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The Definition of Qualified Capital Outlay for the State Appropriations Limit


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The 2021-22 California Spending Plan: The State Appropriations Limit

August 30, 2021 - This post describes the legislative and administrative decisions regarding the State Appropriations Limit (SAL) in the 2021‑22 budget process.

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The State Appropriations Limit

April 21, 2021 - This report: (1) describes how appropriations limits work for the state, school districts, and local governments in California; (2) explains why the limit is a constraint for state government; and (3) concludes with a variety of short- and long-term policy options—both of which we think the Legislature will need to take—in response to the issue.

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The 2022-23 Budget: Initial Comments on the State Appropriations Limit Proposal

February 4, 2022 - This post provides our office’s initial analysis on and comments about the Governor’s proposals to address state appropriations limit (SAL) requirements in the 2022-23 Governor’s budget.

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The 2022-23 California Spending Plan: The State Appropriations Limit

September 30, 2022 - This post describes the legislative and administrative decisions regarding the State Appropriations Limit (SAL) in the 2022‑23 budget process.

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[PDF] The 2022-23 Budget: Initial Comments on the Governor's May Revision

May 16, 2022 - On May 13, 2022, Governor Newsom presented a revised state budget proposal to the Legislature. (This annual proposed revised budget is called the “May Revision.”) In this brief, we provide a summary of the Governor's revised budget, focusing on the overall condition and structure of the state General Fund—the budget's main operating account. In the coming days, we will analyze the plan in more detail and provide additional comments in hearing testimony and online. The information presented in this brief is based on our best understanding of the administration's proposals as of 11:00 AM, May 14, 2022. In many areas of the budget, this understanding will continue to evolve as we receive more information. We only plan to update this brief for very significant changes (that is, those greater than $500 million).

Update (5/20/22): Updated to reflect information about state appropriations limit (SAL) excluded spending and other budget proposals.

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[PDF] An Analysis of Proposition 4: The Gann "Spirit of 13" Initiative

December 1, 1979 -

On November 6, 1979, California voters overwhelmingly approved Proposition 4, the "Spirit of 13" Initiative sponsored by Paul Gann. The proposition, which places Article XIIIB in the California Constitution, limits the growth in appropriations of both state and local governments to changes in the cost of living and population in order to control the spending levels established by California governments. Proposition 4 also attempts both to clarify the fiscal roles played by the various branches (legislative, judicial and executive) and levels (federal, state and local) of government, and to insure that any surplus funds are promptly returned to the people.

Proposition 4 is a sweeping measure which will dramatically affect both the state government and the vast majority of California's 6,600 local governments. Precisely how it will affect these governments, though, is not clear because the measure raises many questions and problems regarding how it is to be interpreted.

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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 2022-23 Budget: State Appropriations Limit Implications

March 30, 2022 - This brief estimates the condition of the budget over the multiyear taking state appropriations limit requirements into consideration.

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The 2018-19 Budget: Governor's Gann Limit Estimates

April 6, 2018 - The State Constitution limits how much the Legislature can spend from tax revenues. The administration’s 2018-19 budget proposal reflects increased “room” under this limit—essentially spending capacity—of roughly $6 billion over June 2017 levels. Notably, the administration revised its approach for estimating costs to comply with federal and court mandates, which are excluded from the limit. We find that the mandates approach is inconsistent with the implementation of the spending limit because the administration reflects costs from any mandate whereas only costs resulting from mandates imposed after 1978-79 should be excluded from the limit. We recommend the Legislature direct the administration to revise its approach going forward to be consistent with the limit, which conceivably could increase or decrease room under the limit. In addition, we make several additional recommendations that would reduce room under the limit by several billion dollars.

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[PDF] Report on the 1988-89 Tax Expenditure Budget: Overview and Selected Reviews

December 1, 1988 - The purpose of this report is to provide information which will assist the Legislature in reviewing the state's tax expenditure budget, including making decisions regarding which individual TEPs should be retained, renewed, modified, or eliminated.

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The 2020-21 May Revision: Revenue Proposals in the 2020-21 May Revision

May 20, 2020 - The May Revision includes a number of revenue-related proposals. This post describes these proposals and offers our initial comments and recommendations. We also offer alternative revenue options that the Legislature could consider.

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The 2021-22 Budget: Initial Comments on the Governor’s May Revision

May 17, 2021 - On May 14, 2021, Governor Newsom presented a revised state budget proposal to the Legislature. (This annual proposed revised budget is called the “May Revision.”) In this post, we provide a summary of the Governor’s revised budget, focusing on the overall condition and structure of the state General Fund—the budget’s main operating account. In the coming days, we will analyze the plan in more detail and provide additional comments in hearing testimony and online.

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[PDF] The 2022-23 Budget: Analysis of the Governor’s Major Behavioral Health Proposals

March 3, 2022 - This brief analyzes the Governor’s three major behavioral health budget proposals. We include analyses of the Governor’s proposals to (1) provide funding for behavioral health bridge housing, (2) provide funding to implement certain solutions developed by the felony incompetent to stand trial solutions workgroup, and (3) add mobile crisis intervention services as a new Medi-Cal benefit.

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The 2022-23 Budget: Office of Planning and Research Higher Education Proposals

May 10, 2022 - The Office of Planning and Research (OPR) is tasked by state law to support statewide planning and research activities. Among its many activities, the office has overseen certain higher education initiatives. This post analyzes three higher education OPR proposals in the Governor’s January budget for 2022‑23 related to the California Education Learning Laboratory, the Golden State Awards, and Carnegie Science.

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[PDF] Housing-Related Tax Expenditure Programs

March 18, 2013 - Presented to Assembly Revenue and Taxation, and Housing and Community Development Committees

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[PDF] 2008-09 Budget: Perspectives and Issues

February 20, 2008 - 2008-09 Budget: Perspectives and Issues

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The 2022-23 Budget: The Governor’s Homelessness Plan

February 9, 2022 - This brief provides an update on some major recent state budget actions related to homelessness, describes the Governor’s homelessness budget proposals, and raises issues for the Legislature’s consideration.