Building Permits Update: April 2021 [EconTax Blog]

Jun 9, 2021 - This is also the first time since 2007 that the state has had two straight months over 6,000 units. Single family activity has rebounded strongly since last spring ’s pandemic-driven slump, as prices have risen sharply in most of the state ’s metropolitan areas.
https://lao.ca.gov/LAOEconTax/Article/Detail/663

Examining California's Income Tax Withholding Growth by Sector [EconTax Blog]

Jun 9, 2021 - In contrast, manufacturing (which has 1.25 million employees in the state) is split among 21 different 3-digit NAICS codes, including the computer equipment and vehicles/aircraft subsectors that both made the top ten.
https://lao.ca.gov/LAOEconTax/Article/Detail/662

Involuntary Servitude [Ballot]

Jun 9, 2021 - The State Constitution specifies that, “Involuntary servitude is prohibited except to punish crime. ” However, the State Constitution does not define involuntary servitude. Proposal This measure amends the State Constitution to make involuntary servitude prohibited in all cases, including as a punishment for crime.
https://lao.ca.gov/BallotAnalysis/Initiative/2021-003

Cannabis Tax Revenue Update [EconTax Blog]

Jun 2, 2021 - The state levies two excise taxes on cannabis: a retail excise tax and a cultivation tax. Third Quarter of 2020-21: $163 Million. The administration currently estimates that retail excise tax revenue was $132 million and cultivation tax revenue was $31 million in the third quarter of fiscal year 2020-21 (January through March).
https://lao.ca.gov/LAOEconTax/Article/Detail/661

Income Tax Withholding Tracker: May 1 - May 28 [EconTax Blog]

May 28, 2021 - The final graph compares the state ’s year over year percent change in cumulative withholding in 2020-21 to the nation ’s withholding from the federal income tax, and shows that state collections have maintained a faster pace for months.
https://lao.ca.gov/LAOEconTax/Article/Detail/660

May 2021 Cap-and-Trade Auction Update [EconTax Blog]

May 28, 2021 - Based on the preliminary results , the state will receive an estimated $916 million in revenue from the auction. As shown in Figure 1, this amount is substantially more than what the state received from the February 2021 auction ($647 million).
https://lao.ca.gov/LAOEconTax/Article/Detail/659

New Business Creation by Sector [EconTax Blog]

May 27, 2021 - It uses national data, since sector data are unavailable at the state level.   The figure below s hows   U.S. Census  data for the three-month average of nationwide new business creation since 2019, considering only those businesses that report having planned wages as opposed to shell corporations or holding companies.
https://lao.ca.gov/LAOEconTax/Article/Detail/658

Despite Fiscal Forecasting Uncertainties, Multiyear Budget Planning Essential

May 27, 2021 - While the state ’s overall bond rating is a distillation of numerous individual factors —many of them exogenous —budget management is a category over which state officials have direct control. Proposition  2 (2014) enshrined in the State Constitution the Department of Finance ’s (DOF ’s) requirement to semiannually prepare a multiple-year General Fund forecast.
https://lao.ca.gov/Publications/Report/4443

Repaying the State’s Federal Unemployment Insurance Loan

May 26, 2021 - Employers pay both state and federal UI payroll taxes. State UI tax revenues are deposited into the state ’s UI trust fund to pay benefits to unemployed workers. State UI tax rates are set based on rate schedules laid out in state law.
https://lao.ca.gov/Publications/Report/4442

Repaying the State’s Federal Unemployment Insurance Loan [Publication Details]

May 26, 2021 - In this post, we (1) provide an overview of the state’s UI system financing, (2) highlight how the pandemic affected the UI system, (3) look ahead to upcoming costs to employers and the state to repay the federal UI loan, and (4) assess the Governor’s proposed $1.1 billion pre-payment.
https://lao.ca.gov/Publications/Detail/4442