Falling corporate profits gouge a wider hole in California budget

California’s budget problems deepened today as the state reported that tax receipts plummeted nearly $1 billion last month due to plunging corporate profits.

The news comes as the state moves closer to the July 1 deadline for lawmakers to close California’s budget gap, which had earlier been estimated at $16.5 billion. There is little agreement in the Capitol about how to go about doing that.

Democrats have been calling for multibillion-dollar tax increases. Republicans have signed pledges vowing never to vote for new revenue, demanding instead that the budget be balanced with steep spending cuts.

Corporate taxes alone came into the state at $869 million below what was forecast in Gov. Arnold Schwarzenegger’s budget, released in January. Overall, revenue was down $912 million for the month.

Officials in the capital are bracing for the possibility that California’s finances will slide even further into the red as state accountants tally receipts from April, when most taxpayers file their returns for the year.

“April personal income tax receipts will be critical,” said the report released today by the state Department of Finance.

evan.halper@latimes.com