State Controller John Chiang reported May 9 that the state collected $1.6 billion more in personal income taxes in April than expected. With those collections, general fund revenue is 10.6 percent above the projections in the governor's January budget proposal.
"While this is very welcome news, these numbers should not lure us into a false sense of security," Controller Chiang said in a preliminary report released May 6.
He added: "Sagging retail sales, a weakening real estate market, growing unemployment and rising energy prices all point to an economy facing significant challenges. Importantly, the additional tax revenues received last month reflect the 2007 economy. Next year's revenues will reflect this current year's economic climate. The state's cash position should provide enough of a cushion to get us through the remainder of the current fiscal year. However, to avoid a cash crisis this summer, California needs a timely budget based on sound revenue projections and containing real deficit-reducing solutions."
(Sources: News releases from State Controller John Chiang, May 6 and May 9.)
Cal-TaxReports May 12, 2008
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