Final January Revenue Figures Exceed Expectations

Controller's report shows big gains

by Brian Leubitz

A while back, I mentioned the (mostly) good news on the revenue front. Today, the controller's office released the full numbers, and again they are (mostly) good.

Personal income taxes in the month of January came in $4.8 billion above (54.7 percent) monthly estimates contained in the Governor's latest budget proposal. Corporate taxes came in $11.4 million above (45.5 percent) those monthly estimates, and sales tax receipts came in $582.7 million below (27%) projections.

The State ended the last fiscal year with a cash deficit of $9.6 billion. As of January 31, that cash deficit totaled $15.7 billion and was covered with $5.7 billion of internal borrowing (temporary loans from special funds), and $10 billion of external borrowing.

Of course, the big caveat here is that the sales tax numbers were below projections pretty substantially. Also, because of the fiscal cliff, many companies changed pay schedules, resulting in some of these bigger numbers. Of the numbers, Controller Chiang had this to say:

"Last month's revenues were by far the highest that California has seen in any January for the past decade. Along with increased auto sales, rising home values, and more construction, it signals that California may be entering an era where we can govern outside of crisis. However, given our state's troubled history with boom-or-bust revenue cycles, this good news must be tempered with increased fiscal discipline in how we interpret and budget January's collections."

This seems to be the path that the Legislature and the Governor are content to pursue. A steady budget with no big increases planned.

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