Economy and Taxes Publications

Administration of the Insurance Tax Program: A Case for Limited Reform

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February 1, 1985 - As a result of questions raised by state agencies and legislative staff regarding the administration of the insurance tax, the Legislature enacted Ch 994/80. That measure requires the Legislative Analyst to review the present administrative arrangement and recommend revisions to existing law and procedures. This report was prepared in response to the requirement contained in Chapter 994. Chapter I of the report provides the reader with a description of the insurance tax and how it is applied. Chapter II describes the mechanisms for administering the tax that are now in place. Chapter III seeks to answer the question of whether the audit program, as currently structured, maximizes insurance tax revenue collections. Chapter IV presents our recommendations for legislative action that would address the system's shortcomings.

California's Parimutuel Horse Racing Tax

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December 5, 1984 - The Legislative Analyst's Office was asked to present testimony to the Senate and Assembly Committees on Governmental Organization regarding the states parimutuel horse racing tax. This report covers 4 topics.

The Fiscal Impact of Proposition 36, the Jarvis Property Tax Initiative

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September 25, 1984 - Testimony Before the Senate Governmental Organization Committee and the Joint Committee on the State's Economy.

Assessment of Weight Fees on Farm Vehicles in California

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September 1, 1984 - The construction and maintenance of California's highway system is financed primarily with tax revenues from two sources: (I) federal and state taxes assessed on the sale of gasoline and diesel fuel, and (2)weight fees imposed on commercial vehicles weighing more than 2,000 pounds.

The 1984-85 Budget: Perspectives and Issues

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February 1, 1984 - (245 pages, 12 MB) For the first time in three years, the Legislature's budget choices are not limited to raising taxes or cutting into the base level of expenditures. Sufficient funds will be available in 1984-85 to maintain, and even expand, the existing level of services provided to the people of California. In terms of real purchasing power, the level of General Fund revenues projected for 1984-85 is 4.0 percent higher than the level of revenues estimated for the current year. Here we provide a brief overview of the state's fiscal condition during the current and budget years, estimate what it would cost to maintain the existing level of services provided by the state in 1984-85, take a brief look at the long-term fiscal outlook for the state, and provide a more detailed discussion of revenues and expenditures.

Federal Retrenchment and State Management

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October 21, 1983 - Transcript of the introduction and observations of a panel discussion led by Legislative Analyst Bill Hamm on federal retrenchment and state management. Bill includes four observations as follows. (1) The states' management of the retrenchment process—particularly in terms of the transition from categoricals to block grants—has been a solid success. (2) The relationship between federal and state tax policies is not what many of us were led to believe. (3) Faced with the inevitability of federal retrenchment, state governments have done a poor job of articulating what's really important to them and what isn't. (4) More and more, state management of federal, as well as state, money is being limited by the courts.

The 1983-84 Budget: Perspectives and Issues

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February 1, 1983 - (219 Pages, 75 MB) For the third year in a row, the Legislature faces a budget that does not contain sufficient funds to maintain the existing level of services provided to the people of California. If the budget estimates turn out to be accurate, 1983-84 will be the first year since 1977-78 in which state revenues exceed state expenditures. Whether, in fact, these estimates do prove to be accurate will depend largely on three factors: (1) the performance of the state's economy; (2) policy decisions made by the Legislature, and (3) decisions handed down by the courts. Estimated expenditures in 1982-83 are $1.5 billion greater than estimated resources available in the current year. Thus, unless actions are taken by the Legislature prior to June 30, 1983, or the economy (and hence revenues) performs better than anticipated, the state will end 1983 with a deficit of approximately $1.6 billion.

The 1982-83 Budget: Perspectives and Issues

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February 1, 1982 - (136 pages, 8 MB) For the second year in a row, the Legislature faces a budget that does not contain sufficient funds to maintain the existing levels of service. In terms of real purchasing power, the Governor's Budget for 1982-83 is 3.5 percent lower than the budget for the current year. The General Fund portion of the Governor's Budget will be in balance only if several critical assumptions underlying the budget are borne out. These assumptions include: the state's economy will improve by rnid-1982; the Legislature will approve total revenue package of nearly $1 billion; at the June 1982 primary election, the voters will approve the bond measure for state prison construction, .and disapprove initiatives relating to income tax indexing and inheritance and gift taxes. If these and other assumptions are not borne out, the General Fund will end the year with a deficit, even if there is no carry-over deficit remaining. Here, we provide a perspective on the state's current fiscal situation, including options for addressing the deficit in the General Fund Budget for 1982-83, provide a perspective on the budget issues that the Legislature faces in 1983-84, and discuss major issues that have been identified in our review of the state's current fiscal condition and the Governor's Budget for 1983-84.

An Analysis of Proposition 4: The Gann "Spirit of 13" Initiative

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December 1, 1979 -

On November 6, 1979, California voters overwhelmingly approved Proposition 4, the "Spirit of 13" Initiative sponsored by Paul Gann. The proposition, which places Article XIIIB in the California Constitution, limits the growth in appropriations of both state and local governments to changes in the cost of living and population in order to control the spending levels established by California governments. Proposition 4 also attempts both to clarify the fiscal roles played by the various branches (legislative, judicial and executive) and levels (federal, state and local) of government, and to insure that any surplus funds are promptly returned to the people.

Proposition 4 is a sweeping measure which will dramatically affect both the state government and the vast majority of California's 6,600 local governments. Precisely how it will affect these governments, though, is not clear because the measure raises many questions and problems regarding how it is to be interpreted.

The Economic and Fiscal Impacts of California's Aircraft Ground Time Exemption

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January 1, 1979 - Chapter 1169, Statutes of 1973 (58 911), modifies, for purposes of property taxation, the allocation formula used to assess aircraft owned by certificated air .carriers and scheduled air taxis. This act revises the aircraft assessment formula to exclude (1) all time prior to an aircraft's first revenue flight and (2) ground time in excess of 12 consecutive hours. The provisions of Chapter 1169 are effective for the 1974-75 through 1979-80 fiscal years, after which time the specified exclusions from the formula become inoperative. Chapter 1169 also requires the Legislative Analyst to report to the Legislature on the economic and revenue effects of this exemption. This report discusses (1) provisions of Chapter 1169, (2) background information on the aircraft maintenance industry, (3) state reimbursements under Chapter 1169, and (4) economic impacts of the exemption.