Recovery? Sales/Income/Corporate Tax Revenues DOWN

Guv Brown is really confused.  He is crowing about the California “recovery”.  So, in July, retail and use taxes were down.  Personal income tax revenues were down.  Corporation tax revenues were down.  The income of Californians is down, the profits of corporations are down and the people are buying less—which will cause cuts in local budgets—while pension costs continue to go up.

“Personal income tax receipts of $4.39 billion were $323.3 million lower than anticipated in the Budget Act, missing estimates by 6.9 percent.  Corporation tax receipts of $227.3 million were $49.5 million below estimates, or 17.9 percent.

“The declines in all three revenue categories may be attributable to the slower rate of job growth when compared to 2015,” said Controller Yee, the state’s chief fiscal officer.  “However, we should exercise caution by further examining and understanding the possible causes of the revenue shortfalls, as a one-month snapshot is not indicative of an economic trend.”

Brown increased spending with a message, “we put an extra $2 billion in reserves for the oncoming recession.”  Looks like the California recession has begun.  Remember this when on the November ballot, the people of California will be faced with $500 billion in local and State tax increases and bonds.  That will throw us over the edge—the transferring of $500 billion from the private sector to government.

student-loan-debt

CA Controller’s July Cash Report Shows Revenues Well Short of Budget Projections

State Controller Betty Yee,  8/11/16

SACRAMENTO—July state revenues came in below projections in the 2016-17 Budget Act approved the previous month by $591.3 million, or 9.8 percent, with all three of the state’s main revenue sources falling short of expectations for the first month of the fiscal year, State Controller Betty T. Yee reported today.

Retail sales and use taxes missed the mark by the widest margin.  Estimated at $907.9 million, they came in at just $694.5 million—23.5 percent, or $213.5 million, lower.

Personal income tax receipts of $4.39 billion were $323.3 million lower than anticipated in the Budget Act, missing estimates by 6.9 percent.  Corporation tax receipts of $227.3 million were $49.5 million below estimates, or 17.9 percent.

“The declines in all three revenue categories may be attributable to the slower rate of job growth when compared to 2015,” said Controller Yee, the state’s chief fiscal officer.  “However, we should exercise caution by further examining and understanding the possible causes of the revenue shortfalls, as a one-month snapshot is not indicative of an economic trend.”

Total disbursements of $10.42 billion were $33.2 million lower than projected.  The state ended the month of July with unused borrowable resources of $30.37 billion, which was $1.38 billion more than expected in the 2016-17 Budget Act.  Outstanding loans of $5.63 billion were $545.5 million higher than projected. This loan balance consists of borrowing from the state’s internal special funds.

For more details, read the monthly cash report.  With fire season upon us, the Controller’s August California Fiscal Focus newsletter breaks down the costs of preventing and fighting wildfires in the Golden State.

As the chief fiscal officer of California, Controller Yee is responsible for accountability and disbursement of the state’s financial resources. The Controller also safeguards many types of property until claimed by the rightful owners, and has independent auditing authority over government agencies that spend state funds. She is a member of numerous financing authorities, and fiscal and financial oversight entities including the Franchise Tax Board. She also serves on the boards for the nation’s two largest public pension funds.

 

About Stephen Frank

Stephen Frank is the publisher and editor of California Political News and Views. He speaks all over California and appears as a guest on several radio shows each week. He has also served as a guest host on radio talk shows. He is a fulltime political consultant.

Comments

  1. Nothing Jerry Brown or Barack Obama say is true. Brown says, “The budget is balanced!” when the State Controller says we have a deficit. Barack Obama says unemployment is 5.6% when 105 million people from a workforce of 180 million are not working! My calculator says 58% are unemployed making Obama twice as bad as Hoover!

    Google “Two Minute Conservative” for more.

  2. The City of Santa Barbara has missed its tax income projections for close to half the entire year. They cannot afford to pay bid projects on streets because of the increased cost.

    The State of California is facing the same problems? Oh no!

    The State cancels $750 Million in road project distribution because it doesn’t have the money. At the same time the Democrats continue to increase rules and regulations pushing the cost through the roof. They back the broken choo-choo and more.

    Still voting Democrat?

  3. California is set to implode with well over $1 trillion in debts and unfunded liabilities. The US is set to print more money to meet its $130 trillion in debt and unfunded liabilities. If you live in California, each citizen’s share of total debt and liabilities is nearly $300,000! If you restrict that amount to taxpayers, it comes out to around $750,000 per taxpayer! When the average wage is just above $60,000, that means that every taxpayer could work 12 years, contribute their entire salary to offset the debt and we would still have debt to pay!

  4. Progressive competency:
    Hoover (a self-described “Progressive” Republican) turned a normal down-turn in the business cycle into a Depression;
    FDR managed to turn that Depression into the Great Depression (the Depression within the Depression in his 2nd-term);
    Obama has managed to replicate the skill of Hoover by stretching out a normal cycle downturn into a decade long “recovery” with no end in sight;
    and, Moonbeam continues to be Moonbeam.

  5. Stephen, although I completely agree with you that CA state taxation is a huge ongoing concern here. However, your statistic of $500 Billion new local/state taxes are a bit inflated and inaccurate. What you failed to mention is the fact of more than 65% of that $500 Billion consists of bonds…primarily financed by private investors with a stated ROI….to help shore up needed costs in the state’s and cities’ infrastructure needs. Whether you agree it with or not, the bonds are hugely necessary and much preferred option to more tax increases.

    Now, if we could ONLY mitigate all of the these nonsensical regulations that continue to cripple this state. It is crazy.

  6. Must be due to all the tax cuts we’ve seen in Ca, right?

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