State Budget Update

The chart title from the latest state controller’s cash report is fine.  But the bars may be confusing.  The first bar on the left tells you that revenue fell short of the budget forecast in July by $306.4 million.  July is the first month of the fiscal year.  The middle bar, although labeled August, actually is the July-August combination.  And the September bar is the result for the first quarter of the fiscal year, July+August+September.  It tells you that that despite an initial lag in revenues, the first quarter came in more or less as forecast.

There is a bit more to be said, however.  The governor insisted on using a “conservative” forecast of revenue, although the legislature and Legislative Analyst thought a more optimistic forecast was warranted.  So far, the governor seems to be correct.