California Economy and Taxes

November 2022 Cap-and-Trade Auction Update December 14, 2022

Based on the preliminary results, the state will receive an estimated $961 million in revenue from the most recent quarterly cap-and-trade auction held on November 16, 2022. 

Unemployment Claims Tracker December 9, 2022

Despite worrying signs in some parts of the economy, the labor market remains steady. Seasonally adjusted weekly UI claims held steady over the last several months at between 40,000 and 50,000 claims per week. This level is in-line with UI claims seen during periods of sustained economic growth.

Cannabis Tax Revenue Update November 18, 2022

Cannabis tax revenues have declined for five straight quarters. One part of last quarter’s revenue decline is the lost revenue from the recently eliminated cultivation tax. Despite this policy change, revenues from the retail excise tax declined faster than ever before, indicating that other factors continue to drive down revenues. 

October Tax Collections  November 17, 2022

Although October colletions from the state's “big three” tax revenues—personal income, corporation, and sales taxes—came in far ahead of Budget Act assumptions, this is not indicative of better than expected revenue performance for 2022-23 overall. Instead, a closer look at the data shows that the recent trend of revenue weakness continued in October. 

Why Has Income Tax Withholding Lagged, Despite Job Growth? November 16, 2022

2022-23 California income tax withholding is running about 2 percent below last year, despite relatively strong job growth and wage gains that typically drive withholding trends. In this post, we take a closer look at this divergence and explain how smaller employment bonuses and limited IPO activity likely are causing recent weakness in tax withholding. 

How Does the October Inflation Report Change Our Outlook? November 16, 2022

While it was a positive development, the October inflation report did not significantly alter our assessment that there is a high risk of inflation remaining elevated in the budget year and beyond. 

U.S. Retail Sales Update: October 2022 November 16, 2022

U.S. retail sales (seasonally adjusted) grew 1.3 percent from September to October. 

U.S. Retail Sales Update: August 2022 September 15, 2022

U.S. retail sales (seasonally adjusted) grew 0.3% from July to August. 

Income Tax Witholding Tracker: August 2022 September 1, 2022

August state income tax withholding was down $450 million (6.1 percent) compared to last year. 

California's Cooling Housing Market August 30, 2022

California's housing market boomed during much of the pandemic, but it started to cool this spring. Over the last few months, sales prices and sales activity have declined notably. 

Cannabis Tax Revenue Update August 22, 2022

Cannabis tax revenues have declined substantially for three straight quarters. 

July 2022 Jobs Report August 22, 2022

California added 84,800 jobs in July, about twice the level of recent months. Job gains for June were revised upward as well, from 19k to 37k.

U.S. Retail Sales Update: July 2022 August 17, 2022

U.S. retail sales (seasonally adjusted) remained nearly unchanged from June to July. 

IRS Migration Data Shows Increased Movement in 2020 August 16, 2022

New IRS data on taxpayer migration during the first year of the pandemic shows an uptick of movement between California and other states, as well as within California. 

Income Tax Witholding Tracker: July 2022 August 5, 2022

California income tax withholding collections were $90 million (1 percent) lower in July compared to last year.