Wall Street seems to have had a panic attack yesterday concerning the possibility of a recession. And, indeed, labor market indicators suggest at least a slowing down of the economy, national and state. All of that could be bad news for the state budget. BUT... we have some advance indication that state revvenues are coming in ahead of projections made when the current year's budget was passed.
Jason Sisney of the Legislative Analyst's Office (LAO) writes on his Substack blog:
July 2024 income taxes, inclusive of both personal income and corporation taxes, were $1.26 billion (16.4%) above monthly budget projections based on preliminary data from California state tax collection agencies. July generally is one of the slowest tax collection months of the year in California. Corporation taxes were $844 million (161.8%) above the monthly projections due to an unusually robust receipt day on July 16. As I noted then, such large single collection days can result from payments by a single corporate entity, but information on payments by specific taxpayers is confidential.
Personal income tax payments in July were $418 million (5.8%) above projections. Withholding from workers’ paychecks was basically on target, with the gains resulting from quarterly and other payments...
Full story at https://jasonsisney.substack.com/p/july-income-taxes-16-above-projections.
We should have the state controller's report for July on revenues in a few days for more detail. And, of course, we have to note that one month does not a year make. But it's probably not 1929:
(Yours truly is more worried about whether it's 1939.)
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