Wednesday, July 11, 2018

Final State Cash Report for 2017-18

The state controller has released the cash report for the past fiscal year 2017-18. There is good news and bad news. The good news is that revenues were up about $1.5 billion relative to the projections made in June 2017 (when the 2017-18 budget was enacted). The bad news is that the extra money came mainly from the personal income tax (which probably means a big capital gains component) and the corporate tax (profits). Sales tax revenue - which is a proxy for consumption and much of the economic activity of the state came in below budget projections and, indeed, below last year's figure. So the good revenue news was likely from the most volatile component of revenue that can drop off precipitously in any kind of downturn.
Of course, there is no sign of a downturn currently, despite the turmoil about tariffs and such. And the state has access not only to its official general fund reserves - including the governor's rainy day fund - but also to cash sitting in other accounts of the state outside the general fund. So-called unused borrowable reserves are close to $40 billion, which is a significant cushion.
You can find the controller's report at: (Look at the tables on the "B" pages for comparisons with last year's budget projections.)

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