In an analysis, Chiang said "gains in jobs, incomes, and stock prices have underpinned the rise," while also alluding to higher tax rates on the wealthy that voters approved at Brown's urging in November.
But as the state saw a burst of tax revenue in mid-January, economists and fiscal experts suspected a third factor was largely to blame: a December run-up in capital gains and profit-taking ahead of the so-called federal fiscal cliff. Companies paid more dividends and bonuses in 2012 because of the likelihood that federal leaders would increase taxes on the highest brackets in 2013.
It remains to be seen whether the state's big January will result in lower tax collections than expected this spring and in 2014. The Legislative Analyst's Office has warned policy makers to remain cautious and wait until Brown's May budget update to judge whether the revenue increase is for real.
The state is also spending $1 billion less than Brown projected for the first seven months of the fiscal year, Chiang said.
The one gloomy spot in January was sales tax revenue, which was $582.7 million, or 27 percent, lower than expected. That amount was also lower than January 2012. Chiang did not suggest a reason why, but analysts previously expressed concerns that spending might dip as workers paid higher payroll taxes starting last month.
All told, the state received $15.3 billion in revenues for January.
"Last month's revenues were by far the highest that California has seen in any January for the past decade. Along with increased auto sales, rising home values, and more construction, it signals that California may be entering an era where we can govern outside of crisis," Chiang said in a statement. "However, given our state's troubled history with boom-or-bust revenue cycles, this good news must be tempered with increased fiscal discipline in how we interpret and budget January's collections."
PHOTO CREDIT: John Chiang. Hector Amezcua, Bee file, 2011.