Through the first four months of the fiscal year, state revenue is $15.98 billion ahead of the amount projected in the budget enacted this summer, the California Department of Finance announced in its latest finance bulletin.
That amount includes $4.78 billion in unexpected revenue from the 2020-21 fiscal year (which had not yet concluded when the new budget was approved) and $11.19 billion above 2021-22 budget’s projections for the first four months of the fiscal year.
For the first four months of the fiscal year, personal income tax revenue was $7.98 billion above the forecast of $29.21 billion, sales and use tax revenue was $1.06 billion above the forecast of $8.06 billion, corporation tax revenue was $1.55 billion above the forecast of $3.25 billion, and insurance tax revenue was $35 million above the forecast of $838 million.
Additionally, revenue from alcoholic beverage taxes, tobacco taxes, and pooled money interest was $41 million above the forecast for the first four months of the fiscal year, and $6 million above the forecast of $46 million for October. The category of “other cash receipts” was $520 million above the forecast for the first four months of the fiscal year, and a whopping $475 million above the forecast of $239 million for the month.
The bulletin also noted:
- S. inflation rose 6.2 percent year-over-year in October 2021, “its fastest pace since 1990, and following an average of 5.3 percent in the previous five months.” The faster inflation in October “was driven by food and energy, and inflation of nearly all major components accelerated on a year-over-year basis,” the report stated. Year-to-date, U.S. inflation averaged 4.2 percent, up from 1.2 percent in the same period last year.
- The U.S. unemployment rate fell 0.2 percentage points to 4.6 percent in October, with civilian employment increasing by 359,000, while California unemployment rate fell 0.2 percentage points to 7.3 percent. California’s civilian employment increased by just 32,700, the report stated.
- California permitted approximately 111,500 housing units (49,200 multi-family units and 62,300 single-family units) on a seasonally adjusted annualized rate basis in September 2021. This was down 9 percent from August and down 6.9 percent from September 2020. In the first nine months of 2021, California permits averaged 120,000 units, up from 102,000 units in the same period in 2020 and 110,000 units in the same period in 2019.
- The statewide median price of existing single-family homes decreased to $798,440 in October, the first month below $800,000 since March. This was down 1.3 percent from September and up 12.3 percent from October 2020. Sales of existing single-family homes in California totaled 434,170 units (seasonally adjusted) in October, down 0.9 percent from September and down 10.4 percent from October 2020.
Governor Gavin Newsom and the Department of Finance are in the process of putting together the governor’s official budget proposal for the 2022-23 fiscal year. The budget must be presented to the Legislature on or before January 10.