California Personal Income Tax Collections Plunge Below Gov. Newsom’s Budget
California Controller’s office announced state personal income tax (PIT) collections for the April 15 annual deadline missed the governor’s budget by $3.8 billion, or 4.34%.
General Fund PIT receipts for FY 2023-24 ending June 30 had totaled $83.87 billion through March 31. Governor Newsom recently claimed the tax collection revenues were trending 6%, or about $13 billion, higher than his January budget. But a surge in personal income tax refunds reversed the positive trend to a negative shortfall.
Budget Advisor to California Assembly Speaker Robert Rivas and the super-majority Democrat caucus Jason Sisney warned that the recent state revenue outlook weakened dramatically due to higher personal income tax refunds, very low sales tax collection in March, and anemic corporation tax collections that are running several hundred million below Gov. Newsom’s estimate.
The Legislative Analyst Office (LAO) most recent forecast issued on March 8th had already predicted California State General Fund tax revenues for the 2023-24 fiscal year ending in June would be about $16 billion below the Governor’s January estimates. Furthermore, revenue for the next fiscal year beginning on Jul 1st would also be down by about $9 billion from the Newsom Administration’s January budget update.
The April 15th tax drop disappointment coupled with December and January tax receipts coming in $6 billion below the Newsom administration’s January budget forecast, means it is virtually certain the non-partisan Legislative Analyst Office (LAO) Budget Revision projections due by mid-May will result in another big revenue downgrade.
