Bloomberg News

California Cash Deficit Widens to $2.5 Billion in First Half

January 11, 2012

(Updates figures starting in first paragraph.)

Jan. 10 (Bloomberg) -- California tax collections since the fiscal year began in July have fallen short of the budget estimate by $2.5 billion, the state controller’s office said.

Revenue fell $1.4 billion below expectations in December alone, Controller John Chiang said in a statement today. The revenue shortfall since the start of the fiscal year had declined to $1 billion by the end of November. Chiang also said that revenue in December came in $165 million below what Governor Jerry Brown projected in his latest spending plan, unveiled Jan. 5.

“While we saw positive numbers in November, December’s totals failed to meet even the latest revenue projections,” Chiang said in a statement. “Coupled with higher spending tied to unrealized cost savings, these latest revenue figures create growing concern that legislative action may be needed in the near future to ensure that the state can meet its payment obligations.”

--Editors: Pete Young, Mark Schoifet

To contact the reporter on this story: Michael B. Marois in Sacramento at mmarois@bloomberg.net

To contact the editor responsible for this story: Mark Tannenbaum at mtannen@bloomberg.net


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