Californians carried the nation’s fourth highest state and local tax burden in 2011, the Tax Foundation says in a new report, largely because its personal incomes are markedly lower than those of other high-tax states.
CalSTRS said Thursday that its long-term funding shortfall has risen to $73.7 billion, a stark reminder of the financial issues facing the teachers’ pension fund.
An Assembly resolution against government contracting is drawing fire from local governments and business groups for what they contend is a pledge against giving work to outside interests.
While California’s economy is surging to a record, the plight of Placentia shows how a financial misstep can imperil municipalities facing rising costs for retirees and infrastructure. The community of 52,000 exhausted most of its reserves on a failed railroad project. Southern California’s Adelanto and Upland are also fighting to avert insolvency.
Commissioned by the Southern California Association of Governments to examine the Golden State’s $100 million annual tax program, the report found an 11 percent return on investment in the program’s first three years.
WalletHub analyzed how state and local tax rates compare to the national median in the 50 states as well as the District of Columbia. We compared eight different types of taxation in order to determine: 1) Which states have the highest and lowest tax rates; 2) how those rates compare to the national median; 3) which states offer the most value in terms of low taxation and high cost-of-living adjusted income levels.
The average American family pays nearly $7,000 in state and local taxes in a given year, but the actual amounts vary wildly. A Californian who lives on the western side of Lake Tahoe pays almost three times more in state taxes than their neighbor on the Nevada side of the lake. Someone living in Portland, Ore., pays more than twice as much as a neighbor living across the Columbia River in Vancouver, Wash.
This study presents detailed state-by-state estimates of the state and local taxes paid by businesses for FY2012. It is the 11th annual report prepared by EY in conjunction with the Council On State Taxation (COST).
To put the CT in context, we note that these tax payments represent a small portion of the overall tax burden borne by California businesses. According to a study of 2011-12 business taxes by the Council on State Taxation—a trade association of multistate corporations—corporate income taxes made up only about 10 percent of the entire amount of state and local taxes paid by California businesses. The two largest taxes paid by businesses—property taxes and sales taxes—were each much larger than the total amount of state corporate income taxes.
. . . Census data shows that in 2012, 7.1 percent of California’s overall state tax revenues came from corporate income taxes. . . . This is an above-average share of state tax revenues derived from corporate income taxes. Specifically, the average share among the 50 states was 5.1 percent of tax revenues.
While lawmakers begin discussing ways to fix California’s cash-strapped teacher pension system, another long-term financial problem continues to fester.
In a far-ranging assessment of how much California pays its help, a nonpartisan report on Tuesday said the state government will spend a half-billion dollars more on employee compensation next year, but most workers’ take-home wages will continue to lag behind inflation.
States withdraw money from budget stabilization funds primarily to counter unexpected drops in revenue. Pew research has found, however, that most states do not consider revenue fluctuations in determining how and when to deposit money into their reserve funds. According to “Managing Uncertainty,” Pew’s report on strategies to smooth revenue volatility, only a dozen states, including Massachusetts, Texas, Virginia, and Utah, link deposits directly to unexpected surges in volatile tax streams. California could join this list of states if Gov. Brown’s proposal passes.
“Here in the wealthy heart of Silicon Valley, the roads are pocked with potholes, the libraries are closed three days a week and a slew of city recreation centers have been handed over to nonprofit groups. Taxes have gone up even as city services are in decline, and Mayor Chuck Reed is worried. . . . In San Jose and across the nation, state and local officials are increasingly confronting a vision of startling injustice: Poor and middle-class taxpayers — who often have no retirement savings — are paying higher taxes so public employees can retire in relative comfort.”
State Sen. Noreen Evans (D-Santa Rosa) on Wednesday revived a proposal to tax oil pumped from the ground in California, saying the $2 billion it would raise annually could help restore the affordability of higher education and improve social services and parks.
We also find that the plan raises some important policy issues related to the financing and maintenance of state infrastructure and serves as a valuable starting point for legislative discussions. However, we note that the plan does not include some key information and suggest some changes that could make the plan more helpful to the Legislature. In addition, given the size of the state’s infrastructure investments and their long-term nature, we recommend that the Legislature take a more active role in considering infrastructure in a comprehensive way.