On an "apples to apples" basis, a preliminary review of the Governor's January 2015 budget proposal shows that it assumes that the "Big Three" General Fund taxes for 2013-14 through 2015-16 will be $1.3 billion higher than the LAO projected in November 2014.
Proposition 2 sets aside a portion of California's General Fund tax money for 15 years for certain debt payments, including, potentially, payments to reduce the state's large unfunded retiree health liability.
The Department of Finance's Finance Bulletin, today's version of which includes November 2014 revenue data, is the key report on state revenues each month.
Over the past several decades, the personal income tax has replaced the sales tax as the main source of the state's General Fund revenue.
Last week, data showed that personal and corporate income taxes together were $1.6 billion above June 2014 budget projections through November 30. New preliminary data on November General Fund sales tax collections indicate this tax is running a couple of hundred million dollars below budget act projections for the 2014-15 fiscal year to date.
Proposition 2, passed by voters in November 2014, includes provisions intended to help manage state budget revenue volatility, principally by requiring certain state revenues to be deposited in budget reserves.
The state government's largest revenue source, the personal income tax, is much more volatile than "personal income," one key economic statistic that measures the overall size of the economy.
Most months, we will provide updates on California state tax revenue collections. These updates will come in several waves as information becomes available. In this post, we discuss November 2014 personal and corporate income tax collections.