California released its August Finance Report today, indicating a $541 million shortfall from the revenue forecast for July. Our Sacramento Bureau Chief, John Myers, offers this report:
Keeping tabs on the inflow of tax revenues is not easy in California. Various assessments are based on cash in the bank, cash in the door but not deposited, and cash that arrives at various agencies. And today's news from the state Department of Finance of the July revenue target being missed by $541 million isn't good news...but may be tempered by the fact that not all cash had been counted in time.
The report shows some sluggish economic trends around the state -- not down, but also not up where everyone hoped. And it amplifies growing concern about the budget signed by Governor Brown on June 30, a budget balanced with an expected $4 billion uptick in revenues.
Should the state miss that mark -- or, more precisely, should new projections this fall show we're going to miss the mark -- the budget includes up to $2.5 billion in additional cuts, from education to public safety. Those cuts, if they happen, will be based on revenue projections made in late fall. The cuts would actually kick in sometime in January. And the Capitol is full of chatter that if that happens, Governor Brown will look for some way to intervene -- possibly even a special session to discuss tax ideas. Of course, 2012 is an election year...which makes talk of taxes that much more controversial.