Governor Brown has announced he will release the May Revision to his January budget proposal on Thursday of this week, several days in advance of the Monday, May 15 deadline. The May Revise serves at the Administration’s updated budget plan and reflects the latest revenue information. It sets the stage for the next month of budget negotiations with the Legislature, which must pass a budget by June 15. 

According to preliminary data provided by the Legislative Analyst’s Office (LAO), April income tax revenues are not as robust as hoped. Although the month started out strong, the last ten collection days fell flat of expectations, eroding a significant portion of the $1.15 billion year-to-date revenue gain reported by Department of Finance at the beginning of April.

As depicted in the chart below, income tax revenues unfortunately tapered off after a significant surge in mid-April. One explanation for the drop-off in revenues is increased processing systems put in place by the Franchise Tax Board, the agency responsible for collecting state personal income taxes in California.