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Cash flow dips but California's finances secure, controller says

March 12, 2012 | 12:37 pm

California issued more tax refunds than expected in February, the likely reason that revenues fell $146 million short of estimates, the state controller said Monday.

Controller John Chiang said, however, that the state should be able to pay its bills until the end of the fiscal year on June 30, pointing out that revenue could rebound in the coming months when more residents file their taxes.

“The broader economic context suggests that both California and the nation continue to heal,” a report issued by Chiang's office said.

Officials announced Friday that the state's unemployment rate was 10.9% in February, the lowest it's been in almost three years but still far higher than the 8.3% national average.

"Fewer people unemployed mean more people have more money to spend," said Jean Ross, executive director of the California Budget Project, a Sacramento-based think tank. "That’s good for state tax revenue."

Chiang previously warned that California could drop into the red in March, but Gov. Jerry Brown and lawmakers have worked to shift money within the budget to make sure the state can pay its bills.

-- Chris Megerian in Sacramento

twitter.com/@chrismegerian

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