California revenues dropped below projections again in July, pushing the state closer to "drastic trigger cuts" to public education, said controller John Chiang Tuesday.
Chiang reported that tax revenues were $538.8 million—10.3 percent—below projections included in the state budget, which predicated a growth economy.
The budget has built-in “triggers” for cuts if the revenues don’t flow. If the state comes up $2 billion short, it will start cutting school funding, and other services.
Income taxes were above projections by $89 million, or 2.9 percent, in July. But sales taxes fell by 12.5 percent and corporate taxes plummeted 19.3 percent in the same month.
"While July's revenues performed remarkably similar to last year's, they still did not meet the budget's projections," said Chiang. "While we hope for better news in the months ahead, every drop in revenues puts us closer to the drastic trigger cuts that could be imposed next year."
"It was not yet clear where Finance will land on the July share of the [budget's] $4 billion tax windfall assumption," the Bee reports. "He cautioned against assuming the state will pull the trigger on the additional cuts this year."