Revenues Come Up Short

California’s Department of Finance said general fund July revenue came in $541 million below the forecast in the recently adopted budget. The figure fell more than 9% short of the fiscal 2012 budget forecast of $5.86 billion, confirming a similar reading released last week by Controller John Chiang.

If revenue fails to line up as expected during the year, cuts will be triggered in the budget at various stages depending on the severity of the shortfall.

The controller said July revenues were $538 million below projections in the budget that Gov. Jerry Brown signed at the end of June, which relied partly on upbeat revenue projections to fill a multibillion-dollar gap.

Brown signed the state’s $85.9 billion spending plan on the final day of the fiscal year. Lawmakers, relying on the Democratic majority, passed a budget based on spending cuts plus $4 billion of future revenue to fill a $9.6 billion hole.

If revenues are going to hit targets, finance officials said the bulk of the tax collections will come in from December through June. The Legislative Analyst’s Office and the Finance Department will produce new revenue forecast for fiscal 2012 in November and December.

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California
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