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.
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.
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.
February 20, 2024 - We analyze the Governor's proposals for new spending at the Governor's Office of Business and Economic Development.
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.
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.
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.)
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.
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.
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.
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.
January 14, 2019 - This report presents our office’s initial assessment of the Governor’s Budget. The budget’s position continues to be positive. With $20.6 billion in discretionary resources available, the Governor’s budget proposal reflects a budget situation that is even better than the one our office estimated in the November Fiscal Outlook. The Governor’s Budget allocates nearly half of these discretionary resources to repaying state liabilities. Then, the Governor allocates $5.1 billion to one-time programmatic spending, $3 billion to reserves, and $2.7 billion to ongoing spending. Although the Governor’s allocation to discretionary reserves represents a smaller share of resources than recent budgets, the Governor’s decision to use a significant share of resources to pay down state debts is prudent. The Governor’s ongoing spending proposal is roughly in line with our November estimate of the ongoing capacity of the budget under an economic growth scenario. This was just one scenario, however. Recent financial market volatility indicates revenues could be somewhat lower than either we or the administration estimated.
February 8, 2021 - This report analyzes the Governor’s major budget proposals for the California Student Aid Commission, including proposals to expand the Cal Grant program and increase financial aid application rates.
March 18, 2025 - The Governor’s budget includes several proposals under the Governor’s Office of Business and Economic Development (GO-Biz). In this post we evaluate and provide recommendations for three of these proposals: California Competes Grants, California Regional Initiative for Social Enterprises Grant Program, and CHIPS.