Forecasting revenue receipts in the States: Current challenges in California

General Fund revenue growth in California has been quite strong in recent y ears, led by major increases in personal income taxes (PITS). This paper re views the performance of the state's major taxes in the recent expansion, t hen turns to the main issue facing revenue estimators in California today-n amely, the impact of shifting income distributions on PIT liabilities in th e state. It then briefly discusses issues relating to forecasting Californi a's other major revenue sources.