An Update on California’s Cash Management Situation

Aug 31, 2020 - The preferred source for comparing budget projections to cash actuals are Agency cash reports, for example, as displayed on the LAO Economy and Taxes Blog .) Significant Federal Reimbursements for COVID-19 Direct Expenditures Anticipated in 2020-21.
https://lao.ca.gov/Publications/Report/4266

The 2020-21 Budget: Initial Comments on the Governor’s May Revision

May 17, 2020 - Uses Federal Funds Coronavirus Relief Fund (CRF) Provides Funding for COVID ‑19 ‑Related Expenditures. Congress recently established the CRF to provide money to state, local, tribal, and territorial governments for “necessary expenditures incurred due to the public health emergency with respect to the Coronavirus Disease 2019 ” that are incurred between March  1 and December 30, 2020.
https://lao.ca.gov/Publications/Report/4232

The 2020-21 Budget: California's Spring Fiscal Outlook

May 8, 2020 - First, reserves will reduce the need for expenditure reductions or revenue increases —every dollar of reserves held today is a dollar in one ‑time programmatic cuts that can be avoided. Second, reserves allow the state to phase in reductions to expenditures more slowly, reducing their potential impact during the most acute period of the public health and economic crisis.
https://lao.ca.gov/Publications/Report/4228

The 2020-21 Budget: California's Spring Fiscal Outlook [Publication Details]

May 8, 2020 - Our outlook presents two potential scenarios—a somewhat optimistic “U-shaped” recession and a somewhat pessimistic “L-shaped” recession—and assumes a baseline level of expenditures. Under these two scenarios, the state would have to address an $18 billion or $31 billion budget problem.
https://lao.ca.gov/Publications/Detail/4228

State Funding Actions Related to COVID-19

Apr 20, 2020 - Figure 1 Tracking State Expenditures for COVID ‑19 Response (In Millions) Medical Equipment and Services, and Hospital and Other Medical Capacity DGS Medical supplies, surge capacity for hospitals and medical facilities, other expenses
https://lao.ca.gov/Publications/Report/4223

COVID-19 and California’s Evolving Fiscal Outlook

Mar 18, 2020 - Volatile Financial Markets Indicate Lower Capital Gains-Related Tax Revenue Taxes on capital gains are a significant source of state revenue. Even in “normal ” times, capital gains income is difficult to forecast because it correlates with stock market performance.
https://lao.ca.gov/Publications/Report/4203

Taking Stock of California’s Recession Readiness

Feb 12, 2020 - The state ’s operating position, which refers to its annual revenues relative to expenditures, also influences its fiscal resilience. When multiyear estimates show that revenues will exceed expenditures on a recurring basis, there is an operating surplus (when annual expenditures exceed ongoing revenues, there is an operating deficit).
https://lao.ca.gov/Publications/Report/4156

The 2020-21 Budget: Structuring the Budget

Feb 10, 2020 - Managed Care Organization (MCO) Tax Approved. After enacting the 2019 ‑ 20 b udget in June, the Legislature reauthorized the MCO tax in September. The MCO tax generates General Fund benefit by taxing enrollment in MCOs and using that revenue to offset General Fund costs in Medi ‑Cal.
https://lao.ca.gov/Publications/Report/4150

The 2020-21 Budget: Overview of the Governor's Budget

Jan 13, 2020 - Recently, corporation tax collections have grown faster than anticipated while personal income tax collections have grown somewhat slower. The administration assumes that this pattern will continue. This is because they attribute the pattern to partnerships, which are taxed under the personal income tax, changing to corporations in response to 2017 federal tax changes.
https://lao.ca.gov/Publications/Report/4135

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