California still lacks a 2010-11 state budget but its deficit is already widening as revenue falls below official forecasts and spending runs above expectations, Controller John Chiang said today.
Revenues in July, the first month of the fiscal year, were $91 million or 1.9 percent below the pending budget's forecast, Chiang said, while spending ran nearly a billion dollars over the forecast.
"While July's numbers do not radically change our cash position, the failure to pass a timely budget remains the biggest threat to California's finances," said Chiang. "I urge the Governor and Legislature to show leadership by immediately addressing the potential cash crisis."
Chiang added that unless the Capitol's budget stalemate ends soon, he will begin issuing IOUs, technically called "registered warrants," to pay some bills in late August or early September. An enacted budget would allow the state to seek short-term cash flow loans from commercial lenders.
Personal income tax revenues were $210 million (6.6 percent) below estimates while corporate taxes were up $86 million (37.4 percent), and sales taxes came in $69 million (6.6 percent) above estimates.
The full monthly cash flow report can be found here.