Finance Officials: State Missed July Revenue Target by $541M

TOPIC ALERT:

Last month, revenue in California came in at 9.2% -- or $541 million -- below budget estimates, raising concern that additional budget cuts might be needed for fiscal year 2012, according to data from the state Department of Finance, Bloomberg reports.

The finance department's report is similar to figures state Controller John Chiang (D) released last week showing that July general fund revenue missed the budget forecast by $538.8 million (Nash, Bloomberg, 8/16).

Background

In an effort to bridge the state's budget deficit, lawmakers relied on an assumption that the state would receive $4 billion in new revenue over what previously was expected through June 2012.

If officials determine that revenue has fallen $1 billion short of expectations for this fiscal year, additional cuts could take place automatically. Most cuts would become effective Jan. 1, 2012.

Additional cuts could include:

  • $100 million from services for individuals with developmental disabilities; and
  • $100 million from the In-Home Supportive Services program for the elderly and people who are blind or have disabilities (California Healthline, 8/10).

State Response

State finance officials said it is too early to raise concern about the revenue figures.

They said the state would receive most of the higher revenues during the latter part of the fiscal year between December and June (Yamamura, "Capitol Alert," Sacramento Bee, 8/16).

Personal income tax and corporate tax payments that come in from December through June are key factors in meeting the revenue goal, according to finance officials (Bloomberg, 8/16).

Officials added that November and December revenue forecasts generated by the Legislative Analyst's Office and the Department of Finance would determine whether further trigger cuts are needed ("Capitol Alert," Sacramento Bee, 8/16).


to share your thoughts on this article.