Cashing out fiscal year 2022-23

The state controller came out with her final monthly cash statement for fiscal year 2022-23. Sadly, the state does not public any kind of reconciliation between the cash statements and the accrual accounting that underlies the state budget the legislature sees and enacts. But we can discern some information from the summary table we have put together below.

https://sco.ca.gov/Files-ARD/CASH/June2023StatementofGeneralFundCashReceiptsandDisbursements.pdf

The first thing to notice is that while there isn't much difference between the estimates made at the time of the May Revise and the final numbers - not a surprise given the timing - there is a lot of difference between estimates made when the budget was enacted and what actually occurred.

The most dramatic discrepancy between what actually happened and the original plan involved state revenue which was originally much overestimated. Instead of $219 billion, revenue came in at $167 billion. Much of the revenue gap occurred in the personal income tax, suggesting capital gains from financial markets dropped off for the top income tax payers. 

Still unused borrowable resources ended the year at $98 billion, a very large cushion that meant that the state did not have to go into outside markets to borrow to cover short-term seasonal variations in revenues and expenditures.

Spending was also overestimated. Taking it close to home, UC was planned to receive $5.2 billion but actually got $4.6 billion. We can't tell from the cash statement what caused the discrepancy between planned and actual funding for UC.

A reminder that there are various reserve accounts connected to the general fund. So, the large deficit in the general fund is not the whole story since money was moving in and out of those reserves.

The state has not yet posted its initial (accrual) budget tables for the current year or for fiscal 2022-23.