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January 5, 2009 - This report was prepared pursuant to Chapter 844, Statutes of 2004 (SB 1534, Johnson) which expands the income eligibility criteria for use of the 540 2EZ tax form in filing resident personal income taxes (PITs). The measure also requires the Legislative Analyst’s Office to study the impact of the law change.
November 20, 2008 - The state’s struggling economy has severely reduced expected revenues. Combined with rising state expenses, we project that the state will need $27.8 billion in budget solutions over the 2008-09 and 2009-10 fiscal years. The state’s revenue collapse is so dramatic and the underlying economic factors are so weak that we forecast huge budget shortfalls through 2013-14 absent corrective action. From 2010-11 through 2013-14, we project annual shortfalls that are consistently in the range of $22 billion. Closing a projected $28 billion budget shortfall will be a monumental task. We believe the Legislature must take major ongoing actions by both reducing base spending and increasing revenues. If the Legislature has any hope of developing a fiscally responsible 2009–10 budget, it must begin laying the groundwork now.
July 24, 2008 - Submitted Pursuant to Chapter 868, Statutes of 2004 (AB 263, Oropeza)
April 7, 2008 - Presented to: Assembly Revenue and Taxation committee
February 27, 2008 - Presented to Senate Revenue and Taxation Committee
February 20, 2008 - The Governor’s budget includes almost no new revenue-raising proposals. Given the magnitude of the budget problem, we examine the state’s existing tax structure in the same way as the spending side--with an eye towards reducing inefficient or ineffective provisions. In this section, we discuss proposals that look at the revenue side of the budget. In so doing, we have applied the same approach as with direct spending programs--that is, we have examined tax-related provisions referred to as tax expenditure programs (TEPs)--and recommended changes to those that are not achieving their stated purposes or are of a lower priority.
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.
November 14, 2007 - In order to balance the 2008–09 budget, the state will have to adopt nearly $10 billion in solutions. Addressing the state’s current budget problem is even more urgent because we forecast a continuing gap between revenues and expenditures. A plan to permanently address the state’s fiscal troubles must involve a substantial portion of ongoing solutions. This is not only because of the persistent operating deficits projected throughout the forecast, but also because of the downside risks inherent with the economy, General Fund revenue volatility, and a wide range of budgetary uncertainties. Making tough choices now will allow the state to move closer to putting its fiscal woes in the past.
November 1, 2007 - Presented to: Assembly Banking and Finance Committee
October 3, 2007 - Presented at the Public Policy Institute of California October 3, 2007, Debt Conference
August 21, 2007 - Presented to the Senate Banking, Finance and Insurance Committee.