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November 26, 2018 - Taxes on sugary drinks have become increasingly common in recent years. In June 2018, the Legislature passed a law (Chapter 61 of 2018 [AB 1838, Committee on Budget]) prohibiting local governments from levying such taxes (and other taxes on groceries) through 2030. The law stated the Legislature’s intent to regulate the imposition and collection of such taxes to the exclusion of local action. As such, the Legislature may face the following decisions: (1) Should the state levy an excise tax on sugary drinks? and (2) If so, how should the tax be designed? This report provides information and perspectives for the Legislature to consider as it weighs these choices.
October 15, 2018 - Presented to: Assembly Revenue and Taxation Committee and Senate Governance and Finance Committee
October 8, 2018 - Housing is very expensive in California—in early 2018, the typical California home cost $481,000, roughly double the price of the typical home in the United States. The state offers the Property Tax Postponement (PTP) Program to help certain homeowners afford their property taxes and stay in their homes. This report evaluates the advantages and shortcomings of the PTP and offers policy alternatives for legislative consideration.
June 26, 2018 - Presented to Senate Committee on Budget and Fiscal Review
May 31, 2018 - To be present to: Budget Conference Committee
May 22, 2018 - This post describes the Proposition 55 calculation for Medi-Cal spending in the Governor’s May Revision.
May 14, 2018 - The 2018-19 May Revision proposes to expand the state’s Earned Income Tax Credit. In this post, we describe and comment on the proposal.
May 12, 2018 - In this report, we discuss our new revenue outlook for the state, released as part of our response to the Governor's 2018-19 May Revision.
May 12, 2018 - In this report, we discuss our new economic outlook for the state, released as part of our response to the Governor's 2018-19 May Revision.
May 8, 2018 - This post explains a grant program that provided funds for education and outreach related to the state earned income tax credit (EITC) and provides comments on how the Legislature might prioritize any future state-funded EITC outreach activities.
April 12, 2018 - The state and local governments collected about $220 billion in tax revenue in 2015‑16—equal to nearly 10 percent of the California economy. The personal income tax is the state's main revenue source, the property tax is the major local tax, and the state and local governments both receive revenue from the sales and use tax. In addition, many smaller taxes raise revenue for state and local government operations. This visual guide explains California's tax system using over 40 data visualizations. The report examines various characteristics of the tax system including what items are taxed, who pays the taxes, and how taxes are used.
April 10, 2018 - Presented to: Assembly Budget Subcommittee No. 4 on State Administration
April 6, 2018 - The State Constitution limits how much the Legislature can spend from tax revenues. The administration’s 2018-19 budget proposal reflects increased “room” under this limit—essentially spending capacity—of roughly $6 billion over June 2017 levels. Notably, the administration revised its approach for estimating costs to comply with federal and court mandates, which are excluded from the limit. We find that the mandates approach is inconsistent with the implementation of the spending limit because the administration reflects costs from any mandate whereas only costs resulting from mandates imposed after 1978-79 should be excluded from the limit. We recommend the Legislature direct the administration to revise its approach going forward to be consistent with the limit, which conceivably could increase or decrease room under the limit. In addition, we make several additional recommendations that would reduce room under the limit by several billion dollars.
April 4, 2018 - In 2017, the Legislature passed two laws that made major changes to tax administration and appeals in California. Prior to these laws, the Board of Equalization (BOE) had administrative and appeals responsibilities for many taxes and fees. The laws created two new departments—the California Department of Tax and Fee Administration (CDTFA) and the Office of Tax Appeals (OTA)—and transferred most of BOE’s duties to these departments.
March 15, 2018 - In this report, we explain how the existing credit works and why so few taxpayers are claiming it. Then we describe and comment on the administration’s California Hiring Credit proposal, which would improve upon the existing credit in some respects. We conclude with some options for making more fundamental changes to the credit.