The majority of the shortfall was in income taxes, down $525 million, or 6.3 percent less than projected in the spending plan Brown released Jan. 5, Chiang said. Corporate taxes were down $127.9 million, while sales taxes were up $42.8 million.
California’s cash may be exhausted by March, Chiang reported Jan. 31. The nation’s most populous state will need $3.3 billion by mid-April without additional borrowing and payment delays, because it has spent more and received less than anticipated for the current fiscal year.
“January revenues were disappointing on almost every front,” Chiang said today in a statement. “Thankfully, the decisive actions taken recently by the state to stabilize its cash flow will ensure that California can pay its bills through the end of the fiscal year.”
Treasurer Bill Lockyer plans to obtain as much as $1 billion from Wall Street to ease the shortfall. Lawmakers passed a bill to let the state borrow $865 million from internal accounts to avert a cash shortage.
The drop in income-tax revenue resulted from worse-than- expected estimated payments and higher-than-projected refunds, the release said.
Estimated payments in the fourth quarter were down 13 percent from what was projected, a pattern that has occurred just once in the past two decades, according to Governor Jerry Brown’s budget office.
Taxpayers may make up the difference with final payments in April, the budget office said in a memo.
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