Legislative Analyst Says April Revenues $2 Billion Short, Budget Hole Climbs to $12 Billion
April tax collections will fall at least $2 billion short of estimates, worsening the state’s already $10 billion budget hole by a like amount, legislative budget writers said April 25.
The Legislative Analyst says that by April 30 tax revenues for the fiscal year that began July 1 will be $3 billion short of projections.
“Results for April alone are on track to be over $2 billion below the (Brown) administration’s most recent budget forecast for the month,” the analyst wrote in a budget update posed April 25.
“Surprise late April collections remain a small possibility but, if the current trends hold, they suggest that the state’s revenues could be a few billion dollars below the administration’s January forecast.”
Said Senate President Pro Tempore Darrell Steinberg, a Sacramento Democrat:
““The revenue numbers are concerning. We know that we’re going to have to make some more tough decisions. We’ll do what we have to do.”
Daily receipts reported by the Franchise Tax Board have been falling over the past two days and the month-to-date total remains well below the level anticipated in the budget proposed by Gov. Jerry Brown four months ago.
Brown’s budget is premised on the tax agency receiving a net of $6.4 billion for the month.
So far, it has collected $4 billion, the analyst says.
The “net” total is payments less refund requests, which are running $300 million over the Democratic governor’s estimate of $2.1 billion for the month.
If receipts follow last year’s pattern, as the analyst says they are, the state can expect to receive another $300 million before the end of the month, leaving revenues roughly $2 billion below Brown’s estimates.
April tax collections also include withholding – the money employers deduct from employee paychecks. Those payments are sent to the Employment Development Department.
The analyst says the “most likely outcome” is that the state falls $250 million below the target of $3.2 billion in withholding.
April is also the third largest month for bank and corporation tax collections. The budget estimates just over $1.5 billion will be paid. Through April 25, $1.3 billion has been received.
The analyst says collections will fall $150 million short.
Year-to-date bank and corporation tax receipts are $304 million below estimates, April’s shortfall boosts that to $450 million.
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