California income and corporation tax collections surged in December, pushing estimated tax revenue since July to about $3.6 billion above what lawmakers projected when they approved the current budget, according to preliminary totals compiled by the nonpartisan Legislative Analyst’s Office.
Preliminary income tax totals in December came in about $1.5 billion above what the budget projected for the month. Net corporation tax collections topped budget estimates by $500 million, according to the LAO. That total – for just one month – is almost as much as the $2.5 billion that the LAO recently projected state revenue would exceed budget estimates for all of 2014-2015.
The report comes as Gov. Jerry Brown prepares to release his proposed spending plan for the coming year Friday. It will reflect the administration’s own revenue estimates, which typically have been on the more conservative side. Advocates for the poor, universities, and other groups, meanwhile, have stepped up demands in recent days that Brown devote more money to restoring recession-era cuts and step up efforts to reduce poverty.
Virtually all of the money above projections would go to schools and community colleges under California’s constitutional school-funding formula.
December is a major income tax month, with high-income filers making their final “estimated payments” for the year. There also is a lot of income tax withholding and corporation tax collections.
Will last month’s numbers hold up? Preliminary amounts can change. Estimated payments will continue to arrive in the coming weeks, and that could either build on or erode the December numbers, according to the LAO.
The chart below (or click here) shows monthly income tax and corporation tax revenue estimates in the state budget compared to preliminary estimates of what the revenue actually is, based on the LAO’s report and the Department of Finance’s fiscal bulletins. Sales tax is another “Big 3” revenue sources; actual sales tax revenue, though, has closely tracked June budget estimates.
Call Jim Miller, Bee Capitol Bureau, (916) 326-5521. Follow him on Twitter @jimmiller2.