Grim News: Revenue Is Likely $2.5 Billion Below Estimates

After subtracting refunds, income tax collections for April 28 were a net $389 million.

The Employment Development Department reported receiving $84 million in quarterly withholding payments.

The budget proposed by Gov. Arnold Schwarzenegger in January predicted income tax collections of $10.5 billion for April.

With two days left in the month, income tax collections total $7.1 billion — almost $3.4 billion off the target.

Bank and corporations taxes are also below estimates. The Franchise Tax Board reports collecting $1.3 billion month-to-date — $600 million below the expected revenue of $1.9 billion.

Every dollar below the revenue target worsens the state’s budget shortfall which is already $18.8 billion.

Absent two days of income tax collections of more than $1.5 billion each — extremely unlikely although $1.4 billion was logged on April 29, 2008 — the state will probably end the month with at least a $2.5 billion deeper hole to fill.

-30-