Categories
Economy

Cash collection disappoints, but deficit borrowing will be lowest in four years

California’s cash balance was 6% lower than estimates, largely with a drop in personal income taxes.

The state collected $4.8 billion in July, compared to projections of $5.1 billion, according to the State Controller’s Office.

“Reflective of the state’s improving fiscal health, California’s upcoming cash flow for borrowing is shaping up to be the smallest in four years,” says State Controller John Chiang. “While this month’s numbers disappoint, reaction must be tempered by the fast that July is often the state’s least significant revenue collection month.”

California State Controller John Chiang.
California State Controller John Chiang.

Personal income taxes were $273 million – or 7% — lower than projections in the state budget. Corporate taxes and sales-tax revenue were up 4.9% and 0.9% from projections.

The state ended the month with a cash deficit of $10.9 billion, covered with internal borrowing from other funds.

California will only need about $5.5 billion in short-term borrowing this fiscal year, the lowest in four years – and about half the amount in 2012-13, Chiang says.

Categories
Economy

Golden State ends fiscal year $2 billion in the black

A better economy coupled and voter-approved tax initiatives greatly increased the state’s revenue last month – and during the just-completed fiscal year.

California collected $13.1 million in June, a head-turning $1.2 billion more than the governor’s projections, according to the State Controllers Office on July 10. And fiscal-year revenue finished at $100.1 billion – a nifty $2 billion more than projected.

It’s an about-face and dramatic turnaround after several years of shortfalls.

“Rising employment, economic expansion and voter-approved tax increases have generated revenues outperforming even the rosiest projections,” says State Controller John Chiang. “However, California’s history of revenue cycles should be a cautionary tale that informs our spending decisions and incentivizes policymakers to prudently pay down accumulated debt.”

California State Controller John Chiang.
California State Controller John Chiang.

Across the board, larger-than-expected gains generated the $1.2 billion increase. Corporate taxes were $373.5 million – or 21.5% — more than projections. Personal income tax and sales-tax revenue beat estimates by $644.6 million and $70.1 million respectively.

California’s better job growth helped boost personal income tax – and encouraged more spending by consumers.

California entered the 2011-12 fiscal year with a cash deficit of $9.6 billion, which has been narrowed to $2.4 billion at the end of June. Internal borrowing from specials fund is covering the shortfall.