More Money, More Problems
The state’s revenues beat expectations in February for the third month in a row, this time by about $480 million, or 9 percent. The updated cash flow projection from State Controller John Chiang, updated to reflect the new revenue and the Legislature’s recent action, shows that the state’s cash balance (including borrowable resources) will not dip into dangerous territory until well into next fiscal year, by which time the Controller should be able to borrow to avoid problems (the chart is available here). And another state agency, EDD, reported that California added 32,500 jobs in January, though unemployment rose that month too.
Of particular interest to counties, Sales and Use Tax receipts are not only above estimates, but above last year’s levels. This is true for both the month of February (+13%) and the whole fiscal year so far (+10%). Counties no doubt find it hard to forget February 2009, when the Controller delayed hundreds of millions of dollars of state payments to counties.
While the state’s revenues are better than expected by about $2 billion, they still lag behind last year’s receipts. And what’s more, the General Fund remains more than $22 billion out of balance, and it hasn’t had a positive cash balance since July, 2007. Ever since that time, the state has been running on money borrowed from investors and special funds.
In other news, the Controller released the state’s CAFR for 2009 yesterday. Gluttons for punishment can find it here. If you don’t know what a CAFR is, believe you me, you’re probably the happier for it.