Last Wednesday, the State Controller’s Office (SCO) released its report on the state’s financial status. Accounting for timing issues related to sales tax deposits, the report details general fund receipts and disbursements for the month of December and shows revenues came in $103.4 million (1.1 percent) above estimates contained in the governor’s 2012-13 budget. Personal income taxes in the month of December came in $767.6 million above (13.4 percent) monthly estimates, and corporate taxes came in $445.9 million below (-31.2 percent) those estimates.

According to an SCO press release, December’s sales tax receipts were affected by a large timing issue at the end of the calendar year. While $1 billion of sales tax was deposited into the Board of Equalization’s bank account on December 31, those dollars were not transferred to the state general fund for another two days. Because the controller’s monthly cash report shows general fund balances reported by close of business on December 31, the $1 billion of late-deposited December sales tax dollars will instead appear in January’s report. Without accounting for this timing issue, total revenues fell $896.6 million below (-9.6 percent) monthly estimates.
California ended the last fiscal year with a cash deficit of $9.6 billion. As of December 31, that cash deficit totaled $24.2 billion and was covered with $14.2 billion of internal borrowing (temporary loans from special funds), and $10 billion of external borrowing.

If you have any questions on this issue, please do not hesitate to contact Kevin Gould, CBA’s senior vice president and director of state government relations, at kgould@calbankers.com or (916) 438-4410.