California Economy and Taxes

Income Tax Withholding Tracker July 5, 2024

June PIT withholding came in $607 million (7 percent) below projections included in the 2024-25 May Revision. June's weaker-than-projected withholding should be interpreted alongside May totals, which were $1.1 billion above projections. Taken together, May and June withholding came in 4 percent above budget projections. For the fiscal year overall, 2023-24 PIT withholding came in about 5 percent higher than the prior year. 

Cannabis Tax Revenue Update May 31, 2024

Our new forecast for 2023-24 cannabis excise tax revenue is $649 million, slightly below the May Revision forecast of $665 million.

Updated "Big Three" Revenue Outlook May 2, 2024

Revenues Likely to Fall Below Governor’s Budget Assumptions. Our forecast continues to suggest there is significant downside risk to state revenues relative to the Governor’s Budget. Specifically, our forecast is $19 billion below the Governor’s Budget across the 2022-23 to 2024-25 budget window. That being said, there is still significant uncertainty about how much revenue the state ultimately will collect. It is entirely possible that revenues could end up $8 billion higher or lower than our estimate for 2023-24 and $20 billion higher or lower for 2024-25.

Cannabis Tax Revenue Update: February 2024 February 27, 2024

Our new forecast for 2023-24 cannabis retail excise tax revenue is $675 million, very close to the January Governor’s Budget forecast of $660 million.

Recent Revenues Coming in Below Governor's Budget Projections January 22, 2024

In the first few weeks of January, real-time personal income tax (PIT) revenue collections are running $3 billion to $4 billion short of the January target for current year revenue projections included in the 2024-25 Governor's Budget.

Cannabis Tax Revenue Update: November 2023 November 30, 2023

Our new forecast for 2023-24 cannabis retail excise tax revenue: $702 million. This is $206 million above the budget package assumption.

Cannabis Tax Revenue Update August 30, 2023

The 2023-24 budget package anticipated a funding shortfall for programs supported by cannabis tax revenues. Our new revenue estimates are higher, yielding a smaller funding shortfall.

Cannabis Tax Revenue Update: May 2023 May 23, 2023

The May Revision anticipates a funding shortfall for programs supported by cannabis tax revenues. Our new revenue estimates are slightly higher, yielding a slightly smaller funding shortfall. Specifically, our estimate for 2022-23 cannabis retail excise tax revenue is $509 million. This is $24 million above the administration’s May Revision estimate but $133 million below the January Governor’s Budget estimate.

The 2023-24 Budget: May Revenue Outlook May 13, 2023

We discuss our May revenue outlook. 

Updated 2022-23 "Big Three" Revenue Outlook March 15, 2023

Based on the most recent revenue and economic data, we currently estimate that collections from the state’s “big three” taxes—personal income, sales, and corporation taxes—are likely to fall below the Governor's Budget assumption of $200 billion in 2022-23. 

Cannabis Tax Revenue Update February 22, 2023

Revenue from the cannabis retail excise tax has declined for six straight quarters. 

November 2022 Cap-and-Trade Auction Update December 14, 2022

Based on the preliminary results, the state will receive an estimated $961 million in revenue from the most recent quarterly cap-and-trade auction held on November 16, 2022. 

Cannabis Tax Revenue Update November 18, 2022

Cannabis tax revenues have declined for five straight quarters. One part of last quarter’s revenue decline is the lost revenue from the recently eliminated cultivation tax. Despite this policy change, revenues from the retail excise tax declined faster than ever before, indicating that other factors continue to drive down revenues. 

October Tax Collections  November 17, 2022

Although October colletions from the state's “big three” tax revenues—personal income, corporation, and sales taxes—came in far ahead of Budget Act assumptions, this is not indicative of better than expected revenue performance for 2022-23 overall. Instead, a closer look at the data shows that the recent trend of revenue weakness continued in October. 

Income Tax Witholding Tracker: August 2022 September 1, 2022

August state income tax withholding was down $450 million (6.1 percent) compared to last year.