The Rest Is Gravy — April Tax Receipts Keep Budget Balanced

 

The Franchise Tax Board reported another $2.9 billion in state income tax payments on April 17 bringing the month’s total net receipts to nearly $9 billion.

That’s very good news for state budget writers because it means – at a minimum — Gov. Jerry Brown’s January budget plan remains balanced.

“With month-to-date (state income tax) collections, net of refunds, now approaching the $9 billion mark, California has surpassed the $8.5 billion total for the month that was necessary to remain on track with the administration’s most recent revenue estimates,” the Legislative Analyst writes on its website.

“It is difficult to predict what will occur between now and April 30 but, based on recent years’ results, collection of another $2 billion or more in (income tax) revenue during the rest of the month seems quite possible.”

Expect the Democratic majority Legislature to propose spending any money above what’s necessary for Brown’s budget to pencil out on public schools or health and human services programs sharply cut back due to past revenue shortfalls.

In his $138 billion January spending plan, the Democratic governor predicted a net total of $13.3 billion in tax receipts. That’s a gross of $16 billion in withholding by employers and estimated payments by individuals minus $2.7 billion in predicted refund requests.

Through April 17, requests for refunds were $1.6 billion.

Unlike the last several budget years, whether the state fell short of  its estimated April collections wasn’t a make-or-break situation because the state was running well ahead of projections going into April. .

Brown’s Department of Finance reported on April 12 that through the end of March, the state was running $4.7 billion above the budget’s revenue estimates.

As the Legislative Analyst says, even if the state were to have netted only $8.5 billion for April in income tax payments, Brown’s budget would still have stayed balanced.

April is also supposed to yield a net of just under $1.5 billion in bank and corporation tax receipts.

Through April 17, $1.1 billion has been received in payments and $34 million in refunds requested.

The state’s $4.7 billion cushion came in large part because tax payments in January were $12.7 billion — $5 billion more than the Brown administration expected for the month.

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