Back to the Report

More publications like . . .

The 2018-19 Budget: California Hiring Tax Credits


Report

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.

Report

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.

Report

The 2019-20 Budget: Analysis of the Department of Social Services Budget

February 22, 2019 - In this report, we evaluate the Governor's major human services budget proposals for programs administered by the Department of Social Services, including the California Work Opportunities and Responsibility to Kids (CalWORKs), the Supplemental Security Income/State Supplementary Payment (SSI/SSP), the In-Home Supportive Services (IHSS), and foster care.

Report

The 2020-21 Budget: Expanding the Minimum Franchise Tax Exemption

March 23, 2020 - In this budget analysis brief, we provide background information on the current tax expenditure and assess the merits of the administration’s proposal to expand it. We conclude that the Legislature should reject the Governor’s proposal. We further suggest the Legislature reconsider the current exemption.

Report

The 2019-20 Budget: Analysis of Proposed Earned Income Tax Credit Expansion

March 6, 2019 - The state adopted an EITC in 2015 and expanded it in 2017 and 2018. The Governor proposes another expansion starting in 2019 that would (1) extend the income eligibility range to $30,000, (2) increase the credit amount for workers with dependents under age six, and (3) increase the credit amount for workers with earnings at the higher end of the current eligibility range. This report evaluates the Governor’s proposal, discusses potential alternative approaches, and examines implementation issues and options for providing credits on a monthly basis.

Report

The 2018-19 Budget: Overview of the Governor's Budget

January 12, 2018 - This publication is our office’s initial response to the Governor’s 2018-19 budget. In the proposed plan, the Governor places a high priority on building reserves, proposing a total reserve balance of nearly $16 billion. We believe the Governor’s continued focus on building more reserves is prudent in light of economic and federal budget uncertainty. In addition to building reserves, the Governor’s proposed budget allocates sizeable funding increases available within the constitutionally required guarantee for schools and community colleges and supports a variety of new infrastructure projects. This report also discusses how new federal tax changes may affect state revenues and reasons why we believe there could be more resources available in May.

Report

The 2019-20 Budget: Analysis of the Department of Developmental Services Budget

February 25, 2019 - In this report, we evaluate the Governor's budget proposals for the Department of Developmental Services (DDS). The proposed 2019-20 DDS budget is projected to reach $7.8 billion ($4.8 billion General Fund), with the caseload of individuals with developmental disabilities served mostly in community-based programs projected to reach nearly 350,000. The total increase in spending is offset somewhat by declining spending on general treatment Developmental Centers, which are scheduled to close by the end of 2019. The Governor's budget proposes to reorganize DDS, based in part on these closures as well as on DDS’ evolving responsibilities as it serves individuals in community settings and adjusts to meeting related upcoming federal requirements that significantly impact the service delivery model. The budget also proposes enhancement of "safety net" and crisis services for individuals in crisis and at risk of displacement from their regular homes or needing temporary residential placements.

Correction (3/6/19): Safety net and crisis home capacity numbers have been updated in Figure 4.

Report

The 2019-20 Budget: Tax Conformity

March 6, 2019 - The 2017 federal Tax Cuts and Jobs Act made significant changes to federal tax laws. Generally, the federal tax changes reduced tax rates and broadened the tax base (what is subject to tax). Because the state’s income tax laws closely refer to large portions of federal law, many of those changes created new differences between federal and state taxes. State law currently does not adopt—or conform to—any of the federal changes made in 2017. This report assesses the arguments for and against conforming to ten of those major changes. (Five of these conformity provisions are included in the Governor's proposal.)

Report

The 2020-21 Budget: Department of Social Services

February 24, 2020 - This brief provides information, analysis, and key issues to consider in evaluating the Governor’s 2020-21 budget proposals for the major programs in Department of Social Services.

Report

The 2020-21 Budget: Higher Education Analysis

February 20, 2020 - In this report, we analyze the Governor’s higher education budget proposals. Similar to last year, these proposals are wide ranging—including large base increases; targeted increases for apprenticeship programs and food pantries; one-time initiatives relating to extended education programs, work-based learning, faculty diversity, and animal shelters; and many facility projects.

Report

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.

Report

The 2020-21 Budget: Initial Comments on the Governor’s May Revision

May 17, 2020 - On May 14, 2020, Governor Newsom presented a revised state budget proposal to the Legislature. In this post, we provide an overview of the overall budget condition under the May Revision estimates and proposals; the major actions the Governor took to close an estimated $54 billion budget gap; and give our initial comments on this budget package.

Report

The 2018-19 Budget: Criminal Justice Proposals

February 27, 2018 - The Governor’s budget proposes a total of $17.2 billion from various fund sources for judicial and criminal justice programs in 2018‑19. This is an increase of $302 million, or 2 percent, above estimated expenditures for the current year. The budget includes General Fund support for judicial and criminal justice programs of $13.9 billion in 2018‑19, which is an increase of $270 million, or 2 percent, over the current‑year level. In this report, we assess many of the Governor’s budget proposals in the judicial and criminal justice area and recommend various changes. We provide a complete listing of our recommendations at the end of the report.

Report

The 2018-19 Budget: Analysis of the Health and Human Services Budget

February 16, 2018 - In this report we provide a broad overview of the Governor's health and human services budget, highlighting major year-over-year changes. We then provide a more in-depth analysis of select programmatic areas.

Report

[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.

Report

The 2019-20 Budget: Proposition 98 Outlook

November 14, 2018 - In this report, we examine how the minimum guarantee might change over the next several years and discuss the factors likely to be driving those changes. We then examine key aspects of district budgets—focusing on the main cost pressures facing districts over the next several years.

In addition to this report, you can find the main California's Fiscal Outlook report along with a collection of other fiscal outlook material on our fiscal outlook budget page.