LOS ANGELES — Just four days after taking the oath of office, California Gov. Gavin Newsom unveiled a record-setting $209 billion budget for fiscal 2019-20.
volatile tax collections due to its heavy reliance on the wealthy. The top 1 percent of personal income tax earners — roughly 164,000 tax returns — generate about half of the personal income taxes in California.
A large chunk of the income from the wealthy comes from capital gains and stock options from companies in tech and other industries, meaning that even small changes in the financial markets can cause big swings either way in terms of the state’s collected revenues.
Separately, state Controller Betty Yee on Thursday announced that December revenues for the state fell $4.82 billion short of projections. The dip in December follows the sharp drop in the stock market last year but the controller said the shortfall in revenue “could be partly due to lags in taxpayer filings at the end of the tax year as a result of federal tax deduction changes.”
California’s revenues for the current 2018-19 fiscal year, meantime, are running 4.4 percent below expectations, according to the controller.
“With our economy continuing to hover on the brink of a downturn, I applaud Governor Newsom’s budget planning with an eye toward building a strong foundation of long-term cost savings and fiscal discipline,” the controller said in a release. Among other things, she cited Newsom’s proposals to cut the state’s pension liability and also added that the “rainy day savings will pay dividends.”