July 2016 General Fund Revenues

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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