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Economy and Taxes Publications

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Report

Taxation of Sugary Drinks

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.

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Use Tax on Remote Sales

October 15, 2018 - Presented to: Assembly Revenue and Taxation Committee and Senate Governance and Finance Committee

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Evaluation of the Property Tax Postponement Program

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.

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Expands Requirement for Supermajority Approval to Enact New Revenue Measures. Initiative Constitutional Amendment.

June 26, 2018 - Presented to Senate Committee on Budget and Fiscal Review

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Major Actions on Tax Provisions

May 31, 2018 - To be present to: Budget Conference Committee

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The 2018-19 Budget: The Administration's Proposition 55 Estimates in the May Revision

May 22, 2018 - This post describes the Proposition 55 calculation for Medi-Cal spending in the Governor’s May Revision.

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The 2018-19 Budget: The May Revision—State Earned Income Tax Credit Expansion

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.

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The 2018-19 May Revision: LAO Revenue Outlook

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.

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The 2018-19 May Revision: LAO Economic Outlook

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.

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The 2018-19 Budget: California Earned Income Tax Credit Education and Outreach

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.

Report

California's Tax System: A Visual Guide

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.

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Overview of State EITC Education and Outreach Activities

April 10, 2018 - Presented to: Assembly Budget Subcommittee No. 4 on State Administration

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The 2018-19 Budget: Governor's Gann Limit Estimates

April 6, 2018 - The State Constitution limits how much the Legislature can spend from tax revenues. The administration’s 2018-19 budget proposal reflects increased “room” under this limit—essentially spending capacity—of roughly $6 billion over June 2017 levels. Notably, the administration revised its approach for estimating costs to comply with federal and court mandates, which are excluded from the limit. We find that the mandates approach is inconsistent with the implementation of the spending limit because the administration reflects costs from any mandate whereas only costs resulting from mandates imposed after 1978-79 should be excluded from the limit. We recommend the Legislature direct the administration to revise its approach going forward to be consistent with the limit, which conceivably could increase or decrease room under the limit. In addition, we make several additional recommendations that would reduce room under the limit by several billion dollars.

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The 2018-19 Budget: California’s New Tax Departments

April 4, 2018 - In 2017, the Legislature passed two laws that made major changes to tax administration and appeals in California. Prior to these laws, the Board of Equalization (BOE) had administrative and appeals responsibilities for many taxes and fees. The laws created two new departments—the California Department of Tax and Fee Administration (CDTFA) and the Office of Tax Appeals (OTA)—and transferred most of BOE’s duties to these departments.

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The 2018-19 Budget: California Hiring Tax Credits

March 15, 2018 - In this report, we explain how the existing credit works and why so few taxpayers are claiming it. Then we describe and comment on the administration’s California Hiring Credit proposal, which would improve upon the existing credit in some respects. We conclude with some options for making more fundamental changes to the credit.

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
 
Nick Schroeder
(916) 319-8314
Public Employment, CalPERS, Elections, Veterans Affairs
 
Brian Uhler
(916) 319-8328
Deputy Legislative Analyst: Economy, Taxes, and Labor
 
Seth Kerstein
(916) 319-8365
Sales and Excise Taxes and Demographics