California January revenue drops 20 pct, but deficit narrows

LOS ANGELES Mon Feb 10, 2014 5:54pm EST

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LOS ANGELES Feb 10 (Reuters) - California's revenue fell 20 percent in January from a year earlier to $12.2 billion, but surpassed estimates in the state budget, controller John Chiang's office said on Monday.

Tax revenue exceeded estimates in Governor Jerry Brown's 2014-15 budget by $387.7 million, or 3.3 percent, the controller's office said.

Jacob Roper, a spokesman in the controller's office, said the dip in revenue was mainly due to an anomaly in the timing of when tax receipts are collected. There was an unusual surge in collections in January a year ago, he said, which was not replicated last month.

Cash from personal income taxes, California's most important source of revenue, came in at $10.66 billion, down from $13.45 billion for January 2013.

Revenue from sales taxes came in at $1.22 billion, down from $1.6 billion in January 2013, while $256 million was collected from corporate taxes, up from $36 million a year ago.

California's unemployment rate has dropped to 8.3 percent, still above the national rate of 6.7 percent but well below the state's peak of 12.4 percent in October 2010.

California ended January with a general fund cash deficit of $12.6 billion, down from a cash deficit of $15.7 billion at the end of January 2013.

In a statement, Chiang said the latest revenue figures confirm that "California is continuing its slow climb out of the wreckage of the Great Recession."

Chiang added: "Spending discipline and paying down debt must continue to be our focus."

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