Thursday, March 11, 2010

California Revenue Jumps, Tax Refunds Should Be Paid on Time

Last year, my home state of California had to delay refunds to taxpayers because of budget problems, and many have been worried that the same would happen again this year. However, State Controller John Chiang has put everyone’s worries to rest by announcing that the state’s revenue is higher than what the governor had predicted and that there would be no reason to withhold taxpayers’ refunds.

According to this Reuters article, California's revenue in February was $480 million or 8.7 percent above the estimate in Governor Arnold Schwarzenegger's state budget plan.

There had been some talk in the state capital of Sacramento that tax refunds could be delayed, as they were temporarily last year, to help the state government preserve cash while Schwarzenegger and lawmakers tackle closing a state budget gap of $20 billion.

The state's cash position, however, is better than expected, according to Chiang's office.

"Revenues came in above projections for the third month in a row, continuing a positive trend that shows California is on the road to recovering from the recession," Chiang said in a statement.

"Given February's numbers and recent action from the Legislature to improve the state's cash flow, Californians should expect to receive their hard-earned tax refunds on time," Chiang added.

The controller, as he routinely does, urged a speedy budget agreement that balances the state government's books, something that Wall Street rating agencies, which have the state's credit rating just a few notches above "junk" status, would also like to see.

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