SACRAMENTO, Calif. – California State Controller Malia M. Cohen released her monthly cash report on Monday, sharing insights into the state’s financial standing for the fiscal year through October 31.
The report highlighted that revenues continue to trend higher than projections.
Controller Cohen’s report indicated that receipts for the fiscal year exceeded the estimates in the 2025-26 Budget Act by $6.5 billion, or 9.7 percent. However, expenditures also surpassed budget estimates by $3.4 billion, or 3.9 percent.
“I remain cautiously optimistic about California’s fiscal outlook, as revenues continue to trend above projections,” Cohen said. She emphasized the importance of maintaining strong reserves and limiting reliance on budgetary borrowing to ensure flexibility in protecting vital services if revenues decline.
The report showed that personal income tax receipts were $5.9 billion above projections, or 15 percent. However, corporation tax collections fell short by $164.9 million, or 2.4 percent, and retail sales and use tax receipts were $51.1 million below budget projections, or 0.5 percent.
Cohen, who also chairs the Franchise Tax Board, noted the extension of the tax deadline for certain Los Angeles County residents and businesses affected by fires in January 2025. These taxpayers had until October 15, 2025, to file and pay taxes.
In October, personal income tax collections totaled $14.6 billion, surpassing budget estimates by $2 billion or 15.7 percent. The state received $3.9 billion in final 2024 tax return collections, exceeding budget projections by $498 million.
October’s collections also included 2025 estimated tax payments, with Los Angeles delayed filings contributing to this. These payments were $1.3 billion, or 72.4 percent, above projections.
As of the end of October, California had $85.8 billion in unused borrowable resources. These resources come from internal funds outside the General Fund and are borrowable under state law to manage cash deficits.
Cohen cautioned against using special fund borrowing for budgetary purposes, as it could increase future debts and deplete reserves. She warned that this might limit the state’s ability to avoid harsh spending cuts during economic downturns.
