December 17, 2019 - In this post, we describe some of the similarities and differences between taxes on cannabis and taxes on other products in California. Our estimates suggest that taxes on certain cannabis products are roughly comparable to taxes on distilled spirits but much higher than taxes on beer and wine. California’s state and local governments generally tax cannabis—including medical cannabis—more heavily than other medicines. In some instances, however, exemptions can make tax rates on medical cannabis comparable to tax rates on other medicines.
February 12, 2019 - Presented to: Assembly Health Committee, Assembly Budget Subcommittee No. 1 on Health and Human Services, Senate Committee on Health, and Senate Budget and Fiscal Review Subcommittee No. 3 on Health and Human Services
July 2, 2015 - Presented to Senate Committee on Public Health and Developmental Services Second Extraordinary Session
December 17, 2019 - In November 2016, California voters approved Proposition 64, which legalized the nonmedical use of cannabis (typically called recreational or adult use) and created a structure for regulating and taxing it. In this report we provide (1) background information on cannabis and its legalization in California, (2) a discussion of the effects of adjusting the tax rate, (3) an assessment of other potential changes to California’s cannabis tax structure, and (4) recommendations for the Legislature.
February 24, 2020 - In this report, we discuss issues for the Legislature to consider as it decides whether to change the state’s approach to taxing e‑cigarettes. We find that a tax based on nicotine content has some advantages. We also suggest that the Legislature consider a wide range of possible tax rates. Once the Legislature has chosen a rate, we recommend indexing the rate to inflation and revisiting it frequently to assess whether further adjustments are warranted. If the Legislature chooses to enact a new tax on e‑cigarettes, we recommend that it take an approach to revenue allocation that prioritizes flexibility.
July 9, 2015 - Presented to Assembly Committee on Public Health and Developmental Services Second Extraordinary Session
February 6, 2009 - To assist the Legislature in resolving the 2009‑10 budget gap, we developed a list of proposals that would raise more than $5 billion in each of 2009‑10 and 2010‑11. Our proposed options include eliminating or modifying 12 tax expenditure programs for a savings of $1.7 billion over the next two years. In general, these recommendations are based on our conclusion that these programs lack a strong rationale or are not sufficiently effective or efficient in achieving their stated goals. We also identify two targeted rate increases—increasing the vehicle license fee (VLF) to 1 percent and a three-year temporary PIT surcharge—that, combined, would raise $3.4 billion in 2009‑10 and $3.5 billion in 2010‑11. These options could be considered by the Legislature in lieu of any of the Governor’s revenue-related proposals. We believe these proposals have merit, both for tax policy reasons (for example, the VLF increase would result in all property in California taxed at the same rate) and for reducing the net impact of any rate increases on taxpayers (as both the VLF and PIT are deductible for federal tax purposes).
November 10, 2020 - In 2019 the Legislature passed and the Governor signed Chapter 120 (SB 200, Monning) establishing the Safe and Affordable Drinking Water (SADW) Fund, which provides up to $130 million annually for efforts to provide safe drinking water for every California community. The legislation tasked the State Water Resources Control Board (SWRCB) with administering the funding and overseeing efforts to implement both short‑ and long‑term solutions to persistent drinking water problems. One year later, SWRCB has made good progress in establishing spending priorities, beginning to allocate funds and execute projects, and collecting essential data to identify the communities that should be targeted for improvements. However, the state is still in the very early stages of implementation. Given the serious threats to public health, safety, and environmental justice posed by existing drinking water deficiencies, the Legislature will want to continue conducting robust oversight over how efforts to rectify these conditions proceed.
February 14, 2019 - In this report, we assess several of the Governor’s budget proposals in the natural resources and environmental protection areas. Based on our review, we recommend various changes, as well as additional legislative oversight. We provide a complete listing of our recommendations at the end of this report.