Economy

California enters downturn as revenues fall sharply

Rising interest rates and a sluggish stock market are the culprits.
California Gov. Gavin Newsom (D) (AP Foto/José Luis Villegas, archivo)

California collected $26 billion fewer tax dollars than expected last fiscal year as the stock market struggled and the state economy entered a downturn, according to a blog post published Friday by the Legislative Analyst’s Office, a nonpartisan agency that advises the California legislature.

Sales tax collections were flat and income tax collections fell 25% in Fiscal Year 2023 — a major plunge.

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