed by mandated increases in costs for public welfare, public pension and debt payments. The governor's proposed budget also calls for public education and social services cuts.

"We have only so much to spend," he added. "The governor is not going to raise taxes."

While the Republican-controlled House plans to vote this week on a business tax overhaul bill, Meuser said continuing challenges with state finances make it difficult to take up that issue at this time.

Corbett wants to unveil a comprehensive business tax proposal next year that addresses closing the Delaware loophole that allows businesses headquartered in other states to avoid paying some taxes on their operations here, reducing the Corporate Net Income Tax rate, lifting a cap on what companies can write off on previous year operating losses and basing a company's CNI tax liability on sales only rather than sales, property and payroll, the secretary said.

Meuser's talk came as the finale to the state budget debate shapes up in Harrisburg. The newly created Independent Fiscal Offices releases its first-ever state revenue forecast for fiscal 2012-13 today. The office was created in 2010 to provide revenue projections for all parties in the state budget process.

In another sign that budget season has arrived, a coalition of environmental, labor, civil rights and religious groups plan a Capitol rally today calling for the governor to act on clean energy, education and transportation programs.

Contact the writer: rswift@timesshamrock.com