Tempered Expectations

Dec 9, 2019 - General Fund reliance on the personal income tax —and thus on capital gains-related income taxes in particular —has increased. Consequently, from a fiscal standpoint, the state could see revenue shortfalls commensurate with or greater than past recessions, especially if it were accompanied by a stock market correction.
https://lao.ca.gov/Publications/Report/4122

Fiscal Outlook: In-Home Supportive Services (IHSS)

Nov 15, 2017 - Under current law, the MCO tax is set to expire at the end of  2018 ‑19. Given this expected expiration of the MCO tax, our outlook projections assume that the General Fund support for the restoration of service hours will not be included beginning in  2019 ‑20.
https://lao.ca.gov/Publications/Report/3712

Fiscal Outlook: Medi-Cal

Nov 15, 2017 - Expiration of Managed Care Organization (MCO) Tax Current MCO Tax. The current MCO tax is assessed on a large number of managed care plans in the state. Revenues from the MCO tax, which leverage federal funding for Medi-Cal, provide a substantial General Fund offset —an estimated $1.8  billion in 2017-18.
https://lao.ca.gov/Publications/Report/3715

The 2021-22 Budget: Multiyear Budget Outlook

May 23, 2021 - Under our estimates, recent gains in revenues —particularly from taxes on higher income earners —would persist and continue to grow close to the historical average rate. (For more discussion of our assumptions, please see: The 2021‑22 Budget: May Revenue Outlook .)
https://lao.ca.gov/Publications/Report/4437

Federal Spending in California

Jan 18, 2017 - Finally, this category includes the refundable portion of two major tax credits: the Earned Income Tax Credit (EITC), which provides a refundable tax credit to low- to moderate-income working individuals and couples; and the Child Tax Credit, which provides refundable tax credits to eligible low-income families with children.
https://lao.ca.gov/Publications/Report/3531/3

The 2018-19 May Revision: LAO Multiyear State Budget Outlook

May 17, 2018 - LAO Estimates Assume No Reduction in Sales Tax Rates. California has two statutes that trigger reductions in the state ’s sales tax rate if balances in the SFEU reach a certain threshold. Under either statute, the state ’s sales tax rate automatically would decline by one-quarter cent for one calendar year, equal to around $1.7  billion, reducing the SFEU by the same amount.
https://lao.ca.gov/Publications/Report/3843

The 2016-17 Budget: Initial Comments on the Governor’s May Revision

May 15, 2016 - In addition, the MCO tax package prefunds retiree health benefits on a one-time basis and includes ongoing tax relief for certain MCO-related taxpayers. In 2016-17, spending associated with these commitments (including the tax relief) totals about $1 billion.
https://lao.ca.gov/Publications/Report/3460

The 2019-20 Budget: Overview of the Governor's Budget

Jan 14, 2019 - Based on the recent federal approval of a similar tax in Michigan, federal approval of a reauthorized California MCO tax appears likely. Despite this development, the administration did not propose an extension of the MCO tax in 2019 ‑20, forgoing over $ 1  b illion in General Fund benefit.
https://lao.ca.gov/Publications/Report/3916

The 2018-19 Budget: Initial Comments on the May Revision

May 12, 2018 - In large part, this reflects the administration’s projected increase between 2017 and 2019 in the share of income earned by higher income households (who pay higher tax rates under California’s graduated tax structure).
https://lao.ca.gov/Publications/Report/3832

The 2017-18 Budget: California Spending Plan

Oct 18, 2017 - The 2017 ‑18 budget expands the state Earned Income Tax Credit to taxpayers with self ‑employment income and to include taxpayers with incomes up to $22,300, significantly increasing the number of taxpayers eligible to claim the tax credit.
https://lao.ca.gov/Publications/Report/3694/1