Friday, November 08, 2013

State and Local Finances Improving, California Controller says: "Great Recession is becoming a faint image in the rear view mirror"

by Calculated Risk on 11/08/2013 05:11:00 PM

Earlier today I posted a graph showing that after 4 years of layoffs, state and local governments have started increasing employment again. Yesterday I noted that state and local governments are now adding to GDP growth.

Today from the California State Controller: Controller Releases October Cash Update

State Controller John Chiang today released his monthly report covering California’s cash balance, receipts and disbursements in October 2013. Revenues for the month totaled $5.3 billion, surpassing estimates in the state budget by $510.5 million, or 10.7 percent. Total revenue from the first four months of the fiscal year totaled $25.5 billion, beating year-to-date estimates by $603.7 million.

"State revenues are more than $600 million ahead of projections following a second straight month of strong collections," said Chiang. "Importantly, because higher-than-expected payroll withholdings and estimated payments are driving the good news, it signals that Californians are beginning to earn more, work more, and the Great Recession is becoming a faint image in the rear view mirror."
emphasis added
From Joshua Dennerlein at Merrill Lynch today:
After three years of being a headwind to economic growth, state and local (S&L) governments are beginning to show signs of life. While it is early in the story, S&L spending may be a slight tailwind to the economy in 2014. ... The recovery in the state and local sector presents an upside risk to our 2014 forecasts.