Every Little Bit Helps — June Tax Collections Above Estimates
State tax collections for June helped move the state toward the $4 billion in additional unexpected revenue the new spending plan is premised on.
June income tax collections were $3.8 billion — $655 million more than the $3.2 billion Gov. Jerry Brown’s Department of Finance predicted the Franchise Tax Board would collect for the month.
The deal closer for the budget, signed June 30 by Brown, is a prediction the state will collect $4 billion more than estimated by the end of the the fiscal year, June 30, 2012.
If the state doesn’t reach that goal a series of $2.5 billion in spending cuts – most falling on public schools – will be triggered.
The revised prediction will be reassessed in the fall as the Demoratic governor prepares his spending blueprint for the next fiscal year.
Brown’s revised budget that he released in may expected a total of $6.2 billion in income tax payments for June.
Approximately $3 billion of that total is received by the Employment Development Department through withholding – the money employers deduct from employee paychecks to cover employee taxes.
Not all revenue news for June was good.
The Democratic governor estimated tax refund payments of $170 million for the month. Refund requests were $105 million higher – at $275 million.
Brown estimates bank and corporations tax collections of over $2.2 billion for June.
The tax board reported $2.4 billion in receipts for the month.
Unlike income tax refunds, the $66 million in bank and corporation requests for refunds iwas $11 million short of Brown’s monthly estimate of $77 million.
Because of budget-related changes in tax payment schedules, June has become one of the state’s most significant revenue collection months. April is still the biggest month.
Prior to September 2008, estimated payments were made in quarterly payments of 25 percent.
To bring more revenue into the state’s cash-starved coffers sooner, the payment schedules were changed.
Now individuals and employers pay 30 percent of their estimated taxes for the year during the first quarter, 40 percent by June 15, nothing in September and the remaining 30 percent in December.
Filed under: Budget and Economy
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