By Jim Christie
SAN FRANCISCO May 8 California collected $15.03
billion in revenue in April, putting the state's fiscal
year-to-date revenue at $4.6 billion above the estimates in
Governor Jerry Brown's initial budget plan, the state
controller's office said on Wednesday.
Overall revenue in April missed the budget estimate by
$119.9 million, but was up $5.4 billion from the same month a
year earlier - an increase of 55.9 percent - propelled by rising
incomes and consumer spending, State Controller John Chiang's
office said in a report.
"On balance, California's fiscal health has improved
materially and the state is beginning to turn the corner," the
The report came a week ahead of Brown's expected release of
his revised budget plan for the state's fiscal year beginning in
July. The new plan will incorporate the latest revenue
In his initial budget plan, Brown projected deficit-prone
California's budget could swing to surpluses as the economy
improves, and if lawmakers support his efforts to restrain
State and independent budget analysts have also been
expecting the most populous U.S. state's revenue to improve
after voters in November approved a measure pushed by Brown to
raise the state's sales tax and personal income-tax rates,
retroactive to last year, on wealthy taxpayers.
Additionally, federal income-tax changes that went into
effect in January may have spurred many California taxpayers to
sell investments last year. The rising stock market may also be
propelling capital gains revenue for the state.
Personal income taxes are California's most important source
of revenue. The state has historically relied on its wealthy
taxpayers to provide much of those taxes.
BREAKING INTERNAL BORROWING STREAK
April marked a milestone for California's finances,
according to Chiang.
"For the first time in nearly six years, we closed out a
month without borrowing from internal state funds to pay our
bills," Chiang said in a statement.
Even so, California faces "significant debt that must be
shed before we can claim victory, and these unanticipated
revenues provide us with an important opportunity to take
further steps toward long-term fiscal stability."
In January, Standard & Poor's upgraded its rating on $73.1
billion of California's general obligation bonds by one notch to
A from A-minus in part due to the state's improving finances and
projected balanced budgets.
S&P also upgraded California because Brown plans to largely
retire the state's backlog of internal loans and deferred
payments - one-time moves the state has used to help close
budget gaps and bolster its finances.
Brown estimates the cost of those moves, which he calls "The
Wall of Debt," at nearly $28 billion.
The governor wants to reduce that to $4.3 billion over the
next four years, an effort that would put California's finances
on considerably stronger footing if the state runs into a
revenue slump and needs to borrow from its internal funds, S&P
analyst Gabriel Petek said.