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.

Categories
Government Social

California has fourth-highest tax rate; Arizona, Nevada among lowest

California has the nation’s fourth-highest state and local tax burden as a percentage of personal incomes in 2010, and that was before voters favored Proposition 30 that increases sales and income taxes last fall, according to the latest national survey by the Tax Foundation.

Californians’ tax burden was 11.2% in 2010, the latest information available from the nonprofit group. The Golden State was only better than first-place New York at 12.8%, New Jersey (12.4%) and Connecticut (12.3%). And on a per-capita basis, California’s state-local tax burden was the sixth highest at $4,934.

Arizona and Nevada – bordering states that aggressively advertise and recruit companies from California – were among the lowest in the nation, at 8.4% and 8.2%, respectively. Arizona finished at No. 40, while Nevada ranked No. 42, or two of the states with the lowest rates.

And Californians agreed to boost the state’s sales tax rate by a half-cent and increase additional income taxes on the highest-income residents in the state. Prop. 30 is expected to raise about $6 billion per year, though the state would still remain lower than third-place Connecticut, according to the Tax Foundation.

California’s high tax burden is largely based on high sales, income, gas and corporate taxes, while property taxes are relatively low, thanks to Proposition 13.

Nevada has the nation’s lowest corporate and personal income tax rates, while Arizona finished at No. 24 and No. 17, respectively.

Alaska had the lowest overall state and local tax burden at 7.0%.

Check the complete report at http://taxfoundation.org/article/facts-figures-handbook-how-does-your-state-compare-0