California’s cash balance higher than expected in February

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There was more money in California’s piggy bank than officials had expected in February, leading Controller John Chiang to tell The Times in a phone interview that the state is ‘headed on a slightly better path.’

General fund revenues were $480 million higher than the 2010-11 budget had projected, the controller’s office said. Corporate tax revenues exceeded estimates by 89.2%, or $119 million, and sales tax beat projections by 17.9%, or $544 million. Personal income tax revenues were $250 million lower than anticipated, but that shortfall was offset by the increases in the other areas.

The extra cash means that Californians probably won’t have to wait longer than usual for income tax refunds, or be stuck with IOUs, as many were last year when the state dealt with a major cash-flow crisis.

‘Absent any major calamities, we will not have to issue IOUs,’ Chiang said.

Still, the state isn’t flush with cash and probably won’t be any time soon. California ended its last fiscal year with a deficit of $11.9 billion. Continued weakness in the commercial real estate market could deal another blow to California and slow down the apparent recovery, Chiang said.

‘We’re not out of the woods yet, we still have some long-term debts,’ he said.

Still, revenue is up from last February. Sales tax receipts are up 10.1% from last year and corporate taxes are up 2.6% from February of 2009. This is the third consecutive month in which revenues have improved in the state.

-- Alana Semuels