April Revenues Down, May Revision Anxiety Up
By Paul McIntosh, Executive Director
pmcintosh@counties.org
Alas, an April surprise was not to be. Earlier this year, state legislators and budget watchers had high hopes that a positive revenue trend would soften the budget blow of the May Revision, but April personal income tax and corporate tax revenues unexpectedly plummeted an estimated 30%, leaving the state with an additional budget shortfall of about $3 billion.
The State Controller’s Office reports that the cause of the precipitous revenue decline was in both estimated and miscellaneous tax payments. Because small business owners continue to struggle, they are making estimated tax payments based on their expected tax burden for the year, which they anticipate to be static. The same is true for corporations. According to the Franchise Tax Board, both estimated payments and miscellaneous taxes were down by 6% and 10%, respectively over last year. While personal income taxes were down overall, California saw a 4.2% increase in withholdings on personal income over last year. Also, refunds on personal income taxes were 14.2% below last year.
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Governor's Timing Puts Five Counties in a Bind
Last week, Governor Schwarzenegger called a special election to fill the state senate seat vacated by new Lt. Governor Abel Maldonado. Though he could have called the election for the day in November that voters will already be going to the polls, he instead timed it such that the primary will take place just two weeks after the regularly scheduled June primary, followed by a final vote in August.
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Administration of Justice
The Senate budget subcommittee No. 4 with jurisdiction over court and corrections issues, among others, heard a presentation on May 6 by the Judicial Council and CSAC on several jointly proposed matters.
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Agriculture and Natural Resources
AB 2139, by Assembly Member Wes Chesbro, would establish an extended producer responsibility framework for certain toxic products, with the goal of creating effective producer-lead reduction, reuse, and recycling programs to deal with a product’s lifecycle impacts from design through end of life management.
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Employee Relations
This week, several bills of importance to counties were heard in the Assembly Appropriations Committee and placed on the Suspense File.
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Government Finance and Operations
SB 994, by Senator Curren Price, would declare that the state will pay for the cost of elections held to fill vacancies in Congress and the California Legislature.
[FULL STORY]
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Health and Human Services
Assembly Budget Subcommittee No. 1 heard a number of issues this week in two separate hearings.
[FULL STORY]
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Housing, Land Use and Transportation
AB 1865, be Assembly Member Audra Strickland, would reduce the amount of matching grant funds an applicant for a newly formed local housing trust fund must raise from a minimum of $1 million to $500,000.
[FULL STORY]
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