The economic boom based on housing’s surge elevated California
dividends to a record $102.5 billion in 2007. After the financial crisis caused
companies to hoard cash, dividends plummeted to only $66 billion-$67 billion in
2009 and 2010. Large gains in cash flow, limited opportunities seen by
companies for investment opportunities, and shareholder pressure are again
driving larger dividend payouts.
The recovery in dividends is another good piece of news for the State’s
financial coffers, but is also another sign of the cyclicality of California’s
revenue base.
Also of note: As
the Franchise Tax Board closes out its income tax return processing for 2013
returns, some staff will begin to focus their efforts on completing the refund
cycle. At the end of last April, FTB had identified 479,000 taxpayers who
still had refunds outstanding, at a value of about $500 million.
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