|Budget Issue:||Updated revenue forecast due to prior incorrect allocation of sales tax receipts|
|Finding or Recommendation:||Updates our February 15, 2011 General Fund forecast based on updated sales tax information released by the State Board of Equalization and the administration.|
As noted in the February 15, 2011 announcement concerning our multiyear revenue forecast, our sales and use tax (SUT) forecast was premised on the assumption that there had been no incorrect allocation to General Fund SUT revenues of local funds related to the "fuel tax swap" in recent months. In this month's Department of Finance monthly revenue bulletin, the administration notes that the State Board of Equalization (BOE) has determined that about $300 million of prior months' local gas tax revenues "was inadvertently allocated to the state General Fund (due to a reporting error) in the monthly cash receipts reported in August through January."
As noted in our February 15 announcement, this determination by BOE means that our General Fund SUT forecast would need to be adjusted downward. The downward adjustment would be roughly $300 million in 2010-11 and in each subsequent fiscal year.