California Misses Sept. General Fund Revenue Target by $302 Million

California missed its general fund revenue goal for September by $301.6 million, according to state Controller John Chiang (D), Reuters reports.

Total revenue for the current fiscal year has fallen short of budget projections by $705.5 million, raising concerns that additional cuts to education, health and human services programs could be triggered in 2012 (Christie, Reuters, 10/10).

Background

Gov. Jerry Brown (D) signed an $86 billion state budget plan in June (Marois, Bloomberg, 10/10).

Lawmakers relied on an assumption that the state would receive $4 billion in new revenue over what previously was expected through June 2012.

If officials determine that revenue has fallen $1 billion short of expectations for this fiscal year, additional cuts could take place automatically. Most cuts would become effective Jan. 1, 2012.

Additional cuts could include:

• $100 million from services for individuals with developmental disabilities; and
• $100 million from the In-Home Supportive Services program for the elderly and people who are blind or have disabilities (California Healthline, 8/17).

According to other data from Chiang's office, July's general fund revenue was $538.8 million less than forecast, while August revenue was $135 million more than expected (Bloomberg, 10/10).

Likelihood of Automatic Cuts

Chiang said, "September's revenues alone do not guarantee that triggers will be pulled. But as the largest revenue month before December, these numbers do not paint a hopeful picture" (Reuters, 10/10).

Officials at the state Department of Finance and Legislative Analyst's Office said a significant portion of the projected $4 billion in revenue could come next spring (Yamamura, Sacramento Bee, 10/11).

Finance officials also noted that the controller's figures might not show all the money California has on hand.

H.D. Palmer, spokesperson for the Department of Finance, said a decision about the trigger cuts will be based on a 2012 revenue forecast that is made in December (Buchanan, San Francisco Chronicle, 10/11).