An Express Article from the California Land Title Association
On June 10th State Controller John Chiang released his monthly report detailing California’s cash balance, receipts and disbursements in May and through the first 11 months of the fiscal year.
Actual General Fund revenue in May was only $1 million below the latest projections found in the Governor’s May Revision proposal. While personal income taxes came in $283 million higher (12.1 percent) than expected, they were offset by declines in other sources of revenue. Sales tax receipts were down $124 million (-3.5 percent), and corporate taxes were down $90 million (-36.1 percent).
The State spent $720 million more than it received in the month of May. For the fiscal year to date, the State has spent $10.2 billion more than it collected in revenue. The State started the fiscal year with a $2.5 billion cash balance, leaving a net cash deficit of $7.7 billion on May 31. The State issued a $7 billion Revenue Anticipation Note last fall that, along with internal borrowing, is covering this short-term deficit.
What all this means is that the budget negotiations this year may be long and contentious. As one long time political commentator in Sacramento has noted, no one has the slightest notion of how or when the mess will be cleaned up.