California is dealing with a revenue shortfall partly due to a delay in 2022-2023 tax collection. The IRS postponed 2022 tax payment deadlines for individuals and businesses in 55 of the 58 California counties to provide relief after a series of natural weather disasters, including severe winter storms, flooding, landslides and mudslides.
Tax payments were originally postponed until Oct. 16, 2023, but hours before the deadline they were further postponed until Nov. 16, 2023. In line with the federal action, California also extended its due date for state tax returns to the same date.
These delays meant California had to adopt its 2023-24 budget before collections began, “without a clear picture of the impact of recent economic weakness on state revenues,” according to the LAO.
Total income tax collections were down 25% in 2022-23, according to the LAO — a decline compared to those seen during the Great Recession and dot-com bust.
“Federal delays in tax collection forced California to pass a budget based on projections instead of actual tax receipts,” Erin Mellon, communications director for California Gov. Gavin Newsom, told Fox News. “Now that we have a clearer picture of the state’s finances, we must now solve what would have been last year’s problem in this year’s budget.”
Hellbound and Down 