As expected, the $5 billion in increased tax revenues (really $4.3 billion) is due to timing and one time money. A billion of that comes from sales tax revenues from December but not reported till January. $3 billion was one time money due to Obama tax increases and Prop. 30 retroactive taxes.
Expect revenues for the year to be done and spending up—making the deficit even larger. According to Assemblywoman Diane Harkey the current debt/deficit of California is $90 billion—guess Brown keeps forgetting about that.
◦ “Personal income tax revenues to the General Fund were $4.951 billion above the month’s forecast of $7.608 billion, likely the result of major tax law changes at the federal and state level having a significant impact in the timing of revenue receipts. At the state level, the surge was due in part to the Proposition 30 rate increase that was adopted by voters in November of 2012. Taxpayers likely paid a larger share of that additional liability in January, rather than waiting until April as forecast. In addition, the Governor’s Budget forecast that taxpayers would accelerate income in 2012 since federal tax rates were widely expected to increase in 2013. It appears there may have been a larger shift in income from 2013 to 2012 than expected, which would be reflected in higher estimated payments made in January.”
The report from the Department of Finance is here.
Crossposted on California Political News & Views