Saturday, April 11, 2015
State Revenue: Still Reliant on the Boom/Bust Tax Sources
Personal Income Tax: Up about 12%
Sales Tax: Up about 4%
Corporate Profits: Up about 30%
All Revenues: Up about 11%
The trend inflation rate is around 2% so the real economy as experienced by most Californians - measured by sales - is growing at a two percent-ish rate. We are still heavily dependent on the boom/bust taxes (personal income and corporate profits) that could easily drop in any downturn. Keep that in mind when you think about the multi-year deal the governor wants on budget and tuition. What would happen in the outyears in such a deal if a downturn occurred? Would the governor be able to keep his end of the bargain?
You can find the cash report at:http://www.sco.ca.gov/Files-ARD/CASH/fy1415_april.pdf