State revenues underperform in November
News Review Staff Writer
California revenues performed 10 percent below projections during the month of November, according to the monthly report released by State Controller John Chiang’s office last week.
The impact of that revenue loss is not yet known, but economists say that the continuing pattern of unrealized revenue threatens to worsen the state’s economic crisis.
“The state ended the last fiscal year with a cash deficit of $9.6 billion. As of Nov. 30, that cash deficit totaled $24.9 billion.” Officials have borrowed some $14.9 billion from special funds within the state, and borrowed another $10 billion from outside the state government.
Conservatives in California have repeatedly expressed concerns about the state’s optimistic projections, which, though they keep legislators from making more significant spending cuts, have continued to broaden the structural deficit between revenues and expenditures.
With the Democrats holding a solid two-thirds majority in both houses of the state legislature, analysts have speculated that any revenue shortages will be made up in tax increases rather than spending cuts.
According to Chiang, total revenues for November were some $800 million below projections.
“November’s disappointing revenues stand in stark contrast to recent news that California is leading the nation in job growth, has significantly improved its cash liquidity to pay bills and even long-distressed home values are starting to inch upward,” said Chiang, a Democrat.
“This serves as a sobering reminder that, while the economy is expanding, it is doing so at a slow and uneven pace that will require the state to exercise care and discipline in how its fiscal affairs are managed in the coming year.”
According to the report, personal income tax came in 19 percent lower than projected, and corporate taxes came in a staggering 213 percent below projections.
“A portion of this drop was due to the higher-than-expected corporate tax refunds going out in the month of November,” states the report.
Sales tax revenues were up slightly, 3.8 percent, according to the report.
State Sen. Jean Fuller (R-Bakersfield) is working with industry leaders in her district to identify ways to boost state revenues. Watch for an overview of that plan in a future edition of the News Review.Story First Published: 2012-12-12