State Revenues Continue to Impress
Five months into the current fiscal year, preliminary state revenues are $1.943 billion, or 4.5 percent, above the 2018-19 Budget Act forecast. Bolstered by positive labor market conditions and historically low unemployment, the California economy is looking strong as the Legislature heads into budget deliberations for Fiscal Year 2019-20.
Fiscal year-to-date, income taxes account for most of the unanticipated revenue – nearly $1.7 billion, or 5.8 percent. As a result, the Mental Health Services Fund (MHSF) sees proportionate growth. In November, the amount transferred to the MHSF was $18 million above forecast.
Also, corporation tax, even though it underperformed for the month of November, is surpassing year-to-date estimates by $87 million, or 4.3 percent.
Sales and use tax is lagging behind budget estimates by $6 million, or 0.1 percent; however, revenues are nearly $700 million higher than the same time last year.
This information lays the foundation for Governor-elect Newsom’s 2019-20 Budget proposal, due to the Legislature by January 10. Upon release, CSAC will provide a Budget Action Bulletin with the key provisions for counties. Please contact CSAC Legislative Staff with any questions.