Last Cash Before Revise

The governor will present his May Revise budget proposal later today. As noted in a prior blog posting, yours truly will be on an airplane at the time so any analysis of the proposal will be delayed. However, we do have the state controller's cash report through April, the big month for income tax receipts. And the story of above-forecast revenues continued.

Revenues for the current fiscal year through April, i.e., through the first ten months, were $12.1 billion above what the governor projected in January, and $23.7 billion above what was projected at the start of the fiscal year.

The major contributor to both excesses over projections was the personal income tax, so stock market gains. Both projections got the sales tax about right, so the underlying economy was performing about at levels estimated.

Finally, the state is sitting on $87 billion in unused borrowable resources, so there is lots of internal liquidity.

We'll see how the governor and legislature react to these developments shortly.

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The state controller's report through April is at:

https://www.sco.ca.gov/Files-ARD/CASH/April2026StatementofGeneralFundCashReceiptsandDisbursements.pdf.

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Note: There is one dark spot with regard to revenue and that is from the cap-and-trade program that provides revenue for various programs, notably the high-speed rail. Revenues from cap-and-trade are falling below projections. The rail project is proving embarrassing for the governor's non-campaign for president and threats to revenues for it don't help. See:

https://lao.ca.gov/handouts/resources/2026/Amendments-to-Cap-and-Invest-050626.pdf.