Report: January Tax Revenues Fall Short of Gov. Brown’s Estimates
Chiang said, "January revenues were disappointing on almost every front" (Yamamura, Sacramento Bee, 2/11).
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).
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 thatÂ 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).
On Friday, KPCC's "KPCC News" reported on Chiang's state revenue report for January (Small, "KPCC News," KPCC, 2/10).This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.