By Adam Beam at KCRA 3
November 17, 2021
California will have a $31 billion budget surplus next year as revenues continue to climb despite the pandemic, according to a new forecast from the state’s independent Legislative Analyst’s Office.
The predicted surplus is so large the office estimates California will surge past a constitutional limit on state spending by more than $14 billion. That could require Gov. Gavin Newsom and state lawmakers to either cut taxes, spend more money on schools and infrastructure or — perhaps the more popular choice in an election year — give rebates to taxpayers.
California’s tax collections have continued to soar despite the pandemic. From April through June of this year, California businesses reported a record-high $216.8 billion in taxable sales — a 38.8% increase over the same period in 2020 and a 17.4% increase over those months in pre-pandemic 2019. Nick Maduros, director of the California Department of Tax and Fee Administration, said it is “a sign that business owners found creative ways to adapt during a difficult year.”
California’s “budget year” runs from July 1 to June 30. During the first three months of this budget year, California tax collections are more than $10 billion ahead of projections. The LAO predicts that by June of 2022, California will have collected $28 billion more in taxes and transfers than they had expected.
Read more at KCRA 3