November 11, 2009

State Controller Releases October State General Fund Revenues

The State Controller has released his report of October State General Fund revenues.  For the first time in what seems like two years, the revenues were slightly greater than projected.

The state income tax withholding and corporate tax revenues were greater than projected, while sales tax revenues continue to be below projections.  The net effect, however, was for a slightly (approximately $200 million) better than projected revenue for October.  

While one month does not make a trend, the October report gives credence to the belief that the California economy may be bottoming.  This does not mean that revenues should be anticipated to continue to be better than projected, nor does it mean that the state's economy is rebounding. What it does mean is that probably most of the worst economic news is behind us.

The Department of Finance issues their revenue report later this month, most likely before November 23.  The Department of Finance uses a different methodology than the Controller; however, the Department of Finance methodology is the one that counts for the state budget.