California Budget Deficit Grows As Income Tax Receipts Are Underwhelming

SACRAMENTO (KCBS) – California is taking in far less tax money than the state’s budget-writers expected, meaning the state’s deficit is even bigger than the governor feared.

Personal income tax receipts were about $2 billion less than projected in April and overall, California collected about $2.5 billion less in revenue last month than expected said H.D. Palmer with the state Department of Finance.

KCBS’ Doug Sovern Reports:

“Where we are on cash at the end of April isn’t the sole factor that’s going to determine how much larger the budget gap is from the $9.2 billion that we projected back in January,” said Palmer. “There are a number of other factors that are going to move that number around in one direction or another.”

That includes Facebook’s IPO, which could bring in a billion dollars or more in taxes later this month.

Palmer said that was not budgeted because no one was really sure it would happen.

“While it will be positive for the state’s bottom line, it has to be viewed in the context of closing a budget gap that’s going to be higher than the $9.2 billion that we projected back in January,” he said.

California Governor Jerry Brown is expected to release his revised budget on Monday and of course, he wants voters to raise taxes in November to avoid even deeper cuts than the ones he’ll propose next week.

(Copyright 2012 by CBS San Francisco. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed.)

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