Keep Factually independent
Whether you agree or disagree with our analysis, these conversations matter for democracy. We don't take money from political groups - even a $5 donation helps us keep it that way.
What are the sources of California government revenue for the past three years?
Executive summary
California’s state revenue over the past three fiscal years has been driven overwhelmingly by the “Big Three” taxes—personal income, sales, and corporation taxes—with personal income tax fluctuations producing large swings in receipts and budget balances (e.g., FY2023 tax collections ~ $220–$246 billion range across sources) [1] [2]. Independent analysts and state trackers document sharp volatility: large one‑time gains in 2021–22 helped create a headline surplus, while 2022–24 saw big declines and an operating deficit driven mainly by falling personal income tax receipts [3] [4].
1. What “counts” as California government revenue — the Big Three and beyond
California’s General Fund and broader state receipts come mainly from three taxes: personal (individual) income tax, sales tax, and corporation tax—often called the “Big Three”—which together supply roughly three‑quarters of General and special fund revenue in recent budgets [5] [2]. Beyond those, the state collects a patchwork of other sources: fees and charges (tuition, tolls), excise taxes (e.g., cannabis, firearms excise in newer law), transfers from the federal government, bond proceeds, and a host of special‑fund levies and fines [6] [7] [8].
2. Recent three‑year pattern: boom, bust, then mixed recovery
Fiscal 2021–22 featured unusually large personal income tax gains that produced a headline “surplus” and funded one‑time spending (reporting tied to 2022 budget materials) [3] [9]. In 2022‑23 and 2023‑24 revenues fell from that spike—chiefly because the most volatile component, taxable income of high earners tied to capital gains and tech sector wealth, declined—creating budget shortfalls and revised lower forecasts [4] [10]. By 2024‑25 and into 2025, updated forecasts and preliminary collections showed stronger‑than‑expected income tax receipts—boosted by gains in tech withholding and market returns—causing revised upward revenue estimates, though analysts warn the improvement may shrink deficits rather than create durable new spending capacity [11] [12].
3. How much came from each source in headline terms
Public datasets and state trackers show income taxes as the dominant single source: for example, personal income tax receipts in FY 2021‑22 and FY 2022‑23 ran into the tens of billions—SCO reported PIT receipts of $99.01 billion through March 2022 and later trackers cited $143.62 billion as a full year PIT total in a recent year—numbers that represented a large share of General Fund revenues [13] [14]. Statista and other compilations place total tax revenue collected by California at roughly $220 billion (FY2023) — the largest state tax haul in the U.S. [1]. The enacted 2023‑24 budget assumed General Fund revenues (including transfers) of about $208.7 billion, showing the scale and year‑to‑year movement officials budget against [2].
4. Federal transfers and local revenues matter, too
Federal transfers are a substantial revenue component for California state and local governments: USAFacts reported California received about $161.7 billion in federal transfers in FY2022 [15]. When comparing the broad picture of “how California governments are funded,” combined state and local revenues include property taxes and local shares of sales tax, with local governments collecting roughly $100 billion additional revenue beyond the state’s receipts in recent budgets [16].
5. Why volatility is the central story and who highlights it
The Legislative Analyst’s Office (LAO) and other independent forecasters emphasize volatility in the income tax base (capital gains, bonuses, tech sector compensation) as the core risk, producing wide swings across those three fiscal years and complicating budgeting [17] [4]. Credit analysts and media coverage flagged a revenue shortfall pattern and a prior “surplus” that, according to critics, led to spending increases that now exacerbate operating deficits [18] [19]. Conversely, some more recent LAO updates and state May Revision materials note upward revisions as income taxes and withholding improved—illustrating competing views on whether revenues are stabilizing or remain fragile [12] [7].
6. Data sources and limits you should know
Primary publicly cited sources in recent reporting include the Governor’s Budget revenue estimates and May Revisions (ebudget docs), the State Controller’s Office daily tax trackers for PIT receipts, the LAO fiscal outlooks, federal Census/FRED tax collection series, and private aggregators like Statista—each with different scopes (General Fund vs. state+local; cash vs. accrual; budgeted vs. collected) [3] [13] [17] [20]. Available sources do not mention a single unified three‑year table in this search set that sums every revenue line at a consistent fiscal definition; instead you must combine budget documents (ebudget), SCO trackers, LAO analyses, and federal transfer tallies to compile a complete three‑year picture [7] [13] [15].
7. Bottom line for readers and policymakers
The past three years show California’s revenue mix is concentrated and volatile: income tax swings—largely from high‑income and capital gains dynamics—drive year‑to‑year budget outcomes, while sales and corporate taxes and federal transfers cushion but do not remove that volatility [3] [4] [5]. Analysts and budget offices differ on whether recent upticks represent durable improvement or temporary rebounds, meaning fiscal policy choices (reserves, one‑time spending, tax changes) remain politically and technically consequential [12] [19].