Economy and Taxes Publications

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Hearing Handout

Tax Expenditures and Revenue Options

April 7, 2008 - Presented to: Assembly Revenue and Taxation committee

Hearing Handout

Informational Hearing on Tax Expenditures

February 27, 2008 - Presented to Senate Revenue and Taxation Committee

Report

LAO Revenue-Raising Proposals

February 20, 2008 - The Governor’s budget includes almost no new revenue-raising proposals. Given the magnitude of the budget problem, we examine the state’s existing tax structure in the same way as the spending side--with an eye towards reducing inefficient or ineffective provisions. In this section, we discuss proposals that look at the revenue side of the budget. In so doing, we have applied the same approach as with direct spending programs--that is, we have examined tax-related provisions referred to as tax expenditure programs (TEPs)--and recommended changes to those that are not achieving their stated purposes or are of a lower priority.

Report

2008-09 Budget: Perspectives and Issues

February 20, 2008 - 2008-09 Budget: Perspectives and Issues

Report

State Fiscal Picture 2008-09

February 20, 2008 - State Fiscal Picture 2008-09

Report

Perspectives on the Economy and Demographics 2008-09

February 20, 2008 - Perspectives on the Economy and Demographics 2008-09

Report

Perspectives on State Revenues 2008-09

February 20, 2008 - Perspectives on State Revenues 2008-09

Report

Tax Expenditure Reviews

November 16, 2007 - Tax expenditure programs (TEPs) are features of the tax code—including credits, deductions, exclusions, and exemptions—that enable a targeted set of taxpayers to reduce their taxes relative to what they would pay under a “basic” tax-law structure. The state’s TEPs number in the hundreds and are valued in the tens of billions of dollars annually, and are used mostly to encourage certain types of behavior or provide financial assistance to taxpayers. This report provides information on newly enacted TEPs and reviews selected existing TEPs as to their effectiveness and efficiency. One of these is the mortgage interest deduction, valued at about $5 billion yearly. This program is found to be an inefficient means of promoting home ownership, and options are offered for improving it, including capping the deduction amount or replacing it with a targeted tax credit.

Report

California's Fiscal Outlook: LAO Projections, 2007-08 Through 2012-13

November 14, 2007 - In order to balance the 2008–09 budget, the state will have to adopt nearly $10 billion in solutions. Addressing the state’s current budget problem is even more urgent because we forecast a continuing gap between revenues and expenditures. A plan to permanently address the state’s fiscal troubles must involve a substantial portion of ongoing solutions. This is not only because of the persistent operating deficits projected throughout the forecast, but also because of the downside risks inherent with the economy, General Fund revenue volatility, and a wide range of budgetary uncertainties. Making tough choices now will allow the state to move closer to putting its fiscal woes in the past.

Hearing Handout

The Subprime Mortgage Situation

November 1, 2007 - Presented to: Assembly Banking and Finance Committee

Presentation

Infrastructure and the Use of Bonds in California

October 3, 2007 - Presented at the Public Policy Institute of California October 3, 2007, Debt Conference

Hearing Handout

The Subprime Mortgage Situation

August 21, 2007 - Presented to the Senate Banking, Finance and Insurance Committee.

Report

California's Tax System: A Primer

April 9, 2007 - What are the different types of taxes upon which California relies? What is their relative importance, and how have they evolved over time? How large a “burden” do these taxes impose on Californians, both in absolute terms and compared to other states, and how is this burden distributed? What types of policy issues are associated with the current tax structure, especially in light of our changing economy? The purpose of this primer is to address these and other tax-related questions, so as to aid policymakers and other interested parties in their tax-related deliberations and decision making.

Report

The Governor’s Tax Proposal

February 21, 2007 - The budget contains two tax-change proposals. The first is to permanently repeal the existing teacher retention tax credit, which was adopted in 2000 but was temporarily suspended in four of the past six years. The second is to make permanent a temporary change made in 2004 to extend, from 90 days to one year, the time that vessels, vehicles, and aircraft recently purchased out of state must be kept outside of California in order to avoid the state’s use tax. We provide background on these two proposals, discuss their economic and fiscal impacts, and identify issues associated with them. Based on our review, we recommend that the Legislature adopt both proposals.

Report

Narrowing the Tax Gap

February 21, 2007 - There is a substantial difference between the amount of taxes that are statutorily owed to the state versus the taxes that are actually remitted by taxpayers. This difference, known as the "tax gap," is currently estimated at $6.5 billion annually and is due to the underreporting of income and various other factors. The budget proposes to spend $19.6 million in 2007-08 to continue certain pilot programs and undertake several new initiatives aimed at narrowing the tax gap. We recommend that the Legislature redirect some of the proposed budget-year spending on tax gap enforcement activities in order to increase their payoff in terms of General Fund revenues."

Economy and Taxes Staff

Chas Alamo
(916) 319-8357
Employment, Labor Law, and Property Taxes
 
Ann Hollingshead
(916) 319-8305
State Budget and Federal Funding
 
Lourdes Morales
(916) 319-8320
Local Government
 
Nick Schroeder
(916) 319-8314
Public Employment, CalPERS, and Elections
 
Brian Weatherford
(916) 319-8337
Corporation Tax and Insurance
 
Angela Short
(916) 319-8309
Teachers' Retirement Policy/ Child Welfare/ Community Care Licensing
 
Brian Uhler
(916) 319-8328
Deputy Legislative Analyst: Economy, Taxes, and Labor
 
Justin Garosi
(916) 319-8359
Personal Income Tax
 
Seth Kerstein
(916) 319-8365
Sales and Excise Taxes and Demographics