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SAN FRANCISCO — California started off the fiscal year on solid financial footing, beating revenue estimates in the state's Budget Act by 4.5%, according to State Controller John Chiang.
The controller released his
"Even though July is usually a weak revenue collection month, the new fiscal year is off to a strong start," Chiang said. "While the state plans to borrow operating funds through revenue anticipation notes, the $2.8 billion needed solely for smoothing out the timing of revenues is at the lowest level since the 2006-07 fiscal year. If we can continue to reduce short- and long-term debts, we can continue to improve our fiscal condition."
For the first month of fiscal 2015, income tax collections came in at $244.9 million, or 6.4%, above estimates. Corporate taxes topped estimates by $38.1 million, or 13.5%, and sales taxes also beat estimates by $36 million, or 4.1%.
As of July 31, the state's general fund accumulated outstanding loans of $7.9 billion from internal sources, which was $1.5 billion under the budgeted amount.
The state ended the month with unused borrowable resources of $17.8 billion after making $15.4 billion in disbursements. The most significant payments were $6.5 billion to public schools, which included deferrals from the spring addition to the normal July scheduled payments, according to Chiang.
Earlier this month,
"That means the state had funds available to meet all of its payment obligations without needing to borrow from Wall Street or the $23.8 billion available in its more than 700 internal special funds and accounts," Chiang said.
The state still plans to issue revenue anticipation notes next month in its annual cash flow borrowing transaction for fiscal year 2014-15.
The state typically sells RANs each summer to ensure its cash flow positions stays strong during stretches of the fiscal year when the tax revenue stream slows.
At $2.8 billion, this year's RAN transaction will be the smallest on in eight years, according to the state treasurer.
The notes are scheduled to be sold in a competitive bid on Sept. 10.