State Revenues Continue to Outpace Projections
April 19, 2018
The Department of Finance (DOF) recently released the April cash flow report and it delivers largely positive news. For the first nine months of the current fiscal year, state tax receipts are ahead of 2018-19 budget projections by $3.3 billion (or 3.8 percent). Additionally, overall collections total $89.2 billion thru March– an increase in over $8 billion from last year. The following provides a summary of revenue performance broken down by revenue source and details preliminary cash flow for the month of March.
Collections in March, traditionally a minor revenue month, surpassed budget projections by $706 million (or 9.6 percent). Although, while corporation tax and personal income tax both exceeded expectations, sales tax, unfortunately, fell $17 million (or 1.0 percent) short. March’s performance dragged the fiscal year-to-date numbers $26 million (0.1 percent) below budget expectations.
Corporation tax was the main change driver for the month of March, pulling in $534 million (or 70.4 percent) more than projected in the 2018-19 proposed budget. According to the Legislative Analyst’s Office, this could be due to changes in corporation tax filing deadlines, particularly for pass-through business entities. Consequently, they explain, corporation tax revenue will likely fall below budget projections in April.
Personal income tax also fared well, accounting for $31 million of unanticipated receipts. As a result, the amount transferred to the Mental Health Services Fund was $1 million higher than the forecast of $77 million. Fiscal year-to-date, income taxes are $2 billion (or 3.4 percent) above projections.
Overall, this latest report figures positively into the status of the Governor’s May Revision (due to the Legislature by May 14). However, April is a key revenue month for the state and can potentially change the overall fiscal outlook. For daily tallies, see the April revenue tracking website maintained by the State Controller’s Office. Additionally, please contact CSAC legislative staff Dorothy Johnson or Tracy Sullivan for more information.