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Assessing Recent Changes to California Competes


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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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[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 2018-19 Budget: California Competes Proposal

February 21, 2018 - The Governor proposes extending the California Competes tax credit for five years. We recommend rejecting the administration’s proposal to extend the California Competes tax credit because of problems that are inherent in and unavoidable for these types of programs. If the Legislature chooses to extend California Competes, we offer several suggestions that may alleviate some of its problems.

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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 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.

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The 2024-25 Budget: Governor's Office of Business and Economic Development

February 20, 2024 - We analyze the Governor's proposals for new spending at the Governor's Office of Business and Economic Development.

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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.

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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 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.

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Evaluating State Economic Stimulus Proposals

February 1, 2021 - In this report, we offer the Legislature guidance on how to evaluate fiscal stimulus proposals. We pose six key questions to ask when assessing specific proposals and provide specific elements that can be incorporated into proposals to increase their potential effectiveness.

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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.

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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.)

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The 2019-20 Budget: Considerations for the Governor's Housing Plan

February 20, 2019 - In this report, we describe the Governor’s proposed $1.75 billion appropriation for various programs aimed at improving the affordability of housing in the state. Specifically, the Governor proposes (1) providing planning and production grants to local governments, (2) expanding the state Low-Income Housing Tax Credit program, (3) establishing a new state housing tax credit program targeting relatively higher-income households, and (4) expanding a loan program for middle-income housing production.

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A Review of the State's Active Transportation Program

March 1, 2019 - The state’s Active Transportation Program (ATP)—administered by the California Transportation Commission (CTC), in coordination with the California Department of Transportation (Caltrans)—provides funding to infrastructure and non-infrastructure projects that facilitate travelers being physically active through biking and walking. Some of the primary goals of the program include increasing the number of walking and biking trips, increasing safety and mobility, and enhancing public health. In approving the 2018-19 budget package, the Legislature directed our office to review certain aspects of the program.

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The 2020-21 Budget: California Department of Food and Agriculture

February 28, 2020 - In this analysis we assess the Governor’s 2020‑21 budget proposals for the California Department of Food and Agriculture (CDFA). Specifically, we make recommendations regarding the Governor’s proposals to (1) fund a comprehensive assessment to identify solutions to the California Exposition and State Fair’s (Cal Expo) declining revenues and make available funding to offset near‑term deficiencies, and (2) establish a Fresno‑Merced innovation corridor to boost the region’s economy.