California state revenues continue to benefit from a risking stock market, according to State Controller Malia Cohen's monthly cash report, released Wednesday.

In the report, which covers the month of May, Cohen continued to reinforce her call for fiscal discipline to guard against revenue volatility as lawmakers work to pass a budget.

"With the end of the fiscal year approaching, and lawmakers hard at work to pass a balanced budget by June 15, state revenues have long been supported by all-time market highs and taxes paid by the highest income earners," Cohen said in a statement.

"While current revenues remain strong, California's fiscal outlook is still subject to economic uncertainty and revenue volatility," Cohen said. "As fiscal stewards, we must continue planning for the long term by paying down accumulated liabilities, strengthening our reserves, and maintaining the flexibility needed to respond to future challenges."

Receipts for the fiscal year through May exceeded the 2026-27 May revision estimate by $643.7 million or 0.3%. Spending was lower than estimates in Gov. Gavin Newsom's estimates by $5.4 billion or 2.4%, according to the report.

Cohen also announced Thursday morning she has formed a Council of Economic Advisors that will include Jerry Nickelsburg, who recently stepped down as head of the UCLA Anderson Forecast, though he continues to provide the California report in the forecast.

The announcement of formation of the advisory committee comes after the May 12 release of California's audited financial statements for the year ended June 30, 2025, which she said will "provide evidence-based insights, and practical and actionable policy recommendations on crosscutting issues that affect the state's fiscal condition."

Chaired by Nickelsburg, the advisory committee includes six experts who will advise the controller on global, national, state and local fiscal concerns.

"Together, the panel will assess California's economic performance throughout its regions and industries and recommend data-driven policy solutions to address major statewide challenges including in affordability, tax policy, healthcare, education, small business development, workforce development and equitable growth," according to the press release.

"While we continue to reimagine financial transparency in order to give Californians a clearer understanding of the state's financial condition, we need to call upon expert talent that has its fingers on the pulse of what is driving global, national, statewide and regional markets, and how it affects our state's competitiveness as the world's fourth largest economy," Cohen said.

The selected council members "have graciously agreed to share their objective and independent economic analysis and recommendations on issues that significantly affect Californians, our diverse regions, and our state's revenues today and in the future. I wholeheartedly thank them for agreeing to serve in this important role," she added.

The other members of the advisory committee are: Mira Farka, economics professor and co-director for the Woods Center for Economic Analysis and Forecasting at California State University, Fullerton; Sean Randolph, senior director of the Bay Area Council Economic Institute; William (Bill) Lee, chief economist and managing director of Global Economic Advisors: Manfred Keil, who is associate director of the Low Institute of Political Economy associate professor of economics at Claremont McKenna College and Chief Economist of the Inland Empire Economic Partnership; and Fred McKinney, economic advisor to the State Controller's Office.

The cash report said personal income tax receipts were above May revision projections by $412.7 million, or 0.3%. Corporation tax collections came in $89.4 million below estimates, or 0.3% below, and retail sales and use tax receipts were $455.3 million above projections, or 1.5% above estimates.

As of May 31, the state had $86.9 billion in unused borrowable resources in its special funds. These internal funds are available for short-term general fund use in order to manage cash deficits related to the timing of revenue collections.

While any cash flow borrowing is repaid to not affect special fund operations, Cohen said she continues to caution against relying on internal borrowing to address budget gaps, warning that overuse can increase future liabilities and weaken reserves needed to avoid deeper cuts during an economic downturn.

She also included a chart showing that the 2026-27 May revision estimates indicated there would be an ongoing gap in which spending outpace revenues.