California’s revenues continued to deteriorate in March, as a dramatic drop in retail sales reduced receipts.
California lawmakers closed a $42 billion budget gap in February after months of legislative stalemate with a package of tax hikes and spending cuts. The state’s budget has continued to deteriorate since then.
General fund revenue fell 8.6% to $57.4 billion for the first nine months of fiscal 2009 from $62.8 billion in the same period a year earlier.
Through March, the current fiscal year’s revenues were $178.5 million, or 0.3%, less than budgeted. Personal income taxes, the state’s largest revenue source, are running 1.4% ahead of plan, but sales taxes, the second-largest revenue source, are running 1.2% below estimates.
“Even though revenues are trending downward, the recently adopted budget is tracking much closer to actual receipts,” said state Controller John Chiang. “Unfortunately sales taxes continue to be hammered by diminished retail spending across the state.”
March sales tax collections fell 19% to $1.6 billion from $2 billion in the same month a year ago. So far in fiscal 2008-2009, sales tax collections have fallen 10.8% to $17.6 billion from $19.8 billion in the first nine months of the previous fiscal year.
