California’s economic outlook improving
After several long years battling one of the worst recessions on record, California's economic outlook may finally be looking brighter - at least that was cautiously suggested Monday as part of the governor's revised May budget plan.
Noting that the state and national housing market continues to be a weak point as well as both state and local governments - the governor's Department of Finance expects California to recover the non-farm jobs lost during the recession sometime in the third quarter of 2016.
California gained an average of 30,000 new non-farm jobs five out of six months through March - which was a big improvement over the average 7,000 monthly jobs gained during all of 2010 and the monthly average loss of 65,000 jobs during 2009.
Another way to look at the jobs picture - California added more than 90,000 jobs during the first three months of 2011 with the strongest growth coming among professional services - which are among the highest paying in the state.
Still, the unemployment rate remains close to 12 percent with the state's work force about 1.2 million below its peak in July 2007.
Largely based on the improved outlook, the May budget estimates that general fund revenues will be $2.8 billion higher than January projections for the current fiscal year and $3.5 billion higher for 2011-12.
The forecast for the state's major tax sources shows general fund revenues building from $84.5 billion in 2009-10 to $112.5 billion in 2014-15 with the average yearâoverâyear growth rate expected to be 5.9 percent.
Personal income taxes have grown to become the dominate part of the state's revenue picture - accounting today for more than half of the general fund.
Through the end of April, personal income tax collections came in almost $3 billion above January projections - much of it associated with capital gains taxes being paid by the state's highest earners.
After falling by nearly 50 percent in 2009, capital gains taxes are now expected to increase 60 percent in 2010 and by another 45 percent in 2011.