State Budget

Now that the governor has released his May Revise, the blowback is continuing to take shape as impacted parties, including counties, grapple with how the budget will create reductions in programs and services across the state. CSAC has applauded the fact that the revision sustains funding for realignment, which remains a key issue for counties. It is projected that sales tax revenue and Vehicle License Fee (VLF) revenues allocated for realignment will grow from $5.8 billion in FY 2012-12 to $6.8 billion in FY 2014-15.

The state continues to fall behind in revenues, according to the State Controller’s latest financial report. Monthly revenues came in $2.44 billion below (-20.2 percent) the latest projections contained in the Governor's proposed 2012-13 Budget. So what in particular led to April’s shortfall? Personal income tax receipts were a big factor because they came in $1.96 billion below (-21.5 percent) projections; in addition, sales taxes were also down by $445.8 million (-54.4 percent).

At the end of March, the governor announced that he had signed a new Indian gambling compact with the Federated Indians of Graton Rancheria so that a new casino could be developed in Sonoma County. If it moves forward, the 3,000-slot-machine project would quickly become the county’s largest employer, but its impact would go beyond job creation and thus the compact calls for the tribe to go to great lengths to mitigate the impacts of the casino’s presence in the region when it comes to traffic, public safety, and the environment.

An optimistic view for the months ahead will be necessary after State Controller John Chiang announced this week that the state’s monthly revenues still missed the mark when it came to meeting the estimates contained in the Governor's proposed 2012-13 Budget. Overall, revenues fell $233.5 million below (-4.2 percent) projections. Corporate tax receipts in particular were sluggish, as they came in $125.8 million below (-8.2 percent) estimates. Personal income taxes were down also $41.4 million (-1.8 percent), as were sales taxes (fell short by $25.7 million or -1.7 percent).

Thanks to various funding arrangements and the efforts of many local government officials and communities across California, the state’s Department of Parks and Recreation recently announced it is optimistic many state parks that were slated for closure this summer will in fact remain open due to potential rescue plans that will keep parks operating. Out of those 70 parks, arrangements have already been made with federal and local government agencies to ensure that 11 will stay open and state parks officials say that negotiations are under way to rescue about 40 other parks on the list.