September 6, 2011

State Budget Trigger Watch III

A new agency has joined trigger watch revenue reporting.  The Legislative Analyst’s Office (LAO) has started reporting personal income tax and corporate tax revenues at the end of each month.  They reported that these two taxes were running slightly ahead of the May Revision estimates, but slightly below the final budget revenue estimates.  Another way of phrasing this is that these two revenue sources had August revenues that were not sufficient to avoid the January future trigger if state revenues continue on the current trajectory.

Because the LAO does not look at sales and use taxes, the third of the big three taxes, their report is not as comprehensive as the State Controller’s report that will be released at the end of this week, or the Department of Finance report that will be released approximately a week later.

The LAO report can be summarized in a good news/bad news fashion.  The good news is state revenues appear to be doing better than the May Revision estimate. The bad news is that they are not doing so much better that they would equal the additional $4.4 billion revenue estimate made at the time the budget was passed.

We will update you after the State Controller releases their August revenue estimates.

~Dave Walrath