Lots of cash now but maybe not in the future - Part 3

We continue to note the seeming paradox of more state cash coming in than projected and yet a budget squeeze. From Jason Sisney of the LAO:

May Income Taxes Beat Forecast. Preliminary data from the state’s tax agencies show that May 2025 personal and corporate income tax revenues beat the May Revision projections for that month by $700 million (8.0%), with $602 million of the gain resulting from better-than-projected final, extension, and quarterly estimated personal income tax (PIT) receipts. The remainder resulted largely from lower-than-projected corporation tax (CT) refunds.

Withholding Growth Has Been Moderating. As the Legislative Analyst’s Office recently noted, the “winter uptick in PIT withholding growth has moderated.” PIT withholding was up $271 million (3.3%) from last May, but fell just short of the May Revision estimates for the month of May 2025...

Full story at https://jasonsisney.substack.com/p/may-income-taxes-beat-projections.

We'll get the latest cash receipts information from the state controller later this week.