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Department of Finance Reports Lagging Revenues

By Jeff Hudson - October 17, 2008

California’s Department of Finance (DOF) released its monthly cash report for October.  And given the recent news about the economy, it comes as no surprise that the DOF’s report indicates that things are slow – a trend that could have implications for future funding of public education.  Among the DOF’s findings in the Monthly Cash Report:

  • Preliminary General Fund agency cash for October was $923 million below the 2008-09 Budget Act forecast of $10.667 billion.  
  • Personal income tax revenues to the General Fund were $289 million below the month’s forecast of $5.836 billion. 
  • Sales and use tax receipts were $212 million below the month’s forecast of $2.249 billion. This shortfall can be attributed to the weak economy. 
  • Corporation tax revenues were $426 million below the month’s estimate of $2.238 billion. 
  • Revenues from the insurance, estate, alcoholic beverage and tobacco taxes actually went up – rising $32 million above the month’s estimate of $185 million.

In the Economic Update section, the DOF found that:

  • California’s unemployment rate rose to 7.7 percent in August, up from 5.5 percent a year earlier.  
  • Home building slowed considerably in August, with residential permits (including both single-family and multi-family homes) down 56.2 percent from a year earlier.  “Measured over a longer span, new home permitting for the first eight months of 2008 was down 43.8 percent from the same months of 2007, and down 60 percent from the same period of 2006,” the DOF reported. 
  • Non-residential construction was also down in August, but the decline is not as steep as on the residential side.  Non-residential construction permitting was down 21.9 percent in August from a year earlier.  For the first eight months of 2008 as a whole, nonresidential permitting was down 5.5 percent from the same months of 2007. 
  • “In August, California real estate markets basically moved sideways,” the DOF reported.  Home prices were largely unchanged from July, but the August median California home prices of $350,140 reflects a 40.5 percent decline from August 2007.

Editor's Note: Jeff Hudson is the editor of EdBrief and an award-winning education reporter and writer in print, radio and television media.