State Budget

California’s Revenue Is Nearly $14 Billion Above Forecast

California’s general fund tax revenue is $13.9 billion above the forecast in the 2021-22 state budget, the Department of Finance (DOF) reported October 22. The report was foreshadowed by Governor Gavin Newsom, who cited the $14 billion figure October 20 when he announced that the state government will have another “historic budget surplus” in the next fiscal year. Newsom said that when he releases his 2022-23 budget proposal in January, “I’ll be announcing another historic budget surplus, record reserves, paying…

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Governor Projects ‘Historic Budget Surplus’ for Next Fiscal Year

The state government will have another “historic budget surplus” in the next fiscal year, Governor Gavin Newsom said October 20 during a presentation at the Milken Institute’s Global Conference. The governor said his administration today will announce “an additional $14 billion above our cash projections,” and in his January budget proposal, “I’ll be announcing another historic budget surplus, record reserves, paying down $11.3 billion in pension obligations ….” (CalTax: The Legislative Analyst’s Office this morning released a revenue update stating:…

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Income Tax Withholding Collections in September Up 22.5 Percent From 2020

California’s revenue outlook continues to be very positive, the Legislative Analyst’s Office (LAO) reported, as personal income tax withholding collections from September 1 to September 24 were 23.5 percent ($1.2 billion) above the same period in 2020. For the entire 2021-22 fiscal year up to September 24, withholding collections were 22.5 percent above the same period in 2020-21, the LAO added. California employers’ income tax withholding payments “can provide a real-time indication of the direction and magnitude of the aggregate…

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Revenue Windfall Continues, Could Reach $25 Billion

The state’s tax revenue windfall could reach $25 billion by the end of the current fiscal year, the Legislative Analyst’s Office stated in an update of its formal revenue outlook for 2021-22, originally published in May. “We currently project that there is a strong chance that collections from the state’s ‘big three’ taxes – personal income, sales, and corporation taxes – will exceed the budget act assumption of $170 billion in 2021-22,” the analyst wrote. “Our current best estimate is that the…

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Revenue Beats Projections by $1.5 Billion in First Month of New Fiscal Year

General fund tax revenue for July, the first month of the 2021-22 fiscal year, was $1.54 billion above the $8.38 billion forecast in the recently approved state budget, the Department of Finance announced August 23. The department added that general fund revenue for the entire 2020-21 fiscal year was $4.78 billion (2.4 percent) above the $201.78 billion forecast in the new budget, which was put together before the fiscal year ended. Personal income tax revenue for July was $1.22 billion…

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Democratic Legislative Leaders Unveil Joint Budget Proposal

Democratic legislative leaders announced June 1 that they have reached a budget agreement and will now negotiate with Governor Gavin Newsom over differences between their $267.1 billion plan and the $267.8 billion budget proposed by the governor. The legislative budget largely mirrors the governor’s plan and proposes $196.1 billion in general fund spending, compared to $196.8 billion in Newsom’s proposal. Both plans represent significant increases from the $165.2 billion in general fund spending in the budget approved last summer, and…

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California’s Tax Revenue Is $16.7 Billion Above Projections

State revenue for the first nine months of the current fiscal year is $16.7 billion ahead of the projections in Governor Gavin Newsom’s January budget proposal, the Department of Finance announced April 23. In March alone, the state collected $2.3 billion more than the $8.9 billion the governor had predicted for the month. The governor’s budget, which will be updated in mid-May, anticipated revenue of $120.5 billion in the first nine months of 2020-21. “A significant amount of receipts above…

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State Spending Limit Is ‘Major Issue,’ Analyst Reports, Indicating Any New Tax Hikes Might Have to Be Refunded

California’s voter-approved state spending limit – which requires the state to return money to taxpayers and dedicate more money to schools if revenue is above a prescribed limit over two consecutive years – will be a “major issue” in the budget process beginning this year, the Legislative Analyst’s Office (LAO) reported April 21. The report is an indication that any tax increases approved by the Legislature and governor would not go into the general fund, but would have to be…

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Early-Action Budget Provisions Signed Into Law

Governor Gavin Newsom signed several budget bills February 23 after the Legislature fast-tracked measures that Newsom said are needed immediately to help Californians affected by the pandemic. “This critical assistance – including child care, relief for small business owners, direct cash support to individuals and households, financial aid for community college students and more – will help keep our communities afloat as the state continues to confront the immense challenges of this moment,” Newsom said in a press release announcing…

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Governor and Democratic Leaders Announce Deal on Early Budget Action

Governor Gavin Newsom and Democratic legislative leaders announced February 17 that they have reached an agreement on portions of the state budget intended to help Californians who have been affected by the pandemic. The stimulus package includes $9.6 billion in budget changes – spending increases and relief measures – including $4.7 billion directed to small businesses, according to Senator Nancy Skinner, chair of the Senate Budget and Fiscal Review Committee. The deal – negotiated behind closed doors and not discussed…

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