Budget Hole Deepens, Increasing Importance of April Collections
Making April tax receipts even more important, revenues collected by the state in March were $236 million below the nearly $6 billion estimated in the budget, the state Department of Finance said April 13.
Since the beginning of the current fiscal year on July 1, revenues are almost $900 million below projections.
The budget presented by Gov. Jerry Brown in January predicted a $9.2 billion gap between revenues and spending commitments.
That has now grown to $10 billion because of the lower-than-anticipated tax revenue.
The Legislative Analyst counters that the gap between revenues and spending commitments is another $6 billion bigger primarily because of overly confidence expectations by Brown regarding the amount of capital gains Californians will cash out this year.
Income tax collections in March were $194 million short of the $2.5 billion projected in the budget, the department’s Finance Bulletin says.
April is by far the largest month of the year for income tax receipts. The Democratic governor’s budget predicts $9.4 billion in both payments to the Franchise Tax Board and withholding from employee paychecks, which is sent by employers to the Employment Development Department.
The bulk of the payments won’t appear until after April 17, this year’s tax deadline.
Brown’s budget expects the tax board to receive $8.4 billion in income tax receipts this month. Through the 13th, the tally stands at over $1.1 billion.
Brown’s budget writers also expect there to be requests for refunds of almost $2.1 billion. So far, there are requests for just over $1.1 billion. Taxpayers getting money back tend to file earlier.
Also coming up short in March were bank and corporation taxes. The budget anticipated almost $1.4 billion in payments for the month but received $143 million less.
April is the third largest month for bank and corporation tax collections. The budget estimates just over $1.5 billion will be paid.
Through April 13, almost $400 million has been received but, again, the bulk of payments won’t occur until after April 17.
Sales taxes in March were $48 million more than predicted and insurance taxes were $89 million above estimates.
Filed under: Budget and Economy
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