In recent decades, Californians have spent more of their income on housing, health care, and other services not subject to the state and local sales tax.
Using various provisions of state tax law, such as tax credits, corporations may reduce their tax liability. These tax law provisions have led to corporations' effective state tax rate falling in recent years.
California has a greater share of jobs in professional/business services and information combined than those sectors have in the rest of the U.S. This can be attributed in part to the state's technology and entertainment industries.
Over the past several decades, the personal income tax has replaced the sales tax as the main source of the state's General Fund revenue.
California ranks behind Texas and North Dakota in oil output, excluding offshore production on federal lands. Over 70 percent of statewide oil production is in Kern County. Oil prices fluctuate widely, and changes in prices can be connected with changes in production activity.
Last week, data showed that personal and corporate income taxes together were $1.6 billion above June 2014 budget projections through November 30. New preliminary data on November General Fund sales tax collections indicate this tax is running a couple of hundred million dollars below budget act projections for the 2014-15 fiscal year to date.
In February 2012, over 400 redevelopment agencies were dissolved, and the process of unwinding their financial affairs began.
Proposition 2, passed by voters in November 2014, includes provisions intended to help manage state budget revenue volatility, principally by requiring certain state revenues to be deposited in budget reserves.
The state government's largest revenue source, the personal income tax, is much more volatile than "personal income," one key economic statistic that measures the overall size of the economy.
Venture capital investments play a key role in financing new technology firms. California--especially the Bay Area--receives a very large share of such investments.
Most months, we will provide updates on California state tax revenue collections. These updates will come in several waves as information becomes available. In this post, we discuss November 2014 personal and corporate income tax collections.