Saturday, April 11, 2009

California State Revenue Data: March 2009

Another month, another drop in tax revenue for California. Here's the latest from the State Controller (pdf):

The State’s revenues continued to deteriorate in March. Total General Fund receipts were down $178 million (-5.2%) from the latest estimates found in the 2009-10 Budget Act... Compared to this date in March 2008, revenue receipts are down by $5.4 billion (-8.6%)... Year-to-date collections for the three major taxes were down $6.1 billion (-10.2%) from last year at this time. Retail sales were down $2.1 billion (-10.8%), personal income taxes fell by $3.5 billion (10.5%), and corporate taxes were $472 million lower (-7.3%) than last year’s total at the end of March.

Beginning last month, the controller adopted some of the positive spin that seems to be prevalent in government projections these days. Clearly, by all actual measures, the state finances are in terrible straights. Not only that, revenues are declining even faster than the latest estimates made only two months ago! Despite that, the controller sees "light on the horizon." Here's an excerpt from the newly added "What The Numbers Tell Us" infobox in the press release, used to "help" the media interpret the data:
There is no doubt that this is going to be a rough couple of years as the State's economy heals from this downturn. However, unlike the early 1990s when the State suffered from a five-year contraction, California is in good position to rebound strongly after this recession.

California is the largest single source of manufactured exports in the United States. One necessary long-run change expected to follow this downturn is a drop in the value of the $US in order to promote exports and reduce domestic demand for imports – the result of America turning back to saving. This export boom will likely stimulate the State's manufacturing industries and also spur the economy forward.

The negative effects of the real estate decline have been apparent, but lower home prices will eventually allow state businesses to become competitive once again – enabling younger families to build their lives here rather than in cheaper locations. While there are too many homes in many parts of the United States, this is not true in California, and the Golden State can expect its home construction market to get off the ground faster than in places like Florida, Arizona, or Nevada.
Can anyone explain what that last paragraph even means? We are in far worse shape than we imagine if even the controller's office is resorting to banal corporatespeak to spin away bad news.

3 comments :

patient renter said...

While there are too many homes in many parts of the United States, this is not true in California

It's just pure delusional BS. But I suppose they're resorting to this sort of corporatespeak because it works.

Max said...

It's just pure delusional BS. But I suppose they're resorting to this sort of corporatespeak because it works.

"Works" by deflecting attention from the problem. The CA government doesn't have the luxury of money printing like the Feds do. Eventually they'll have to cut spending.

What's silly is, most people understand that, and they're willing to accept reduced services. Government workers are even willing to accept pay cuts. It's the legislators themselves that are delusional.

Deflationary Jane said...

Well there are less expensive homes for young families now in places like Michigan and just as soon as companies move there..... yada yada yada.

Jobs have to come first, kind of hard to get around that.