State Ends Fiscal Year Above Budget Expectations
Department of Finance (DOF) reports a total of $136 billion in general fund cash for 2017-18. That’s $1.5 billion higher than the 2018 Budget Act forecast. June alone brought in $1.6 billion of unanticipated revenue, mainly in personal income and corporation taxes representative of second quarter returns. These results offset disappointing sales tax revenues, which fell behind fiscal year budget estimates by $380 million, or 1.5%.
Personal income taxes finished the fiscal year $1.2 billion (1.3 percent) above forecast which bodes well for the Mental Health Services Fund (MHSF). Strong returns in the month of June resulted in a MHSF transfer amount of $213 million which is $14 million higher than anticipated.
Corporation taxes additionally finished the fiscal year on a high note, beating expectations for the month of June by $606 million, or 23 percent. That brings the total to $12.5 billion, which is 4.4 percent above budget forecast.
DOF also tracks other economic factors, such as building and real estate activity, to see where the economy is heading. The latest report shows that California’s median home price hit a new high of $600,860 in May, up 2.8 percent from April and 9.2 percent from May 2017. As a result, home sales have declined on both a monthly basis (-1.8 percent) and an annual basis (-4.6 percent). Building activity, however, continues to increase, along with personal income.