SAN FRANCISCO May 8 (Reuters) – California collected $ 15.03 billion in revenue in April, putting the state’s fiscal year to date revenue at $ 4.6 billion above the estimates in Governor Jerry Brown’s initial budget plan, the state controller’s office said on Wednesday.
Overall revenue in April missed the budget estimate by $ 119.9 million, but was up $ 5.4 billion from the same month a year earlier – an increase of 55.9 percent – propelled by rising incomes and consumer spending, the controller’s office said in a report.
“On balance, California’s fiscal health has improved materially and the state is beginning to turn the corner,” it said.
The report came a week ahead of Brown’s expected release of his revised budget plan for the state’s fiscal year beginning in July. The new plan will incorporate the latest revenue information.
In his initial plan, Brown projected deficit-prone California’s budget could swing to surpluses as the economy improves and if lawmakers support his efforts to restrain spending.
State and independent budget analysts have also been expecting the most populous U.S. state’s revenue to improve after voters in November approved a measure pushed by Brown to raise the state’s sales tax and personal income tax rates, retroactive to last year, on wealthy taxpayers.
Additionally, federal income tax changes that went into effect in January may have spurred many California taxpayers to sell investments last year. Meanwhile, the rising stock market may also be propelling capital gains revenue for the state.
Personal income taxes are California’s most important source of revenue and the state has historically relied on its wealthy taxpayers to provide the lion’s share of those taxes.
Following Brown’s initial budget plan, Standard & Poor’s upgraded its rating on $ 73.1 billion of California’s general obligation bonds by one notch to A from A-minus.
The rating actions in part reflected California’s improving finances and projected balanced budgets.
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UPDATE 2-California revenue surges ahead of revised budget plan
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