Controller Cohen Warns Strong Revenues Mask Growing Fiscal Risks in November Cash Report

SACRAMENTO - California's General Fund revenues continue to exceed projections, but the state's underlying fiscal challenges remain significant, according to the State Controller's November Cash Report released by Controller Malia M. Cohen.

The Controller's Monthly Statement of General Fund Cash Receipts and Disbursements shows that revenues for the fiscal year through November exceeded the 2025-26 Budget Act estimate by $7 billion, or 9 percent, while expenditures surpassed projections by $3.1 billion, or 3 percent, increasing pressure on the state's budget position.

Controller Cohen cautioned that several strong revenue years do not resolve California's longer-term fiscal imbalance, particularly as ongoing deficits are expected to persist and widen.

"It is true that revenues continue to outperform expectations, but we cannot allow several strong revenue years to obscure the broader fiscal reality facing California," said Controller Cohen. "The Governor, the Legislature, and my office all have difficult decisions ahead. Even as receipts come in above projections, the state is still facing ongoing deficits that are expected to widen over the next few years. This moment calls for discipline. We must work together to reduce spending, rebuild reserves, and limit our reliance on internal borrowing so that California is prepared to withstand future economic volatility and protect the programs Californians rely on."

For the fiscal year through November, personal income tax receipts exceeded projections by $6.2 billion, or 13.6 percent. Corporation tax collections fell $287.1 million below estimates, or 3.9 percent, and retail sales and use tax receipts were $276.4 million below projections, or 2.1 percent.

As of November 30, the state had $87.8 billion in unused borrowable resources-short-term internal loans from special funds used to manage cash timing differences when expenditures exceed revenue collections. While these funds are repaid and do 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.

Summary Chart follows: