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State tax revenue dips in November, up for the year

December 10, 2013|By Marc Lifsher
  • A state worker files income tax returns. Tax revenue was below estimates for November but up for the fiscal year.
A state worker files income tax returns. Tax revenue was below estimates… (Laura Morton / For The Times )

SACRAMENTO -- California's tax revenue came in about 6% below forecasts in November, but state Controller John Chiang dismissed the drop as a fluke of the calendar.

Last month's total of $6 billion was $375.6 million under estimates, Chiang said. But, revenue for the first five months of the fiscal year was $31.4 billion, ahead of budget predictions by $228.1 million.

QUIZ: How much do you know about California's economy?

Meanwhile, state spending since the July 1 start of the fiscal year was down $126.3 million from budget assumptions.

Chiang blamed the lower-than-anticipated November sales tax revenue on the Thanksgiving holiday and the Black Friday shopping frenzy occurring at the tail end of the month. As a result, $440 million of associated sales tax revenue was not collected until December.

The overall revenue flow and an improved economy have made the controller "cautiously optimistic" about the state's near-term financial situation.

However, he warned that lawmakers must "remain disciplined with our spending and pay down the billions of debt accrued during the Great Recession."

The boost in revenue, fueled by a booming stock market, growing employment and improved retail sales, has put California in a stronger budgetary situation than any time in the last decade, the independent Legislative Analyst's Office reported recently.

The analyst predicted that the treasury would roll up multi-billion surpluses in the coming years before a series of temporary tax hikes expire in 2018.

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Twitter: @MarcLifsher

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