The state Finance Department's latest cash report reveals just how much guesswork goes into the budget.
The state is down $1.2 billion in revenues so far this year, most of it due to the corporate tax. The Schwarzenegger administration had assumed that many companies elected to forgo early tax payments in December, and anticipated the money to be recovered in March.
Too bad wishes don't always come true.
According to the Finance Department’s April cash report, "March’s cash now indicates that the weakness in December was not due to companies conserving cash or tax management reasons but rather to weakness in underlying profits."
Besides a weak business climate, the housing slump continues to cost the state jobs. Although the state added 25,800 non-farm jobs in February, much of the gain was attributed to the end of the writer’s strike. Financial, construction and manufacturing sectors lost a combined 9,600 jobs.
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