Red County, California

Here’s a report that I’ve been waiting for — California’s September 2009 Cash Report from the State Controller John Chiang:

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State Controller John Chiang today released his monthly report covering California’s cash balance, receipts and disbursements in September. For the first three months of the fiscal year, total General Fund revenue was nearly $1.1 billion below the recently amended 2009-10 Budget Act estimates.

“Revenues more than $1 billion under estimates and recent adverse court rulings are dealing a major blow to a budget that is barely 10-weeks old,” said Controller Chiang. “While there are encouraging signs that California’s economy is preparing for a comeback, the recession continues to drag State revenues down. I urge lawmakers and the Governor to prepare for more difficult decisions ahead.”

The State’s three largest sources of revenue fell below estimates for the month of September. When adjusted to account for payments made in September that were previously delayed or issued as Registered Warrants in July and August, personal income tax revenues for the month were $934 million below estimates (-17.3%), corporate taxes were down $183 million (-10.5%), and sales taxes came in $99.8 million lower than expected (-4.5%).

The State started the fiscal year with an $11.9 billion cash deficit in the General Fund, which grew to $16.2 billion by September 30. Those deficits are being covered with a combination of $7.3 billion of internal borrowing from special funds and $8.8 billion in short-term revenue anticipation notes.

See also the September financial statement and the summary analysis.

Every classification of revenue except taxes on insurance companies, inheritance, estates, gifts and “not otherwise classified” came in under estimates.

Heck, vehicle license fees dropped $23.7 million — when push comes to shove, Californians will do without that extra car to make ends meet.

General fund receipts for July through September 2008 were $21.5 billion. For the same period this year, receipts were $19.4 billion, a drop of 9.7%.

Total disbursements over that period in 2008 were $27.5 billion. This year for that period, disbursements were $24 billion, a drop of 12.7%.

With state unemployment at 12.2% and both residential and commercial real estate still staggering, the drop in revenue should come as no surprise.

Grasping for good news, the state controller had this to say in the summary analysis:

Still, the fact that some indicators are stabilizing provides some reasons to be positive about the State’s economy. Compared to 2008, sales and use taxes are up for the second month in a row. Although these are small gains, they signal that the consumer spending is reaching for a bottom. In addition, residential building permits have leveled off in recent months, and home prices, though still below last year, stabilized in June and July. This should decelerate the losses in the State’s construction employment, which has been especially hard hit. There also are indications that the nation’s gross domestic product will grow modestly in the third quarter of 2009. An important question for California is how the expiration of the federal income tax cut and temporary payroll tax cuts will impact the State’s economy in 2010.

This basically says that things aren’t getting worse as fast as formerly. Not getting better, but not getting worse as fast.

It also betrays how much of the state’s well being, independence and sovereignty have been ceded to the federal government.

(Hat tip: Calculated Risk.)