California’s Tax Revenues

According to the October Finance Bulletin issued by the Department of Finance, California’s tax revenues in September were 43 percent greater than forecast by the 2020–21 Budget Act enacted in June. Revenues for the first three months of the current fiscal year are now $8.7 billion greater than forecast. That’s good news for programs worried about funding cuts.

Don’t blame DOF for an inaccurate forecast. Because California’s tax revenues are dependent on capital gains derived from inherently unpredictable investment markets, it’s not possible to make accurate forecasts. They do their best. On the other hand, feel free to blame the State Controller’s Office for California being the only state that still hasn’t issued a Comprehensive Annual Financial Report for the fiscal year that ended nearly 500 days ago. Just imagine how officials would react to your business or non profit not filing your annual report on a timely basis.

The October Bulletin also notes a dip in the state’s unemployment rate to 11.0 percent, though that’s more than three percentage points greater than the national unemployment rate. The Employment Development Department reports improvement in fulfilling unemployment claims, with the backlog falling from 1.6 million to 1.2 million.

In our federalist system, states provide the lion’s share of domestic services and write laws and codes impacting schoolchildren, jobs, wages and much more. At GFC we think the foregoing is the sort of information all concerned Californians should track.

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