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Tax agencies and the Department of Finance (DOF) have provided preliminary information on California's key General Fund revenues for the month of July, the first month of the 2016-17 fiscal year. As summarized below, for the "Big Three" income and sales tax revenues combined, agency cash revenues were $314 million below 2016-17 Budget Act projections for the month of July. Personal income tax withholding collections were up only 0.6% from July 2015 levels, and this withholding amount alone was $247 million below expectations for the month of July 2016. A quirk of the calendar may be largely responsible for the seemingly weak withholding growth: July 2016 had 20 tax collection days, while July 2015 had 23.

DOF's Finance Bulletin shows the $314 million monthly shortfall in the "Big Three" taxes plus a net $16 million shortfall in other minor revenues, adding up to a total shortfall for the month of $330 million compared with budget projections.

June 2016 revenues also were over $700 million below 2016-17 Budget Act monthly projections, as summarized here

While the monthly revenue shortfalls (especially the one in June) are a concern, July itself is a minor state revenue collection month. Our office's next Fiscal Outlook, including updated scenarios concerning state revenues, is expected to be released in mid-November.

 

This post was corrected at 9:25 a.m. on August 10, 2016, primarily to add discussion of the number of tax collection days during the month of July. On August 16, a link to the monthly Department of Finance Finance Bulletin on July revenues was added, and the number of July 2016 collection days was corrected.

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