California's general fund revenues for May came in $176 million below estimates in Gov. Jerry Brown's May budget proposal, according to the Department of Finance.
The Finance Department said $307 million of one-time corporate tax refunds pushed down the month's revenues.
Corporation tax receipts were $300 million below the month's estimate of $253 million.
Factoring in the one-time corporation tax refunds, year-to-date revenues, which include revisions to prior months, are $93 million below the estimate of $72.599 billion, according to the Finance Department.
Personal income tax revenues for the general fund rose $53 million compared to the May forecast.
Sales and use taxes fell $109 million below the governor's prediction, the Finance Department said.
A recent report by Standard & Poor's highlighted the thesis that the state's tax system has caused problems for the state budget.
The report said that because California's tax framework has not changed to reflect the economy, which is now based on services rather than retail sales, revenues have been declining relative to spending.
California's revenue stream has also become more volatile, the agency said. It depends more on personal income taxes on high-income earners, whose income fluctuates based on the stock market, according to Standard & Poor's.