Report: January Tax Revenues Fall Short of Gov. Brown’s Estimates
January tax revenues in California were $528.4 million less than estimates from Gov. Jerry Brown (D), according to a report by State Controller John Chiang (D), the Sacramento Bee reports.
Chiang said, "January revenues were disappointing on almost every front" (Yamamura, Sacramento Bee, 2/11).
Background
The tax estimates were part of Brown's fiscal year 2012-2013Â budget plan released in January (California Healthline, 1/6).
Earlier this month, Chiang said state officials would need to find an additional $3.3 billion to pay for priority programs from Feb. 29 to April 13.
Brown administration officials said the shortage resulted in part from courts blocking cuts to health and welfare programs. The administration also cited miscalculations of savings from the prison inmate realignment initiative.
In response to Chiang's warning, state officials approved $865 million in internal borrowing to provide the state with enough money to operate until the bulk of its tax revenue arrives in the spring (California Healthline, 2/6).
Report Details
According to the new report, the lower revenue levels primarily are the result of lower-than-estimated tax payments and the distribution of more income tax refunds than expected.
However, the report noted that the state is no longer in danger of running out of funds next month because of the internal borrowing legislation adopted by lawmakers.
Reaction to the Report
The state Department of Finance released a memo in response to Chiang's report, saying that state revenue data are "concerning" but that one quarterly payment does not provide enough data "to draw conclusions or arrive at informed judgments of what is to come" (Sacramento Bee, 2/11).
The finance department also said taxpayers could make up the difference in April with final payments (Marois, Bloomberg BusinessWeek, 2/13).
Broadcast
On Friday, KPCC's "KPCC News" reported on Chiang's state revenue report for January (Small, "KPCC News," KPCC, 2/10).
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