April Income Tax Collections End on a Low Note
May 4, 2017
According to preliminary data provided by the Legislative Analyst’s Office (LAO), April income tax revenues are not as robust as hoped. Although the month started out strong, the last ten collection days fell flat of expectations, eroding a significant portion of the $1.15 billion year-to-date revenue gain reported by Department of Finance at the beginning of April.
As depicted in the chart below, income tax revenues unfortunately tapered off after a significant surge in mid-April. One explanation for the drop-off in revenues is increased processing systems put in place by the Franchise Tax Board, the agency responsible for collecting state personal income taxes in California.
(Graphic source: California State Controller’s Office Personal Income Tax Tracker)
According to the LAO’s preliminary estimates, collections from income taxes (including both personal income taxes and corporation taxes) fell $950 million below what the Governor forecasted in his January Proposed Budget. Where this puts the state’s year-to-date general fund revenues is unknown until the Department of Finance (DOF) posts collection data on the other revenue sources such as sales and use tax.
With the Governor’s May Revision due in a little over a week, CSAC remains on close watch and will keep counties apprised of any new revenue developments.