Uh-Oh

There’d better be a lot of misplaced or unopened envelopes at the Franchise Tax Board, if California hopes to reach the $8.9 billion in personal income taxes it expects to collect by the end of the month.

 While Monday April 27 saw $1.4 billion added to the tally over the transom over the weekend, Tuesday April 28 saw just $227,525 in additional revenue. That increased the month’s total to $7,643,113 billion.

Corporate tax collections, expected to be $2.3 billion, by month’s end, increased by only $103,058 on April 28, to reach $1.6 billion. Refund claims, however, stayed at $2.5 billion.

The budget signed on February 20 is already $8 billion out of balance, according to the Legislative Analyst. Lower-than-expected tax collections, particularly in April – and in June, another big collection month – deepen that fiscal hole. 

A major contributor to the low collection is the state’s poor economy. Unemployment stood at 11.2 percent in March — up nearly 5 percent from March 2008.

Elsewhere, a study recently released by the California New Car Dealers Association shows new vehicle sales down 43 percent in the first quarter of 2009 over the same period last year. 

Even more dire is the calling of two special meetings of the association’s members to create contingency plans if a manufacturer declares bankruptcy.

-30-