November revenues surge after October slump

November revenues surge after October slump

(Calif.) California received nearly $9.7 billion in revenue in November–drastically exceeding projections and making up for an unexpected dip in October collections, according to the state controller’s office.

Last month, state controller Betty Yee reported that October revenues came in just under $6.6 billion–nearly 6 percent, or $412 million, short of projections following months of surprisingly high collections.

November was something of a return to form then, with collections for the month coming in close to $1.3 billion, or 15 percent, higher than estimates made last summer as part of the state budget process.

Last month, personal income tax, sales tax, and corporation tax–considered the state’s big three revenue sources–all were higher than expected.

Personal income tax collections reached nearly $6 billion, 22 percent or nearly $1.1 billion above estimates.

Sales tax receipts came in at $3.5 billion, representing about 12.5 percent, or more than $388 million more than anticipated. Corporate taxes of nearly $27 million were close to 3 percent higher than estimated.

For the fiscal year overall, the state has collected nearly $45 billion–close to $2.3 billion more than projections. Thus far, total revenues collected between June and November of this year are close to 10 percent, or $4 billion, higher than at this same time last year.

Such gains are a turnaround from October, when both personal income and corporate tax revenues came in under the mark and overall collections stalled months’ of higher than expected collections.

In that instance, revenue from personal income taxes, came in 8.4 percent, or $472 million, lower than expected at $5.1 billion, while corporation taxes that month were 11 percent, or $31 million, below expectations at $255 million.

As both Gov. Jerry Brown and the non-partisan Legislative Analyst’s Office have warned, however, economic conditions have rarely remained at such elevated levels for such an extended period of time, and California should prepare in the case of a downturn.

When state lawmakers returned to the Capitol last week, however, it was to start the new Legislative session off by proposing tens of billions of dollars in new state spending. Some of which is aligned with the goals of incoming Gov. Gavin Newsom.

For instance, AB 39 by Assemblyman Al Muratsuchi, D-Rolling Hills Estates–would add $35 billion in education funding. Another–AB 123, by Assemblyman Kevin McCarty, D-Sacramento–seeks to expand the state’s preschool program, to the tune of about $1.3 billion over three years.

Newsom, who will be sworn in next month, has said he wants to make such those changes gradually over his four-year term, telling reporters from the Sacramento Bee last week that his office was “not going to deviate from being fiscally prudent.”

As an example, he noted that providing universal preschool could not be achieved in the immediate term, and that it would take years to build that infrastructure. more