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.
December PIT withholding came in $1.8 billion (about 13 percent) lower than last year. For the fiscal year so far, withholding is running 6.7 percent lower than last year, with all of the weakness coming since the last week of August.
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.
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.
August state income tax withholding was down $450 million (6.1 percent) compared to last year.
Cannabis tax revenues have declined substantially for three straight quarters.
California income tax withholding collections were $90 million (1 percent) lower in July compared to last year.
California income tax collections were down 2 percent in June relative to last year.
Preliminary cannabis tax revenue for 3rd quarter of 2021-22: $189 million.
We discuss our May revenue outlook.
Our estimates suggest that it is virtually certain that collections from the state’s “big three” taxes—personal income, sales, and corporation taxes—will significantly exceed the Governor’s Budget assumption of $185 billion in 2021-22. Currently, our best estimate is that there will be somewhere between $33 billion and $39 billion in unanticipated revenue.
Based on the most recent revenue and economic data, we currently project that there is a very good chance that collections from the state’s “big three” taxes will exceed the Governor's Budget assumption of $185 billion in 2021-22 by at least several billion dollars.
Preliminary cannabis tax revenue for 2nd quarter of 2021-22: $196 million. Over the past year, cannabis tax revenue has grown much more slowly than it did previously.
Based on the most recent revenue and economic data, we currently project that there is a very good chance that collections from the state’s “big three” taxes will exceed the Governor's Budget assumption of $185 billion in 2021-22 by at least several billion dollars.
Based on the most recent revenue and economic data, we currently project that there is a strong chance that collections from the state’s “big three” taxes will exceed the Governor's Budget assumption of $185 billion in 2021-22.