Economy and Taxes Publications

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Reforming California’s Tax System

January 22, 2004 - Presented to the Little Hoover Commission


An Overview of California's Enterprise Zone Hiring Credit

December 30, 2003 - The value of the EZC program is quite dependent on the goals that the Legislature wishes to achieve. Available evidence generally indicates that EZ incentives have little if any impact on the creation of new economic activity or employment. On the other hand, EZ incentives do appear to be effective in increasing economic activity within smaller geographic areas—such as within metropolitan regions.


An Overview of California’s Research and Development Credit

November 30, 2003 - Economic theory suggests that without some form of subsidy, overall research and development (R&D) spending in society would be lower than the economically optimal level. A strong case can be made that such a subsidy is appropriate at the federal level. However, we are not aware of economic evidence which, on balance, justifies a state credit in addition to the federal credit.


California's Fiscal Outlook: LAO Projections, 2003-04 Through 2008-09

November 14, 2003 - According to our projections, the state is facing a year-end shortfall of $10.2 billion in 2004-05 assuming the vehicle license fee (VLF) rate increase remains in effect, and substantially more if the rate is rolled back and the state resumes backfill payments to localities. Over the longer term, absent corrective actions, the state faces annual current-law operating deficits that remain over $9 billion through the end of the forecast period—and $14 billion if the VLF rate is rolled back.


California Spending Plan 2003-04: The Budget Act and Related Legislation

October 23, 2003 - The Legislature was faced with addressing an enormous two-year General Fund budget shortfall in developing the state's spending plan for 2003-04. We discuss the factors underlying this shortfall, describe the key actions taken to address it, and provide detail on the adopted budget package.


State Options Concerning Cigarette Tax Evasion

February 19, 2003 - Cigarette smuggling and related tax evasion is a current concern in California, as well as in many other states. In view of the administration's proposal to more than double cigarette excise taxes, the incentives for such evasion are likely to increase. This analysis presents options the state could take to address this issue.


The Governor's Tax Proposal: Evaluation and Alternatives

February 19, 2003 - The Governor is proposing an $8.3 billion total tax increase to fund his realignment program and reduce the General Fund's budget shortfall. This proposal would raise the sales and use tax by one percentage point ($4.6 billion), establish 10 percent and 11 percent high-income tax brackets ($2.6 billion), and raise the cigarette tax by $1.10 per pack ($1.2 billion).


The 2003-04 Budget: Perspectives and Issues

February 19, 2003 - Perspectives on the state's fiscal condition and the budget proposed by the Governor for 2003-04.


State Fiscal Picture 2003-04

February 19, 2003 - California faces an unprecedented budget shortfall--roughly one-third of the General Fund budget-- due to an unexpected dramatic decline in state tax receipts combined with ongoing increases in state government costs. The Governor's budget proposal, would eliminate the while its large amount of ongoing savings would also address California's long-term structural imbalance.


Perspectives on the Economy and Demographics 2003-04

February 19, 2003 - The United States and California economies continue to struggle in early 2003, due primarily to restrained hiring and investment pending by businesses. We assume that stronger economic growth will resume in the second half of 2003


Perspectives on State Revenues 2003-04

February 19, 2003 - We estimate that revenues will exceed the budget forecast by a net of $1.3 billion in 2002-03 and 2003-04 combined. Our higher estimate assumes a somewhat earlier and stronger economic recovery than does the administration.


Governor's Tax Increase Proposal

January 30, 2003 - Hearing handout presented to the Senate Revenue and Taxation Committee


Lease-Leaseback Transactions by Public Transit Districts--Sales and Use Tax Exemption

January 28, 2003 - The Sales and Use Tax exclusion granted through Chapter 592 is scheduled to sunset on January 1, 2004. Based on our examination of the impact of this exemption on state and local governments, we believe that a strong case can be made for removing the sunset and allowing the exclusion to continue


An Overview of California's Manufacturers' Investment Credit

October 30, 2002 - We review and assess the effectiveness and appropriateness of the Manufacturers’ Investment Credit.


California Spending Plan 2002-03: The Budget Act and Related Legislation

September 27, 2002 - In this report, we discuss the factors underlying the major fiscal challenge facing the state in 2002-03, describe the key actions taken to address the shortfall, and provide detail on the adopted budget package.

Economy and Taxes Staff

Chas Alamo
(916) 319-8357
Personal Income Tax, Employment, and Labor Law
Ross Brown
(916) 319-8345
Property Taxes, Bonds, and the Economy
Ann Hollingshead
(916) 319-8305
State Budget and Federal Funding
Lourdes Morales
(916) 319-8320
Local Government, Housing, and Homelessness
Nick Schroeder
(916) 319-8314
Public Employment, CalPERS, Elections, Veterans Affairs
Bidusha Mudbhari
(916) 319-8363
Corporation Tax and Economic Development
Brian Uhler
(916) 319-8328
Deputy Legislative Analyst: Economy, Taxes, and Labor
Seth Kerstein
(916) 319-8365
Sales and Excise Taxes and Demographics