State controller: California revenues $700 million behind expectations, 'disappointing on almost every front'

In a written release, Controller John Chiang called January’s revenues "disappointing on almost every front." Personal income and corporate tax each lagged by a combined $700 million, and only the state sales tax managed to exceeded the mark, coming in $42 million higher than expected.

H.D. Palmer, deputy director for external affairs at the California Department of Finance, said that it was unclear why personal income’s lagging but that its "something we're watching."

It could be that self-employed taxpayers underestimated what they owed the state in January and will pay more in April. Californians also may have delayed stock sales because of market conditions — or the governor’s team may have over-estimated capital gains income.

If the trend continues, state lawmakers will be forced to close a larger deficit next year.

California lawmakers won’t know why January revenues were low until the end of April, after they’ve counted all the tax returns. A spokesman for the legislative analyst says that given the uncertainty, lawmakers are likely to wait until May before making any major budget decisions.