Saturday, February 6, 2016
Cautionary Note from the LAO
Overall, however, December & January income tax collections came in modestly short of projections, based on preliminary data from the state's tax agencies. In particular, PIT (Personal Income Tax) collections fell short of the administration's revised projections for January, while net receipts of corporation taxes (CT) exceeded the revised projections. For 2015-16 to date, based on this preliminary data, the state's income taxes are a combined $167 million under the revised administration projections...
Economic growth has slowed somewhat, and stock markets languished in late 2015. The lackluster January income tax results seem to reflect these trends. Five months of 2015-16 income tax collections remain, including the key income tax months of April and June. While we continue to think the administration's January revenue estimates are a good starting point for state budget deliberations, the possibility now exists for some revenue deterioration between now and the May Revision. Our biggest concern is that continued stock market weakness could affect PIT taxpayers' first two quarterly estimated payments for 2016 in April and June.
Full report at http://lao.ca.gov/LAOEconTax/Article/Detail/168