Just nine days ago, I noted that California's economy was showing some signs of improvement, as indicated by positive changes in the state's cash situation at the end of 2009. General Fund revenues for December came in at $481 million higher than forecast in the most recent state budget, driven largely by increases in personal tax revenue.
January's numbers brighten the picture considerably. The latest summary from Controller John Chiang has General Revenues $1.28 billion higher than expected, a result of higher personal income, corporate and sales tax revenues.
The new numbers do not mean California isn't still headed for another debilitating budget fight to make up for shortfalls expected later this year. But they are still important. Way back in February 2007, we started seeing tax revenues in big states like Florida and California start to crumple, as a result of the housing bust, well before Wall Street went into panic mode. If California -- the eighth largest economy in the world, if viewed in isolation -- is turning the corner, so too will the entire U.S.