Friday, October 10, 2008

California Shortfall


⇒ Compared to September 2007, General Fund revenue in
September 2008 was down by $465 million (-4.4%).
Corporate taxes were below estimate by $485 million
(-21.0%), and personal income taxes were below last
September by $26 million (-0.5%). Sales taxes were $71.7
million greater (3.5%) than last year. The total for the three
largest taxes was below 2007 levels by $440 million (-4.4%).

The PDF report is here.
Biggest takeawy in my opinion:
"⇒ Quarterly estimated corporate taxes in
September were extremely weak, 26%
below last September."

As predicted here it took two weeks to break the budget agreement. Expect some weekend emergency meetings in Sacramento.

17 comments:

Lost Cause said...

First let me tell you I saw this coming.

Rob Dawg said...

Much as people hate it. As goes California, so goes the nation.

Update: LEH settlements 8.625¢ ouch.

Peripheral Visionary said...

Wow, that's terrible. Corporate taxes off by more than 20%? The state is being held up by consumer spending going into straight into the teeth of a consumer credit crunch? This does not bode well.

And with all due respect to the host of this blog, if the State of Failed Floppers™ gets even $2,759 in Federal money from the bailout plan, I will be voting against every incumbent in sight.

Rob Dawg said...

PV,
I must confess. I will be voting for an incumbent this year. My Congresscritter is Elton Gallegly who is not only the only non-lawyer on the judiciary but also voted against the bailout.

California is going to hit a wall of epic proportions in March/April when they have to pay back all those overwithheld income taxes.

I told everyone that things were going to far worse than the most extreme worst case projections. Next up is a real killer. Collections. Collections of every type are about to dry up. Incremental tax schedules, EDD contributions, quarterly payments filed but no check enclosed, disappearing taxpayers, on and on. They won't admit it but one reason California wanted a Fed loan is because they know the Feds will roll it over whereas the private lenders will drive the price into the stratosphere.

Rob Dawg said...

California's school business officials are warning districts that the governor's office is preparing a list of up to $3 billion in budget cuts and to brace for "the worst."
... new projections show that the state will take in $3 billion less this fiscal year than expected in the state budget Schwarzenegger signed about two weeks ago.


Sacbee: http://www.sacbee.com/1089/story/1304254.html

wagga said...

DJIA is like a tug-o-war between smart people & dumb people.

It was up more than 300 several minutes ago. Now it's -150.

Which side is which?

Pleather Murse said...

Wow, up 300 cool ... no wait up 25 oh well ... no, now it's down 15 .... down 57 damn .... up 30 thank gawd ... no wait down 4 ... gaaaargh!

Property Flopper said...

OK - Now that has to go down as one of the more interesting days for the DOW. Plunging 700 points, then positive, then down 700 again, then in flux until a strange, late rally.

Bizzzzzare.

Rob Dawg said...

At 11:11 AM, Rob Dawg said...
Won't drop that much. Should but won't. 8340?

Damn, I was soooo wrong. ;-)

Okay, this is the new ledge. We'll stumble around for a bit and then fall off to a new lower level. 8000? Maybe. 7800? possible. 7000 (Roubini)? Not impossible. 7k is also one of those TA numbers of 50% and Elliot and crap. Notice how the dead cat bounce lifted all stocks but only a few held on? Hmmm.

Casey Serin said...

Too bad no one's forcing me to pay back all the money I've defrauded... at this point, there'd be enough to keep California in the black for the next 25 years. ;-)

Lab Dog™ said...

I'm voting absentee. Any thoughts on CA Prop 5 - Rehab Instead of Prison for Nonviolent Drug Crimes...?

chickenlittle said...

Mr. Dawg:

I'll be voting for an incumbent too, Darrell Issa of the 49th CA district, who also nayed the bailout.

I've been looking for polling data for the congressional races. RCP is pretty spotty. Got links?

Lab Dog™ said...

This latest Caseypedia addition cracked me up: Walrusism™
The name of this disease is derived from Rob's nickname and from the fact that he was the first and arguably most masterful practitioner of the symptomatic manner of communication. Rob often peppered his blog posts at Exurbannation with obscure photo combinations designed to convey hidden meaning that often didn't really exist. He then milked the discussion of these hints for hundreds of blog posts over the course of several days or weeks. Rob's "secret," when one existed at all, usually could have been conveyed with a single simple statement.

Pleather Murse said...

I love it that Ahhnold is asking the Feds for an $8 billion loan, meanwhile an SF judge is ordering the state to pay exactly that much to upgrade its prison medical facilities so all California inmates can have top notch medical care.

Son of Brock Landers said...

Dawg

I jumped in yesterday (around noon) in a bunch of beaten down names. The rate of decline this month cannot continue. I've been waiting for this opportunity for years.

Rob Dawg said...

I'm waiting for capitulation by the G7. They are talking about a market holiday in all seriousness. When they either try and fail or decide to not try, that will be my signal. You are so correct about the rate of decline. It isn't the rate that worries me, it is the unwinding of positions. IMO we are still competing against funny money with our real money. That worries me.

Tyrone said...

Dumped my CA Tax-Free Muni fund. CA is toast.