State Controller Reports August Revenues $134.9 Million Above Budget Projections - Fears of "Trigger Cuts" Remain

Posted on 09 September 2011

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By Marty Omoto

State Controller John Chiang today released his monthly report covering California's revenues, including cash balance, receipts and disbursements for August, showing revenues came in $134.9 million above (2.1 %) projections from the recently passed 2011-2012 State Budget - though fears that State budget "trigger cuts" that impact a wide range of programs including developmental services and In-Home Supportive Servicecs, remain because the revenue numbers are soft.

Income taxes were above projections by $127.4 million (4.1%)  in August. Sales taxes were up $8.6 million (0.3%), and corporate taxes were up $46.7 million (51.4%) in the same month.

While the news is welcomed by policymakers and advocates after the report last month that showed July revenues coming in far below the State budget numbers, the total State General fund revenues - with the August revenue numbers added in - are still behind the 2011-2012 State Budget's projections by $403.8 million.

The level of revenues coming into the State is critical whether or not a series of "trigger cuts" are pulled in December that would reduce State general fund spending in a wide range of programs and services, including those impacting children and adults with disabilities, mental health needs, the blind and seniors, low income families, and children in education programs. 

Chiang Warns That September Revenues Will Be Critical

"While August revenues did not fully offset last month's shortfall, we are fortunate that the recent market upheaval, sluggish job growth and continued weakness in key segments of our economy did not lead to a third straight month of slipping revenues," said Chiang.  "We now look to September and its $7.6 billion of projected revenue – making it the largest cash month between now and December 15, when a decision must be made on whether to pull the trigger to cut more program funding."

Chiang also reported that while sales taxes initially looked more robust in August, it was discovered that the Board of Equalization mistakenly allocated $343 million of local government dollars to the State.

The 2011-2012 State Budget enacted a major shift or "realignment" of state responsibilities and revenues to local criminal justice, mental health, and social service programs. The $343 million of sales tax should have been allocated locally as part of the new realignment program, according to the State Controller who said that the error will be corrected this month.


Marty Omoto is Executive Director of the California Disability Community Action Network, a non-partisan link to thousands of Californians with developmental and other disabilities, people with traumatic brain injuries, the blind, the deaf, their families, community organizations and providers, direct care, homecare and other workers, and other advocates to provide information on state and local public policy issues.