The official figures are now in for the state’s January general fund cash receipts, and to the surprise of Department of Finance revenue estimators, general fund revenue for the month was $4.3 billion (39 percent) above estimates in the governor’s January budget.
The forecast for personal and corporate income taxes was particularly off the mark. According to data released February 8 by Controller John Chiang, personal income taxes in the month of January came in $4.8 billion (54.7 percent) above estimates, corporate taxes were $11.4 million (45.5 percent) above estimates, and sales tax receipts were $582.7 million (27 percent) below projections.
Controller Chiang said: “Last month’s revenues were by far the highest that California has seen in any January for the past decade. Along with increased auto sales, rising home values, and more construction, it signals that California may be entering an era where we can govern outside of crisis. However, given our state's troubled history with boom-or-bust revenue cycles, this good news must be tempered with increased fiscal discipline in how we interpret and budget January's collections.”
The state ended the last fiscal year with a cash deficit of $9.6 billion. As of January 31, that cash deficit totaled $15.7 billion and was covered with $5.7 billion of internal borrowing (temporary loans from special funds), and $10 billion of external borrowing.
It is unknown whether the Department of Finance is taking steps to improve the accuracy of its revenue forecasts. Observers said it is unlikely that anyone in the department will be held accountable for the 39 percent discrepancy between the revenue forecast and the actual revenue collected just weeks after the forecast was released.
February 15, 2013
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