Posted on 10/13/2005 6:28:54 PM PDT by NormsRevenge
SACRAMENTO (AP) - California's budget has received a $1.2 billion boost from unexpected revenue since July 1, the start of the fiscal, according to the state Department of Finance.
Revenue in September alone was $897 million over the projected estimate.
State finance officials said Thursday that most of the unanticipated income probably was due to several one-time factors instead of any surge in the overall California economy.
More than one-third of the unexpected income last month came from a jump in personal income taxes, which rose $376 million above estimates. Analysts said they suspect some of that additional income was the result of payments wealthy Californians are required to make this year under Proposition 63, which imposed a 1 percent tax on net income over $1 million.
Another $524 million came from corporate taxes. Finance officials said they believe that increase is related to new federal rules governing offshore profits. The rules allow large companies to transfer profits from overseas operations back to the U.S. at special low tax rates this year.
Several other tax categories saw mixed results in September.
Officials are looking at the data to determine exactly why tax revenue increased, Finance Department spokesman H.D. Palmer said.
The state probably won't know more until the end of the calendar year and the close of another quarter of tax receipts. Palmer said it's too early to tell how the increased revenue will affect next year's budget, which is projected to have a $6 billion deficit.
Liberals can never figure out why lowering tax rates and cutting back on restrictions actually produces more tax revenue. Ronald Reagan, who they figured was an amiable dunce, did it time after time after time. The liberals still attribute it to dumb luck.
This article resulted because of vague warning from Califronia's financial sector to an AP editor. The warning was triggered because some politicians are beginning to tout anomalous tax increases as proof that California's economy is on a strong rebound.
I imagine the legislature will have found new ways to spend it all by next Monday.
Yes, don't just stand there....get busy spending this money...start some programs "for the children"...GET THIS MONEY SPENT NOW!!!
One-time, i.e. non-recurring. All of which goes to inflating revenues that will be the basis for future expenditures under Prop 76. Not good, imo. I believe the tax amnesty program implemented last year has the same effect.
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