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.”
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.