Stacks of U.S. $100 bills. (Scott Eells )
SACRAMENTO -- The surge of revenue that showed up unexpectedly in state coffers last month has been the source of all manner of speculation here. When all the tax receipts were counted, the state had collected more than $5 billion beyond what had been initially projected for January.
That is more tax dollars than are allocated to the entire state university system in a year. The revenue bump was historic.
The question for budget experts was whether the windfall was real money that lawmakers could begin allocating toward government programs and tax breaks -- or whether it amounted to an accounting anomaly that would be offset by a huge dip in revenue later in the budget year.
Gov. Jerry Brown’s budget office now advises in an official cash report that it is probably the latter. Lawmakers need not do very much reading between the lines to realize that Brown does not see the surge as occasion to pack the budget with extra spending.
The report says the extra revenue was "likely the result of major tax law changes at the federal and state level having a significant impact in the timing of revenue receipts.”
That is, taxpayers are paying a big share of their bill early, getting income off their books in the hope of limiting exposure to the tax hikes that recently kicked in. The administration was expecting that money to arrive in April. Now it is saying it won’t and that just as January’s receipts soared, Californians can expect them to be offset by a big plunge in the spring.
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