California Financial Report for February

The State Controller’s office has released the February financial report for the California General Fund. Eight months into the fiscal year (2014-15), total receipts were up by 10.6% to $68.1 billion compared with the same period last year. Total disbursements ($81.8 billion) increased by 11.8% over the same period, exceeding cash receipts by $13.8 billion. As of February 28, the state’s cash balance stood at -$11.9 billion.

Total revenues (receipts from taxes, licenses, fees or investment earnings) were up by 11.0% to $66.3 billion compared with the first eight months of the previous fiscal year. Most of California’s general fund revenues come from personal income taxes, retail sales and use taxes, and corporate income taxes, collectively known as the “big three”.

• In February (fiscal year-to-date), personal income taxes increased by 12.2% to $44.7 billion, beating expectations by 1.3% or $558.2 million.

• Corporate income taxes rose by 41.1% to $4.0 billion, running ahead of expectations by 1.9%.

• Revenue from sales and use taxes was up by 4.5% to $15.3 billion, surpassing projections by 2.3% or $342.4 million. The February figure also included a one-time adjustment of $343.3 million for an under-allocation of sales and use tax due to local government in prior fiscal years.

The schedule of cash disbursements in the Controller’s report showed that expenditures on Local K-12 Education were $30.3 billion during the first eight months of the fiscal year, which was up by 3.6% compared with the previous year. Disbursements to Community Colleges increased by 6.8% to $3.4 billion. Funds received by the UC and CSU systems rose by 12.0% to $4.1 billion. Contributions to CalSTRS (the state teachers’ pension fund) increased by 11.3% to $969 million.

Spending for the Department of Corrections rose by 11.1% to $6.5 billion, while outlays for Health and Human Services increased by 3.6% to $1.6 billion. The amount the state paid to service its debt obligations jumped by 16.3% to $2.5 billion (debt service amounts are net of offsets such as federal subsidies and reimbursements from other services).

So far this fiscal year, General Fund revenues are running 1.6% (or $1.0 billion) ahead of projections. Disbursements were also slightly higher than expected – 0.4% more than forecast by the Department of Finance or $300.2 million.

As of February 28, the General Fund had $29.9 billion in borrowable resources against $11.9 billion in outstanding loans (5.3% less than projected at this point in the budget cycle). The loan balance is comprised of $9.1 billion in internal borrowing and $2.8 billion of external borrowing in the form of revenue anticipation notes, which will be repaid by the end of the fiscal year. 

Sources:  http://www.sco.ca.gov/eo_pressrel.html