General fund revenues for August were $43 million below the state budget forecast of $3.06 billion, the California department of finance reported in its September finance bulletin.

"The shortfall for the month is mostly attributable to cash flow and does not represent a trend," the bulletin said. Year-to-date revenues, for the months of July and August, were $11 million above the forecast.

"The concurrent indicators were almost exactly as forecast, which is reassuring for the long term," the bulletin said.

Cash flow is being watched closely this fiscal year because the budget relies on a "trigger" provision to assure financial markets that California will repay its obligations.

Beginning next February, the trigger will impose automatic spending cuts in most state programs if the budget falls out of balance and the state's political leadership fails to resolve the problem.

The state controller's office is required by Nov. 15 to prepare a detailed report to the legislature and the governor on the estimated cash condition of the general fund.

In another development, the finance department bulletin said that California's economy "continues to show signs of a moderately paced recovery," noting that the state's August unemployment rate fell to 8.9% from July's 9%.

Subscribe Now

Access to authoritative analysis and perspective and our data-driven report series.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.