Although the governor only just announced his budget for 2012-13, its numbers are already falling below expectations. Controller John Chiang, who released December’s cash update, notes that revenues came in $165.2 million below the latest projections contained in the Governor’s proposed budget. In comparison to the 2011 Budget Act, December revenues were $1.4 billion below estimates. Chiang commented:
“While we saw positive numbers in November, December’s totals failed to meet even the latest revenue projections. Coupled with higher spending tied to unrealized cost savings, these latest revenue figures create growing concern that legislative action may be needed in the near future to ensure that the State can meet its payment obligations.”
There was one bright spot: December’s sales tax totals came in above estimates by $17 million (1.1 percent). Still, personal income taxes were $69.8 million down (-1.4 percent), and corporate taxes also dropped by $19.5 million (-1.4 percent). Hope is on the horizon though, as the Controller notes, “The balance of holiday sales tax receipts will be seen in late January and early February.” As for local governments, and specifically counties, it’s a good sign that sales tax revenues are up, which translates to higher revenues for realignment and since vehicle license registrations have also increased, funds for realignment will also receive another boost.
See December’s financial statement here.
Summary analysis is available here.