Amnesty a Big Help in State Debt Repayment

California received some good budget news Thursday: State revenues ran $2.1 billion ahead of estimates in April largely because of an amnesty program that targeted taxpayers who used illegal tax shelters.

State Controller Steve Westly said the voluntary compliance program was responsible for $1.3 billion of the higher-than-anticipated revenue.

With the extra revenue and proceeds from Wednesday’s sale of $7.9 billion in bonds that had been approved by voters in March, Westly said the state will be able to repay $11 billion in short-term deficit financing that comes due in mid-June.

Westly called the amnesty program “a budget lifesaver” that could help Gov. Arnold Schwarzenegger and state lawmakers produce a balanced budget for the coming fiscal year, although he said it is “not going to be easy.”

But if lawmakers and the governor adopt a truly balanced budget on time, Westly said he is very optimistic that California’s general obligation bond rating, currently the lowest of any state, will be upgraded. And that could save taxpayers tens of millions of dollars in interest.

Overall state revenues to this point in the current fiscal year -- from July 1 through April 30 -- totaled $62.1 billion. That is $1.76 billion, or 2.9%, more than the Schwarzenegger administration forecast in January.

The April revenue report showed particularly strong increases in personal income and corporate tax receipts.