Copyright© 1999 by School Services of California, Inc.
State Tax Revenues Up Sharply
State revenues for the first three months of the 1999-00 fiscal year are a whopping $500 million above budget projections. In fact, state tax receipts are running $602 million above budget estimates, while non-tax revenues are down by $105 million due to temporary cash-flow factors that will be corrected in the coming months.
While the state's good fortune does not automatically translate into additional funding for K-14 education under the Proposition 98 formulas, this is still good news for several reasons. First, if the state ends 1999-00 with a large ending balance, the state may appropriate some of that money as one-time funding for schools. Second, higher state revenues increase the possibility of the state providing more than the Proposition 98 minimum again in 2000-01.
The Legislative Analyst's Office (LAO), which reported the state tax figures, does caution that future events like higher inflation or a decline in the stock market could result in slower economic growth in the future. But the LAO's expectation is that "the strong current revenue trends suggest that revenues in 1999-00 will exceed the budget estimate, potentially by a substantial margin."
-- Paul Goldfinger