02/23/2018

News

How to Restore Financial Sustainability to Public Pensions

The report from the League of California Cities includes a section entitled “What Cities Can Do Today.” This section merits a read between the lines: . . . 2 – “Consider local ballot measures to enhance revenues: Some cities have been successful in passing a measure to increase revenues. Others have been unsuccessful. Given that […]

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Cap and trade is looking more and more like a tax

The money that’s paid to the state for these permits looks a lot like a tax. But a state appeals court ruled that it’s not a tax, because it’s not compulsory. Any business that doesn’t want to pay it, the court reasoned, could simply go out of business. Now you know why other states don’t […]

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Marriage Penalties and Bonuses under the Tax Cuts and Jobs Act

• Marriage bonuses can be as high as 21 percent of a couple’s income, and marriage penalties can be as high as 12 percent of a couple’s income.

• While research shows that marriage penalties and bonuses do not have much effect on whether a couple will marry, they do impact how much each spouse works.

• It is possible to completely eliminate both marriage penalties and bonuses, but it would require a significant overhaul of the tax code that drastically changes the current distribution of income taxes paid.

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New pension plan will squeeze California cities

California cities struggling with recent hikes in their pension fees will see another one in 2021 because of a decision CalPERS made on Tuesday to speed up the rate of their debt payments. The change will save cities money over time, but it could squeeze local government budgets over the next few years because it […]

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Boom and Gloom: An Economic Warning for California

The United States is on track to achieve the second-longest economic expansion in its history. Unemployment is at a 17-year low. And California’s state budget has a multibillion-dollar surplus. So why is its longtime governor, Jerry Brown, issuing prophecies of doom? . . . Mr. Brown’s statements highlight California’s distinction as a state of high […]

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What Can Go Wrong with Trump’s Infrastructure Plan? Look to California

To see how bad decisions can be, look at California, a state which once led in economically critical infrastructure but now striving to present the worst possible example. Over the past two decades, California has become among the states least committed to new infrastructure, despite absurdly high tax levels. And when the spigot has been […]

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California has a plan to skirt the GOP tax law. IRS veterans say it is likely doomed.

California’s plan to shield residents from a tax hike under President Trump’s tax plan is likely to fail, said seven former high-ranking Internal Revenue Service and Treasury Department officials. The proposal, passed by the state Senate last month, is seen as a test case for blue states trying to help their taxpayers avoid a giant […]

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Safety Net Plays Key Role in Reducing Poverty

How does this relate to the safety net? With stagnant earnings since 1980, safety net resources become an even more important factor in making ends meet as cost of living increases. Our estimates show that major safety net program benefits play a critical role in mitigating poverty. The California poverty rate would be 8 points […]

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California families are missing out on tax credit

The federal and state tax credits provide the largest cash payment many families will receive in a year – money that can go toward repaying debt, building savings or buying goods and services that support economic growth. Yet each year, California residents leave approximately $2 billion in tax credits on the table, with one of […]

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State lawmakers want to restore an urban renewal and affordable housing program. But it’s complicated

Still, the loss of redevelopment has left funding holes that haven’t been filled, particularly for low-income housing. Since redevelopment’s dissolution, the state has approved spending from its cap-and-trade environmental program and implemented a new real estate transaction fee to subsidize the development of low-income housing. Those efforts, however, are generating less money than the $1-billion-a-year […]

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Californians voted to spend billions on more water storage. But state government keeps sitting on the cash

We could be headed into another drought. There’s little Sierra snow and valleys are dry. Is California ready this time? Not really. Good signs: There’s still a lot of water stashed in reservoirs from last year’s abnormally wet winter. And we’ve become better at using less water in our homes and yards. One very bad […]

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California tax revenues far exceed expectations for second month in a row

California’s tax revenues far exceeded expectations in January for the second consecutive month, but it remains to be seen how much of the excess reflects underlying strength in the economy, versus people speeding up their 2017 state income tax payments while they were still fully deductible on federal tax returns. State income tax revenues for […]

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When do CalPERS rates become ‘unsustainable’?

At the League news conference a reporter’s request for a definition of “unsustainability” was answered by Daniel Keen, a former Vallejo city manager with two decades of experience in five cities. The ability to absorb rising pension costs varies from city to city, Keen said, but one thing unsustainable for all is the erosion of […]

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Cities should fess up about taxes and pensions

Renewal of Sacramento’s expiring half-cent tax would cover perhaps half of the projected increase in annual pension costs, but crowd out other services the tax now finances. Were voters to double it to a full cent, virtually every new dollar it generated would be needed to pay increased CalPERS demands. Asking voters to raise taxes […]

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State and Local Sales Tax Rates 2018

California has the highest state-level sales tax rate, at 7.25 percent. Four states tie for the second-highest statewide rate, at 7 percent: Indiana, Mississippi, Rhode Island, and Tennessee. The lowest non-zero, state-level sales tax is in Colorado, which has a rate of 2.9 percent. Five states follow with 4 percent rates: Alabama, Georgia, Hawaii, New […]

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