Originally posted at www.counties.org/blog
For the state’s General Fund, four months are head and shoulders more important than the rest. From highest to lowest: April, June, January, and December.
Let’s hope April, June, and January bring in the cash, because December didn’t do so hot.
State Controller John Chiang announced that cash receipts in December were below all expectations. They came in $1.4 billion (-15.0%) below what the 2011-12 budget relies on, and were even $165.2 million (-2.0%) worse than the Governor’s 2012-13 budget proposal released last week guessed.
One bright spot for counties is that state sales tax revenue is up: $161 million (11.1%) above 2011-12 Budget Act estimates and $17 million (1.1%) above 2012-13 budget proposal estimates. The bulk of 2011 Realignment revenue comes from the sales and use tax, and when the state’s sales tax revenues are up, that means realignment sales tax revenues are up too. The vehicle license fee provides the rest of 2011 Realignment revenues, so news that auto registrations are up by about 13.8% is also welcome.
For the fiscal year, General Fund receipts are $2.5 billion (-6.2%) below what the 2011-12 budget relies on. Of course, the budget relied on $4 billion of magic uncategorized revenue, so some observers might not be entirely surprised.
The January numbers, which the Controller will release about this time next month, will capture most of the rest of the holiday sales and will be an important indicator of whether the state will fall even farther down the deficit hole.
The Governor has urged the Legislature to enact parts of his budget by March 1 to maximize savings, but some legislators have instead publicly considered waiting until after the May Revise, hoping for improved revenue estimates. That would be a welcome turnaround from today’s news.
About the Author:
Geoffrey Neill is a Senior Legislative Analyst at the California State Association of Counties and specializes in Revenue and Taxation. For more information, email Neill at GNeill(at)counties.org