California comes out ahead for first quarter
LOS ANGELES — The California Department of Finance’s revenue numbers came in only slightly less rosy than the state controller's report released several days before.
The DOF reported that revenues for the first quarter of fiscal 2019 came in $1.032 billion above forecast; for September, they were $160 million above the month’s projection. The controller's report had revenues beating the forecast by $1.4 billion for the quarter.
The state reported an $8 billion surplus when the 2018-19 budget passed in July, but to assess whether that has grown based on first quarter revenue growth would be faulty math.
“We don’t just take a point-in-time number – such as surplus at time of Budget Act signing – and add to it,” said H.D. Palmer, a Department of Finance spokesman.
The reasons why are that “while revenues may currently be running above forecast for a given month or for YTD, they can swing somewhat significantly based on cash receipts and timing,” Palmer said.
“The difference of a couple of days can – and has, swung a given month’s numbers by several hundred million, either up and down,” Palmer said. “Another reason is that while revenues may be running ahead of forecast, spending can and does exceed Budget Act projections. Case in point: just over $442 million was budgeted for the full year for emergency wildfire suppression; we’ve already spent that much and more, which means we’ve had to tap into the reserve. That affects your surplus number.”
Other factors on the revenue side, such as the economic forecast, or the spending side, caseload and enrollment changes, can swing the numbers as well, he said.
“Which is why we peg the surplus/deficit figure at given points in a year – the Governor’s January budget, the May Revision, and when the budget is signed,” he said.