When state Controller John Chiang reported this month that state sales taxes in July were a third lower than the state budget projection for the month, it created a stir in political and financial circles.
July was the first month of the 2012-13 fiscal year and some analysts wondered whether the controller's report meant that the budget's full year revenue projections were much too high, and deficits were in the offing.
Not to worry, says George Runner, a member of the state Board of Equalization, which collects sales taxes. "Contrary to what you may have heard, the sky is not falling in California--at least not as it pertains to sales tax revenue," Runner said in a statement Friday. "I'm pleased to report that sales and use tax revenues are doing just fine."
Instead of being $295 million below projections in July, Runner said, sales taxes - $1.527 billion - were actually $17 million above Department of Finance expectations.
Why the big difference? Differing accounting method in different financial agencies, which has become a bugaboo of late in determining fund balances throughout state government and contributed to a scandal over hidden funds in the Department of Parks and Recreation.
Runner said the controller counts only "money in the bank" while the Board of Equalization's data also include pending deposits. He said the BOE received more than $900 million in sales taxes during the final days of July which were not deposited in the state treasury by the end of the month.