Controller Malia M. Cohen Reports Higher-Than-Expected Revenues While Warning of Long-Term Fiscal Risks

SACRAMENTO - Today, State Controller Malia M. Cohen released her monthly Cash Report which includes official General Fund revenue receipts and expenditure data for the fiscal year through April. While revenue collections continue to come in above budget estimates, Controller Cohen continues her call for fiscal prudence as any short-term volatility in tax collections could exacerbate projected structural deficits over the long term.

According to the Controller's Monthly Statement of General Fund Cash Receipts and Disbursements, receipts for the fiscal year through April exceeded the 2026-27 Governor's Budget estimate by $13.1 billion, or 6.8 percent. Spending was also lower than Governor's Budget estimates by $7.2 billion, or 3.3 percent.

"While revenues are currently coming in above projections, California's fiscal outlook remains closely tied to the performance of financial markets and a relatively small share of high-income taxpayers," said Controller Cohen. "As lawmakers carefully craft the next state budget, this is the time to remain disciplined by prioritizing debt reduction, protecting reserves, and preserving the flexibility we need to weather economic uncertainty."

For the fiscal year through April, personal income tax receipts were above Governor's Budget projections by $8.2 billion, or 6.9 percent. Corporation tax collections came in $2.7 billion above estimates, or 9.1 percent, and retail sales and use tax receipts were $137.9 million above projections, or 0.5 percent.

As of April 30, the state had $87.1 billion in unused borrowable resources in its special funds. These internal funds are available for short-term General Fund use in order to manage cash deficits related to the timing of revenue collections. While any cash-flow borrowing is repaid to not affect special fund operations, Controller Cohen cautioned against relying on internal borrowing to address budget gaps, warning that overuse can increase future liabilities and weaken reserves needed to avoid deeper cuts during an economic downturn.

As shown in the summary chart below, the 2026-27 Governor's Budget expects an ongoing gap of spending outpacing revenues: