Controller’s January Cash Report — California $4.3 billion More Flush Than Expected

Total revenues for January 2013 were $4.3 billion above estimates found in the Governor’s budget plan presented early in the same month, according to State Controller Johan Chiang.

The spike in revenues – 39 percent higher than anticipated – appears in Chiang’s report covering California’s cash balance, receipts and disbursements for the first month of the calendar year, released February 8.

“Last month’s revenues were by far the highest California has seen in any January for the past decade. Along with increased auto sales, rising home values, and more construction, it signals that California may be entering an era where we can govern outside of crisis,” Chiang said.

“However, given our state’s troubled history with boom-or-bust revenue cycles, this good news must be tempered with increased fiscal discipline in how we interpret and budget January’s collections.”

According to the Legislative Analyst in a February 1 report, estimated state income tax payments by individuals and withholding done by employers totaled $12.7 billion in January  — $5 billion over the Brown administration’s estimates.

Chiang says personal income tax receipts during January were $4.8 billion — 54.7 percent – above Brown administration estimates.

Corporate taxes came in $11.4 million, 45.5 percent, above estimates. Sales tax receipts were $582.7 million or 27 percent below projections.

“Corporate taxes remain the primary weak link although they typically account for 10 percent or less of total revenues,” Chaing writes in his analysis of the numbers.

“While January’s total exceeded that contained in the current budget that estimate has been revised sharply downward from that published last spring as part of the 2012 budget. January’s corporate tax collection was only about a quarter of the prior year’s figure.”

California ended the last fiscal year with a cash deficit of $9.6 billion, Chiang says.

As of January 31, that cash deficit totaled $15.7 billion and was covered with $5.7 billion of temporary loans from other state funds and $10 billion of external borrowing.

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