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The 2018-19 Budget: California Competes Proposal


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[PDF] Assessing Recent Changes to California Competes

March 30, 2020 - California Competes is an economic development tax incentive program that allows the administration to negotiate tax credit agreements with individual companies that agree to meet multiyear hiring and investment targets. In this report we provide background information about the California Competes program and the changes that the Legislature made in 2018. Next, we describe the effects of these changes on the program in 2018‑19, the first year of their implementation. We then assess how the changes have affected the administration of the California Competes program and consider whether it is more or less effective than before. Lastly, looking forward, we suggest working to find ways to expand the pool of qualified applicants and advise the Legislature to continue its oversight of the program.

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[PDF] Review of the California Competes Tax Credit

October 31, 2017 - California Competes awards income tax credits to attract or retain businesses considering a significant new investment in California. In this report, we reviewed California Competes’ experience to date in meeting the Legislature’s goals for the program.

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The 2021-22 Budget: Business Tax Incentives

January 28, 2021 - The Governor’s budget proposes several changes to taxation to support businesses. Two key factors for evaluating these proposals are: (1) which level of government would forgo revenue; and (2) which businesses would receive assistance. Based on these criteria and others, we recommend that the Legislature prioritize expansion of the Main Street credit, explore alternative structures for an elective S Corporation tax, and reject the proposed one-time expansions of the CAEATFA exclusion and California Competes.

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The 2017-18 Budget: California Competes Tax Credit

February 27, 2017 - In this analysis, we discuss our findings and recommendations regarding the Governor's proposals regarding the California Competes tax credit program. This affects two departments: (1) the Governor's Office of Business and Economic Development (GO-Biz) and (2) Franchise Tax Board.

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The 2021-22 Budget: Overview of the Governor's Budget

January 10, 2021 - This report provides a brief summary and initial assessment of the proposed 2021-22 Governor’s Budget.

Correction 1/11/21: Totals for immediate and early action proposals have been corrected.

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The 2022-23 Budget: Governor’s Office of Business and Economic Development Proposals

February 11, 2022 - This post provides some background about the Governor’s Office of Business and Economic Development (GO-Biz), describes the Governor’s budget proposal for GO-Biz, and offers comments and issues for the Legislature to consider.

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The 2021-22 Spending Plan: Other Provisions

September 23, 2021 - This post discusses features of the state's spending plan that were not covered elsewhere in the 2021-22 Spending Plan series.

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[PDF] Perspectives on Legislative Oversight: Economic Development Activities

March 1, 2016 - Presented to: Assembly Committee on Jobs, Economic Development and the Economy

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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.

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The 2021-22 Budget: Overview of the Spending Plan (Final Version)

October 27, 2021 - Each year, our office publishes the California Spending Plan to summarize the annual state budget. This publication provides an overview of the 2021-22 Budget Act, then highlights major features of the budget approved by the Legislature and signed by the Governor.

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The 2019-20 May Revision: Opportunity Zones

May 11, 2019 - The Governor proposes to allow state tax benefits for investments in alternative energy or affordable housing in communities designated as Opportunity Zones under a new federal program. Given the mixed evidence regarding the benefits of similar policies and the existence of better mechanisms to fund affordable housing, we recommend rejecting the Governor’s proposal to create a state Opportunity Zone tax benefit.

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[PDF] California’s First Film Tax Credit Program

September 29, 2016 -

In this report, as required by law, we evaluate the economic effects and the administration of the first film tax credit program passed in 2009. We find that about one–third of the film and television projects receiving incentives under this program would probably have been made in California anyway. We suspect that this level of “windfall benefits” to some credit recipients may be low compared to other tax credits, which would suggest that the first film tax credit program targeted the types of production vulnerable to being filmed outside the state relatively well.

Also see these four short videos that highlight findings from this report.

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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.