State Receipts For September Beat Governor’s Estimates
California’s September receipts came in $1.1 billion, or 15.3%, ahead of estimates made in Gov. Arnold Schwarzenegger’s May budget revision, State Controller John Chiang reported Monday.
The controller didn’t see much reason for joy in the numbers, however, pointing out that the Golden State’s 100-day record delay in arriving at a budget left it owing $8.3 billion to various entities, including local governments, which haven’t been paid since July 1.
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After accounting for September’s cash receipts and expenditures, the state has just $3.5 billion at the end of October, creating a need for at least $4.8 billion this month alone, Chiang said.
“It’s difficult to celebrate a budget deal that does so little after so long,” he said. “The latest casualties of this historically late budget include the many schools, taxpayers and daycare providers whose payments will now be delayed so that long-suffering Californians who received nothing from the state for the past 100 days will finally get some financial relief.”
The state is attempting to borrow about $5 billion or $6 billion from banks quickly in a private placement and then publicly sell about $10 billion of revenue anticipation notes “no later than the first week of November” to help smooth over the state’s cash shortfall, Treasurer Bill Lockyer said last week.
That would be followed later by long-term financing that would be used partially to take out the notes without a need for the state to issue IOUs to vendors, as it was forced to do last year. Those longer-term bonds, though, would face a “blackout period,” in which no debt is sold until after Election Day, when a new administration begins work on a new budget.
For 27 of the past 28 years, revenue anticipation notes have been used to smooth over cash shortfalls during the early “revenue-dry” months of the fiscal year until the bulk of annual revenues are received in the last third of the year, Chiang said. Although they are usually obtained by September or October, this year’s RANs have not yet been sold due to the absence of a spending plan, the controller said.
September’s corporate taxes were up $378.7 million, or 46.1%, from estimates, while sales taxes rose $60 million, or 2.9%, from estimates. Personal income tax revenues beat estimates by $732.9 million, or 22%. Chiang said the personal income tax gain probably reflects accelerated revenues due to recent changes in tax deadlines rather than a significant upturn in the economy.
The Wall Street Journal contributed to this report
