California Expects $14 Billion in Tax Payments This Month
Wednesday, April 18, 2018
Gov. Jerry Brown’s proposed state budget is built on what taxpayers might find an audacious assumption: almost $14 billion in tax payments in the month of April, an average of $83 million collected per hour on every business day of the month.
Most of that money will come from the taxes Californians pay in advance of Tuesday night’s filing deadline for income tax returns. If history is any guide, the rate of payment could quadruple by week’s end.
While tax rules have shifted some of the payment schedules to other months, April remains a vitally important month to the fiscal health of state government. The state controller’s office reports more than 15% of all personal income tax revenues in 2017 were collected in April. In the recession years of a decade ago, tax revenue predictions were frequently off the mark by hundreds of millions of dollars.
The last two state budgets have seen significant windfalls of personal income tax revenue, thanks in part both to an improving economy and to the continuation of a temporary surcharge on the wealthiest taxpayers — extended by voters in 2016. In the budget plan he sent to lawmakers in January, Brown projected a $6.1-billion windfall and proposed using a sizable amount to top off California’s rainy-day fund ahead of schedule.
The independent Legislative Analyst’s Office reports that through the end of last week, the month’s income tax tally stood at $3 billion, slightly ahead of projections. By the end of the current week, a single day’s total could be almost that large.
Lawmakers began reviewing the governor’s $190.3-billion spending plan during the winter, but few decisions are made until they get a look at April’s tax revenues. The governor will release a revised plan based on the new data next month; lawmakers are required to send him a completed budget no later than June 15.
Source: LA Times
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