State’s Fiscal Picture a Bit Brighter in August, Says Controller
California’s August revenues were nearly $135 million above the projections in the recently enacted budget, State Controller John Chiang announced September 9.
Income taxes were above projections by $127.4 million. Sales taxes were up $8.6 million and corporate taxes were up $46.7 million, Chaing said in his monthly cash statement.
Revenues collected in July, however, were nearly $539 million less than anticipated in the budget.
Falling more than $1 billion below the revenue estimates used in calculating the budget signed into law June 30 leads to a series of automatic spending reductions in the next budget. The bigger the discrepancy, the deeper the cuts. ?
“While August revenues did not fully offset last month’s shortfall, we’re fortunate that the recent market upheaval, sluggish job growth and continued weakness in key segments of our economy did not lead to a third straight month of slipping revenues,” Chiang said in a statement.
“We now look to September and its $7.6 billion of projected revenue – the largest cash month between now and December 15 when a decision must be made on whether to pull the trigger to cut more program funding.”??
After accounting for August revenues, total general fund revenues are now behind the budget’s estimates by $403.8 million. ??
While sales taxes initially looked stronger in August, Chiang said it was discovered that the Board of Equalization mistakenly allocated $343 million to the state that should have gone to local government.
A major component of the budget for the fiscal that began July 1 is a shift of state responsibilities and revenues to local governments in the areas of criminal justice, mental health and social services.
The $343 million of sales tax should have been sent to locals as part of the new realignment program.
Chiang said the error will be corrected this month. ?
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