Well, that’s the amount that California sales tax collections dropped in the 2008-2009 fiscal year according to the Board of Equalization. Readers of Taxable Talk already know that income tax collections have fallen, so this unsurprising news is a double whammy to the Bronze Golden State. The report (the full report is available here) also notes that property values fell by $106.6 billion; that has and will continue to impact local governments in California.
Taxable sales fell 12% ($68.5 billion decrease); the only reason that sales tax collections to California didn’t fall by the same amount is that the sales tax rate was increased in April 2009 by 1% (from 7.75% to 8.75% in Orange County).
Prospects for increased revenue to California are bleak in the near term. California continues to impose numerous regulations and costs to businesses; it’s as if the Democrats in the legislature want businesses to leave. There is no driving force in California for job creation (this is true to a lesser extent nationally). Tax increases that will hit in 2011 are likely to cause even more economic troubles. And it may take a miracle for the legislature to finalize a balanced budget this year–they are running out of gimmicks and mirrors to use to balance the budget.
Yes, I have those pessimism blues on a Saturday morning.