Shocker: California overestimated tax revenues again

posted at 10:56 am on May 4, 2009 by Ed Morrissey

The budget compromise reached in California, for which Governor Arnold Schwarzengger heavily lobbied, made a series of optimistic forecasts about tax revenues that flew in the face of the recession and the effect of California’s tax hikes.  How badly did they miscalculate?  The Golden State has fallen more than $2 billion behind in income tax collections alone, including a $1.8 billion bath in April, which should have been the state’s best month.  And sales taxes are next:

The state may get more bad fiscal news this week when the state controller makes his final tally of April sales taxes. …

April, the state’s largest tax-collection month, has fallen short of expected revenue by more than $1.8 billion in personal and corporate income taxes. The state was $750 million behind projected tax collection on April 1.

There’s good reason to believe April’s sales tax receipts may disappoint, too. New car sales the first three months of this year fell by 43 percent compared with the same period last year, according a report last week by the California New Car Dealers Association.

Auto-related sales tax (car sales, parts, etc.) make up about 20 percent of the state’s sales tax receipts, said Paul Warren, a revenue and taxation analyst for the Legislative Analyst’s Office.

The state has a series of referendums on the ballot to get Californians to increase taxes to make up for these shortfalls.  So far, they’re all looking to fail by wide margins.  Voters have finally reached their limit of tax hikes and spending sprees from a legislature dominated by Democrats for more than four decades.

Schwarzenegger had his opportunity to lead California into a semblance of fiscal sanity.  Instead, he pressured the GOP to cave on tax hikes in a budget compromise that did little to roll back spending, but instead put an even higher tax burden on a state reeling from the recession.  To no one’s surprise except the terminally clueless political class in Sacramento, the tax hikes helped deepen the recession by cutting back on discretionary spending, especially on big-ticket items like cars.

Just a few months after supposedly plugging their budget hole, Schwarzenegger and his fellow Democrats* will have to deal with another gaping hole in the budget.  Will they learn anything from the last round and start redlining the budget to get spending under control?  Not if the last few decades give any indication.  The Governator had little problem beating up Republicans to get a tax hike passed the last time, and I’d be shocked if he didn’t try it again.

* – Schwarzenegger’s a Republican?  No way.

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Comment pages: 1 2 3

LaMonte on May 4, 2009 at 9:45 PM

ROTFLMAO…. Us Californians have been debating the idea of splitting the state into the States of Free Southern California and The Communist Brokedick Union of Northern California.

doriangrey on May 4, 2009 at 10:01 PM

Illegal aliens do not get food stamps, welfare, housing, they get basic medical care and school

EricPWJohnson on May 4, 2009 at 11:35 AM

They most certainly do. What world are you living in?

Ever hear of New York Sanctuary? And if that’s not good enough, try IDENTIFICATION FRAUD!

Geez, they get FREE STUFF in multiple states simply by using multiple addresses and IDs and living in a tri-state area.

Oh, and let’s not forget housing and tons of goodies should they have ANCHOR BABIES. They’re home free on all counts when packin’ a babe.

lilspitfire on May 4, 2009 at 10:08 PM

Refuse to cut spending. Refuse to shut the borders.

Pride stupidity goeth before the fall……

TN Mom on May 4, 2009 at 10:45 PM

ROTFLMAO…. Us Californians have been debating the idea of splitting the state into the States of Free Southern California and The Communist Brokedick Union of Northern California.

doriangrey on May 4, 2009 at 10:01 PM

Hey, don’t lump me in with those lunatics in San Fran. If it were up to me I’d erect a fifty-foot high fence around the city and see how long it takes for their little socialist paradise to implode.

You want a two-state solution, split it down the I-5 so solidly conservative Eastern California can escape the financial disaster. Then open up the border at Calexico so the Democrat base on the coast cities can lovingly embrace the illegals streaming in from Baja to get their free government bennies.

TheMightyMonarch on May 4, 2009 at 11:19 PM

Isn’t Arnold one of those Progressive Republicans that we are supposed to turn into? Yeah, he can show the GOP the path back to the WH…

Upstater85 on May 4, 2009 at 11:48 PM

TN Mom on May 4, 2009 at 10:45 PM

With the D’s: Pride = Stupidity

Same thing

Upstater85 on May 4, 2009 at 11:49 PM

SO is DisneyLand still crowded???

I have been there a few times and was amazed how

expensive & crowded it was. Kinda like a microcosm of

Kalifornia itself.

Let me know when you all go bankrupt. Maybe we can

go back to Disneyland when it costs ten bucks to get in!! LOL

izoneguy on May 5, 2009 at 12:14 AM

SO is DisneyLand still crowded???

I have been there a few times and was amazed how

expensive & crowded it was. Kinda like a microcosm of

Kalifornia itself.

Let me know when you all go bankrupt. Maybe we can

go back to Disneyland when it costs ten bucks to get in!! LOL

izoneguy on May 5, 2009 at 12:14 AM

I was thinking that since we bailed out California, Obama could become the CEO of that state (i.e. the govahnator) and then offer all American Tax Payers a paid vacation (literally) to DisneyLand…

Upstater85 on May 5, 2009 at 12:26 AM

I’d have loosened my purse strings long ago, but I don’t know how much of my income is going to be bled out here in lala land by the various Governments.

Obama Franks Waters LLC — destroyers of the nation’s economy.

unclesmrgol on May 5, 2009 at 12:32 AM

ROTFLMAO…. Us Californians have been debating the idea of splitting the state into the States of Free Southern California and The Communist Brokedick Union of Northern California.

doriangrey on May 4, 2009 at 10:01 PM

Don’t exclude Los Angeles County, where all of the Leftist Hollywood freaks live.

Don’t include Ventura County with the nutbag leftists, the Reagan Library is here as are Point Magu N.A.S. and Port Hueneme N.C.B.C. Lois Capps is the U.S. House ONLY because Democrats gerrymandered a 200 mile long district for Capps that includes San Freako wannabe Santa Barbara.

nelsonknows on May 5, 2009 at 12:40 AM

EricPWJohnson on May 4, 2009 at 11:35 AM

Have you even BEEN to Commiefornia?
Illegals VOTE in Commiefornia, they buy GUNS in Commiefornia, they open BANK ACCOUNTS in Commieforia and they do this all with only a matricula card that ANY illegal alien can obtain at a Mexican Consulate.
let me fill YOU in on what goes on in Commiefornia, since I LIVE HERE.

Illegals open bank accounts with matricula cards, U.S. citizens are required to have THREE valid forms of I.D. to open bank acconts.
It’s LEGAL for a NON citizen to buy a firearm in Commiefornia but AMERICAN CITIZENS, without perminant resident status CANNOT buy a firearm.

Let me fill you in on what Contractors in the building industry go through….We have our work sites invaded, our work destroyed, our vehicles destroyed, our materials and tools either destroyed or stolen and our employees threatened…ALL BY ILLEGAL ALIENS that ILLEGALLY own their own contracting businesses. It’s pretty pathetic when a contractor has to sit all night on his work site, with a shotgun, to keep illegals from destroying his work.

If you actually think illegals can’t get EVERY service a U.S. citizen gets in Commiefornia, and MORE, you need to back away from the crack pipe.

nelsonknows on May 5, 2009 at 1:06 AM

And more businesses leave Ca-lee-forn-ee-ah. More talented producers and entreprenuers pack up and leave. Thus leaving the state to M13 gang members and the brain dead.

kens on May 5, 2009 at 2:07 PM

Comment pages: 1 2 3