California tax revenue $3 billion less than target, report says
The legislative analyst’s office has a new number that is adding to California’s financial headache: $3 billion. That’s the total amount that tax revenue has lagged behind goals set by Gov. Jerry Brown’s administration in the current fiscal year.
The shortfall was detailed in a report released on Tuesday by the nonpartisan office, which provides budget advice to lawmakers.
Much of that gap comes from a disappointing April, the most important month for income taxes. Income taxes were $2.07 billion short of the $9.43-billion goal, and corporate taxes fell $143 million short of an expected $1.53 billion, according to the report.
When April's poor results are tacked on to earlier shortfalls, the state has fallen about $3 billion behind tax goals, the LAO said. The ratings agency Standard & Poor's already cautioned Tuesday that poor tax revenue was imperiling California's financial recovery.
It's unclear exactly how much this year's budget deficit will grow because of the tax shortfall. Brown's administration estimated the gap at $9.2 billion in January, but has since said it will grow.
"The number is going to be larger," said H.D. Palmer, a spokesman for Brown's Department of Finance. "We’re going to have a plan to close that gap when we release the May revision," the updated budget proposal that is expected by May 14.
-- Chris Megerian in Sacramento