June Income and Business Taxes $1.5 BillIon Above Estimates

Further buttressing the state’s financial condition, California’s June income tax and business tax receipts are nearly $1.5 billion higher than projected.

Total income tax payments through June 30, the close of the previous fiscal year,  were $8.4 billion.

In the budget signed by Gov. Jerry Brown June 27, $7.5 billion was predicted.

The additional revenue cushion a budget that the Legislative Analyst already intimates is “padded” with overly pessimistic revenue estimates – a conclusion June revenue totals support.taxes

One month does not a fiscal year make, the Brown administration counters, noting that any number of fiscal uncertainties, domestic and international, could damage the state’s economy between now and June 30, 2014, when the current one-day-old fiscal year ends.

The budget signed by the Democratic governor said bank and corporations tax collections in June would be $1.7 billion. The Franchise Tax board reports $2.2 billion.

Because of state and federal quarterly estimated tax payments due on the 15th, June has traditionally been the second largest revenue collection month for the state. April being Number One.   

In recent years, June has see-sawed with April as the biggest revenue month after quarterly payments were changed from 25 percent of estimated taxes very three months to 30 percent in April, 30 percent in December and 40 percent in June.

June didn’t come close to April this year.

April collections passed the $15 billion mark, buoyed by $4.5 billion in unexpected cash in January stemming partly from voter approval in November of Proposition 30 and its tax increases on higher income Californians.

The budget lawmakers were going to send to Brown contained revenue estimates rosier than his. But as part of a final compromise, Democratic lawmakers accepted Brown’s more conservative estimates.

Sales taxes were expected to total $2 billion. As of July 1, a final tally is not available.


Filed under: Budget and Economy

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