When income tax revenues fell billions of dollars short of expectations last month, modest gains in other revenues were wiped out, leaving the state running well behind, Controller John Chiang reported Friday.
"Four months of positive receipts were erased in the last 10 days of April," said Chiang. "Because a surge in revenues has not come, the governor and Legislature need to move quickly and forge the consensus needed for a balanced budget. Any delay will only limit their options and expose already struggling Californians to greater harm."
The April figures are critical because with an April 15 deadline for filing personal income taxes, it is the most important month in state revenue calculations. Through March, the state had been running $2.3 billion ahead of projections for the 2009-10 fiscal year that ends June 30, thanks to modest increases in other taxes. But April came in $3.6 billion, or 26.4 percent, behind, Chiang said in his monthly report on state income and outgo.
The sharp revenue shortfall was not offset by an equally sharp drop in state spending. Through April, outlays were running just $102 million below estimates. The state began the fiscal year last July with an $11.9 billion general fund cash deficit, which has since grown to $20.2 billion. It's been covered by $11.4 billion in internal borrowing from other state funds and $8.8 billion in privately placed "revenue anticipation notes," which must be repaid by June 30.
The poor April revenue data are expected to sharply affect the Schwarzenegger administration's revision of his proposed 2010-11 budget, which is now under way and will be released in about a week. That budget also assumes an extra $7 billion in federal aid, but there have been no indications it will materialize. The May revision will touch off weeks of increasingly frantic political maneuvers over the 2010-11 budget, which is supposed to be completed by June 30, but which is usually finished much later in the year.
The full controller's report can be found here.
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