California budget still imperiled by cash crunch
California's tax revenues continue to pour into the state's coffers well below what Gov. Jerry Brown forecast in his budget, a worrisome sign amid indications of an economic upturn.
State Controller John Chiang issued a report Friday showing that tax receipts in January were $528 million lower than the governor assumed in the budget he released a few weeks ago. That budget already assumed a $9 billion deficit.
"January's revenues were disappointing on almost every front," Chiang said in a statement.
The good news -- or what passes for good news in the land of California budgeting -- is that Chiang said the state is no longer in danger of entirely running out of cash next month. The Department of Finance will shift funds around and take out short-term loans to avoid falling as much as $3 billion in the red.
But the continuing lagging tax receipts are another dose of cold water on some who are hoping for an easier budget year.
With Facebook and other Internet companies poised to rake in billions of dollars in IPOs, and a range of data showing the economic recovery starting to accelerate, Democrats have been hesitant to make the cuts that Brown has urged to close the projected deficit. They argue that the administration is being too gloomy.
After Chiang's announcement, Brown's Department of Finance issued an analysis attributing the shortfall to a sudden drop in income tax payments, and said it was too soon to tell whether those receipts would come roaring back in April.
-- Nicholas Riccardi