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January 14, 2019 - This report presents our office’s initial assessment of the Governor’s Budget. The budget’s position continues to be positive. With $20.6 billion in discretionary resources available, the Governor’s budget proposal reflects a budget situation that is even better than the one our office estimated in the November Fiscal Outlook. The Governor’s Budget allocates nearly half of these discretionary resources to repaying state liabilities. Then, the Governor allocates $5.1 billion to one-time programmatic spending, $3 billion to reserves, and $2.7 billion to ongoing spending. Although the Governor’s allocation to discretionary reserves represents a smaller share of resources than recent budgets, the Governor’s decision to use a significant share of resources to pay down state debts is prudent. The Governor’s ongoing spending proposal is roughly in line with our November estimate of the ongoing capacity of the budget under an economic growth scenario. This was just one scenario, however. Recent financial market volatility indicates revenues could be somewhat lower than either we or the administration estimated.
December 11, 2018 - The California Alternative Energy and Advanced Transportation Financing Authority (CAEATFA) administers a sales tax exemption for equipment used for certain manufacturing activities. (Many people refer to this program as an exclusion rather than an exemption.) Under current law, this program will end on January 1, 2021. Public Resources Code 26011.8(g) requires our office to report on the effectiveness of the program—including its economic, fiscal, and environmental effects—by January 1, 2019. This report fulfills that statutory requirement.
December 6, 2018 - With a state as big, as populous, and as complex as California, quickly summarizing how its economy or state budget works is impossible. Instead, Cal Facts is a visual guide—using a variety of different charts—to the state's economy, revenues, and major program trends.
November 26, 2018 - Taxes on sugary drinks have become increasingly common in recent years. In June 2018, the Legislature passed a law (Chapter 61 of 2018 [AB 1838, Committee on Budget]) prohibiting local governments from levying such taxes (and other taxes on groceries) through 2030. The law stated the Legislature’s intent to regulate the imposition and collection of such taxes to the exclusion of local action. As such, the Legislature may face the following decisions: (1) Should the state levy an excise tax on sugary drinks? and (2) If so, how should the tax be designed? This report provides information and perspectives for the Legislature to consider as it weighs these choices.
October 15, 2018 - Presented to: Assembly Revenue and Taxation Committee and Senate Governance and Finance Committee
October 8, 2018 - Housing is very expensive in California—in early 2018, the typical California home cost $481,000, roughly double the price of the typical home in the United States. The state offers the Property Tax Postponement (PTP) Program to help certain homeowners afford their property taxes and stay in their homes. This report evaluates the advantages and shortcomings of the PTP and offers policy alternatives for legislative consideration.
June 26, 2018 - Presented to Senate Committee on Budget and Fiscal Review
May 31, 2018 - To be present to: Budget Conference Committee
May 22, 2018 - This post describes the Proposition 55 calculation for Medi-Cal spending in the Governor’s May Revision.
May 14, 2018 - The 2018-19 May Revision proposes to expand the state’s Earned Income Tax Credit. In this post, we describe and comment on the proposal.
May 12, 2018 - In this report, we discuss our new revenue outlook for the state, released as part of our response to the Governor's 2018-19 May Revision.
May 12, 2018 - In this report, we discuss our new economic outlook for the state, released as part of our response to the Governor's 2018-19 May Revision.
May 8, 2018 - This post explains a grant program that provided funds for education and outreach related to the state earned income tax credit (EITC) and provides comments on how the Legislature might prioritize any future state-funded EITC outreach activities.
April 12, 2018 - The state and local governments collected about $220 billion in tax revenue in 2015‑16—equal to nearly 10 percent of the California economy. The personal income tax is the state's main revenue source, the property tax is the major local tax, and the state and local governments both receive revenue from the sales and use tax. In addition, many smaller taxes raise revenue for state and local government operations. This visual guide explains California's tax system using over 40 data visualizations. The report examines various characteristics of the tax system including what items are taxed, who pays the taxes, and how taxes are used.
April 10, 2018 - Presented to: Assembly Budget Subcommittee No. 4 on State Administration