We must also be realistic about our current tax system. California has a very progressive but volatile income tax that provides 70 percent of General Fund revenues. If we are to minimize the zigzag of spend-cut-spend that this tax system inevitably produces, we must build a very large reserve.
Even though the state could reap a huge windfall if the four health plans lose the case, Gov. Brown’s administration has sided with the plans, arguing that the 1968 case is being misapplied and that the state Legislature long ago determined these plans should be separately taxed and regulated. The lawsuit, the state’s attorneys warn, could disrupt California’s health care delivery system and cause consumers’ premiums to soar.
“We can see from where the numbers are going how it’s going to crowd out education and all the other California services, and it’s ultimately unsustainable,” said Rob Lapsley, president of the California Business Roundtable. “The governor has to address it now, and he’s been clear that he’s going to try to do that.”
California has a decades-long history of switching not only its entire budget but particular revenues and expenses back and forth between cash and accrual – and hybrids – in response to current fiscal and political conditions.
Especially muddy water from winter storms is among the factors that risk sweeping some of the world’s few remaining Delta smelt off course and into giant water pumps that draw water from the Sacramento-San Joaquin river deltas, U.S. Fish and Wildlife officials said.
The birds I’m talking about are programs, mostly worthwhile, that Sacramento previously enacted. Now they have to be paid for.
State taxation of multistate and multinational corporations is not an issue for the fainthearted.
Brown sounded a distinctly sour note on pending ballot measures that would extend taxes on high earners, raise the minimum wage to $15 per hour and finance billions in new school construction.
While proposing a $170.7 billion state budget for the 2016-17 fiscal year that begins on July 1, Brown stressed that the plan would continue to fill the rainy-day fund that voters, at his behest, adopted in 2014 as a buffer against a future economic downturn.
Brown called the proposal for a 12-year extension of Proposition 30, a temporary tax that expires in two years “fatally flawed” because it would prohibit diverting any of the money into the state’s rainy day fund for general state spending. Building up that reserve to cushion the impact of the next economic recession is one of Brown’s priorities, and Brown spent much of the press conference warning of the likelihood of another downturn. “If you don’t remember anything else, just remember, everything that goes up comes down,” Brown said. His proposed $122.6 billion general fund budget would add $2 billion to the rainy day fund, bringing the total to $8 billion.
Brown signaled a willingness to negotiate a new minimum wage increase – on top of the one that just took effect – but says the proposal to raise it to $15/hour would cost the state $4 billion.
A new study published by the Mercatus Center at George Mason University ranks each state’s readiness for an economic downturn based on the size of its rainy day savings fund and budget surplus.
Annual reports just issued by California’s two largest public pension funds indicate that the state added roughly $24 billion of unfunded public pension liability in fiscal year 2015.
The Governor’s Office of Business and Economic Development opened its application period on Monday for $75 million in California Competes tax credits.
The study from Beacon and Next 10, a California public policy research group, looked at annual census data going back to 1976. The numbers provide a state-by-state and national look at the number of business establishments that open or close in any given year, along with jobs tied to those companies.