State Revenues Continue Downward Trend

State revenues for September came in much lower than projected, driving the state deeper in debt and leaving school districts still playing the waiting game.

California revenues fell $301.6 million below projections, according to John Chiang, State Controller.

"September's revenues alone do not guarantee that triggers will be pulled. But as the largest revenue month before December, these numbers do not paint a hopeful picture," Chiang said in a statement.  

Total year-to-date revenue shortfalls top over $700 million.

Corporate tax revenue came in $190.3 million lower then expected, while sales tax revenues were short by nearly $57 million. Personal income taxes were above estimates by a mere 7 percent at $285.4 million.

This latest forecast is a little nerve-racking, according to Melvin Iizuka, director of business advisory services for the Los Angeles County Office of Education, but there is more to it.

“The Controller’s information is based upon cash receipts,” Iizuka said, adding that the forecasts are based on how much cash is on hand at the time.

Iizuka said the Department of Finance has a more comprehensive analysis that looks at anticipated cash influxes, but also shows revenues still below estimates.

According to the Department of Finance, right now if revenue levels are to reach their intended levels, those increases would be reflected in higher personal income tax and corporation estimated tax payments. These payments would be made in December of this year through June 2012.

“Even though we’re running under now, it’s possible there still could be additional revenue coming in … when the state makes a forecast in December,” Iizuka said.

State education has taken hit after hit since the state and national economies have faltered in recent years.

This year, state education received virtually flat funding compared to last year at just over $43 billion, roughly $717 million less then in 2010-2011. Education funding was slashed by about $736 million a year ago from the 2009-2010 year.

In May, Glendora Unified rescinded after Gov. Brown’s May revise showed a slightly more positive outlook.

The budget deal passed in June contained Mid-Year Triggers that would automatically cut education funding if revenue fell below two benchmarks.

Tier 1 reductions would cut funding at the community college and university levels if revenues fall by $1 billion.

In the face of diminishing revenue, Tom Torlakson, State Superintendent of Public Instruction, has been a very vocal supporter of President Obama’s American Jobs Act.

The plan would aid California’s schools by providing federal funding for school modernization and repair, to the tune of $2.8 billion, while also providing nearly $4 billion to prevent future teacher layoffs and reinstate those who have already received a pink slip.

"We've already seen 30,000 teachers lose their jobs over the last four years," Torlakson said in a statement last week. "What started as a financial emergency for our schools has become a crisis in our classrooms, and we dare not wait any longer to address it."

The date when the state learns if massive cuts to education are needed is Dec. 15.