June Tax Collections Closer to Estimates But Still Fall Short
With nine days left in the month, state budget writers are waiting to see if June revenue projections hit their mark.
In his revised budget in May, Gov. Arnold Schwarzenegger estimated more than $5.5 billion in income tax receipts and $2.1 billion in bank and corporation tax payments for June.
If June payments come in above estimates, the state’s $17.9 billion budget hole shrinks. Below estimates, it deepens.
Through June 21, the Franchise Tax Board reports $2.8 billion in income tax payments and $1.9 billion in bank and corporations tax receipts.
The employment Development Department to which businesses send withholding – the taxes subtracted from employee paychecks – has received $2.3 billion — $505 million below projections by Schwarzenegger’s Department of Finance.
Payments of both income taxes and bank and corporations taxes spiked around June 15, the quarterly payment deadline. Between June 14 and June 18, the tax board collected $2.3 billion of the month’s income tax payments to date. On June 16, $1.2 billion of the month’s total bank and corporations tax receipts were logged. ,
Because of changes made in last year’s budget, June, rather than April, has become the most significant revenue collection month of the current fiscal year, which ends June 30.
To pull more future income into the current and previous fiscal year, the 2009 budget front-loaded estimated tax payments so that 40 percent, rather than 25 percent, come due in June.
Also good news for the state’s cash-starved general fund is that requests for refunds are a relatively low $157 million.
Filed under: Budget and Economy
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