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View Full Version : July California Tax Revenues Plunge More Than 10% Below Expectations



Ares
9th August 2011, 03:30 PM
Even as the Fed continues to pretend that keeping interest rates at zero for what is now becoming apparent will be an infinite amount of time is an appropriate substitute for the absence for the elimination of actual cash flows, we once again get a reminder that life in the real economy, there were people can not just print their way out of trouble, practical issues such as reality still matter. One such example comes to us by way of California which just announced that state tax revenue plunged in July, falling more than 10% below expectations, and as the LA Times blog says, "making it more likely that deeper cuts to public schools built into the state budget in case of a stalled economic recovery will occur." It adds: "Gov. Jerry Brown and state lawmakers patched up the final $4 billion of California’s budget shortfall this year by hoping for a windfall economic recovery. Those hopes are now fading fast. Tax collections in July were $538.8 million below budget forecasts, according to state Controller John Chiang." And just like the proposed Deficit Reduction Plan will crash and burn courtesy of the completely unknown trillions in yet undisclosed savings, so California is now waking up to a bad hangover after realizing that the deus ex machina in unidentified billions of "revenues" forgot to make an appearance.

Income taxes were up slightly, but sales and corporate collections lagged by a combined nearly $210 million. But the biggest drag was from the unidentified $4 billion that budget writers had banked on.



“Every drop in revenues puts us closer to the drastic trigger cuts that could be imposed next year," Chiang said in a statement. Those automatic cuts include a reduction in schools spending that could shrink the academic year by as many as seven days in some districts.

And unless the Fed can continue to baffle them with bullshit, by declaring that the recession is here, but it is really good for your 401(k), California's troubles are only set to escalate.

Worse, the sagging tax collections were reported before the recent stock market turmoil. The Dow Jones industrial average plunged by more than 600 points on Monday. California relies very heavily on capital gains taxes from the stock taxes.

We are confident California will survive. After all it merely need to tell its taxpayers that courtesy of ZIRP to perpetuity, they all just got much wealthier, and if not, then they should bring their grievances to the Fed Chairman. In the meantime, tax hikes, and spending cuts for the state, which has to have a balanced budget, at least on paper, are imminent.

http://www.zerohedge.com/news/july-california-tax-revenues-plunge-more-10-below-expectations

Twisted Titan
9th August 2011, 09:04 PM
Plenty of money as per the CAFR

ximmy
9th August 2011, 09:56 PM
The very fools who voted in the Brown now realize they do not like the Brown... ::)

Cebu_4_2
9th August 2011, 10:02 PM
620

mick silver
10th August 2011, 08:17 AM
i wish my taxes were 0 . hell i would take some money for 0 . why would anyone think taxing people and companys out of biz would be good

gunDriller
10th August 2011, 02:22 PM
so the parking lot at any Motel 6 in California is a fertile ground for catalytic converter stealers.

what kind of car or truck do they target ?