California Tax Collections Soared Last Year, Giving the State an Extra $1 Billion
Monday, July 22, 2019
California brought in $1 billion more than projected in its last financial year, the state’s Department of Finance announced.
It’s a sign the state’s unusually long period of economic growth is still going.
The news comes just after Gov. Gavin Newsom and lawmakers last month approved a $215 billion state new budget, which relies on a big projected surplus to fill the state’s reserve accounts with more than $19 billion. That money is intended to save lawmakers from having to make deep cuts when the next economic recession hits.
The unexpected bump means the state’s general fund revenue was 0.7 percentage points higher than predicted when lawmakers approved last year’s budget.
About half of the unexpected windfall came from personal income tax revenue, which was $523 million higher than forecast. Sales, corporate, and insurance taxes also came in higher than predicted. Revenue from alcohol sales was $32 million lower than expected.
California collects about 70 percent of its general fund revenue from personal income taxes, and almost half of the money comes from the wealthiest 1 percent of households.
The state’s fiscal year runs from July through June.
The U.S. economy has been growing since June 2009, according to the National Bureau of Economic Research. The 121-month U.S. economic expansion is now recognized as the longest on record.
Category: Economic News