It’s Still Better Than a Poke In the Eye With a Pointed Stick
In a modestly bright bit of economic and budget news, the state took in roughly $150 million more in income tax in December than estimated.
The administration of Gov. Jerry Brown cautions not to read too much into the monthly figure because of two years of changes in when and how much businesses withhold from employee taxes and the estimated payments individuals make.
For example, to help close the state’s 2008 budget gap, the payment schedule for estimated taxes was changed from 25 percent each quarter to push more revenue into the current fiscal year, which ends June 30.
In August 2009, Gov. Arnold Schwarzenegger signed legislation to change the payment schedule again so that in the first quarter a taxpayer pays 30 percent, 30 percent in the second quarter, makes no third quarter payment and sends in the remaining 40 percent in December.
With the Brown administration’s caveat, the estimate made in May by the then Schwarzenegger administration for December income tax collections was $5.77 billion.
The Franchise Tax Board reported $1.68 billion in estimated payments for the month. The Employment Development Department, which receives withholding payments from employers, collected $4.24 billion.
The Department of Finance December bulletin, which uses revenue figures from November, shows income tax receipts $673 million above estimates for the year, sales taxes $269 over estimates and bank and corporations collections $329 million above estimates.
While the Legislative Analyst estimates a budget gap of $25.4 billion if the Legislature and the Democratic governor do nothing to close it over the next 18 months and Brown says the hole could be as high as $28 billion, every little bit helps.
Filed under: Budget and Economy
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