All that has changed, according to a far-reaching package of data from the state controller. Taxpayers are now on the hook for billions of dollars more to cover the future retirements of public workers, with the bill widely varying depending on where they live.
California is among 21 states where tax revenue in the second quarter of 2014 surpassed (after adjusting for inflation) what it was before revenue collapsed during the recession, the Pew report found. California received $34.9 billion in tax revenue from April through June of this year, 5.5 percent higher than its pre-recession high of $31.3 billion in the third quarter of 2006. That is more than triple the U.S. average of 1.6 percent.
State audit has found that the cost of the state’s recycling program for beverage containers has exceeded its revenue by over $100 million in three of the last four fiscal years.
Following voter approval of a state rainy day fund, Standard and Poor’s raised California’s credit to an A+ stable rating on Wednesday, the state’s fourth upgrade by a credit ratings agency in the past two years. The rating was raised from A.
If fully implemented, the annual cost of base tuition and fees for a California resident will jump from $12,192 this academic year to an estimated $15,563 in 2019-20.
Chiang added public pension systems to his already large fiscal database. One chart reveals that their “unfunded liabilities” – the gap between assets and liabilities for current and future pensions – exploded from $6.3 billion in 2003 to $198.2 billion in 2013.
Local-government employers contributions to defined-benefit retirement systems have nearly tripled in the last 11 years, according to the most recent data published by the California State Controller’s Office, while employee contributions have nearly doubled.
Total revenues in September reached $9.8 billion and beat forecasts contained in the 2014-15 Budget Act by $671 million, or 7.4%. All of the “Big 3” revenue generators — personal income, corporate income, and retail sales taxes — surpassed expectations.
According to an analysis by Standard & Poor’s, as the income gap has widened over the years, growth in state tax revenue has declined, from 11 percent annually from 1950 to 1979 — before the income gap began to noticeably widen — to 7 percent since 2009. Bottom line, according to the report, “increasing income inequality is undermining the rate of state revenue growth” in California and nationwide.
Compared with local governments, which rely to a greater extent on property taxes, states generate the bulk of their revenue from taxes levied on current economic activity, namely personal income and consumption. Therefore, when the economy operates below its potential, state tax revenues tend to suffer. Insofar as income inequality contributes to economic output falling short of potential, it undermines the growth of states’ tax bases.
Our analysis found a negative relationship between income inequality and state tax revenue tends. When we tested the relationship by tax structure, we found the negative effect was stronger and only statistically significant in the sales tax-reliant states. The findings support our view that rising income inequality contributes to weaker tax revenue growth by undermining the rate of overall economic expansion.
The big pension fund said it was the fourth time in five years that it has earned double-digit investment returns. CalPERS is still trying to claw its way back from the crippling multibillion-dollar losses of 2008-09, when the housing bubble burst and the financial markets crashed.
Currently, Los Angeles has a living wage ordinance that requires that city contractors pay at least $12.28 per hour without health benefits, or slightly less with health benefits, according to its Bureau of Contract Administration website.
About 215,000 state employees will be seeing a few dollars more in their next paycheck. Some workers say getting the more than four percent raise in one lump sum would be better.
An independent hearing officer Monday dealt a major setback to Los Angeles’ effort to rein in public employee pension costs, concluding that elected officials violated labor law when they voted to roll back retirement benefits for new civilian workers without negotiating with labor leaders..
Moody’s Investors Service, one of the nation’s largest credit rating organizations, upgraded its rating of California’s $86 billion in general obligation debt Wednesday, citing the state’s “rapidly improving financial position.”