Calif. taxes fall, boosting chance of more cuts - CBS News 8 - San Diego, CA News Station - KFMB Channel 8

Calif. taxes fall, boosting chance of more cuts

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SACRAMENTO, Calif. (AP) — California tax revenue fell nearly $539 million below projections last month, pushing the state closer to automatic, mid-year budget cuts to schools, universities and social services.

State Controller John Chiang said Tuesday that July's personal income, sales and corporate taxes were 10 percent below projections.

The state's budget contains automatic cuts if revenue falls more than $1 billion below expectations. Chiang says every revenue drop "puts us closer to the drastic trigger cuts."

The report comes after a massive sell-off on Wall Street. A declining market is bad news for California, which depends on wealthy residents for a disproportionately high share of its tax revenue.

Chiang said income taxes beat projections by 3 percent last month. But sales taxes were down 12 percent and corporate taxes fell 19 percent.

Copyright 2011 The Associated Press.

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