News

California State Controller Betty T. Yee today issued the state’s Comprehensive Annual Financial Report (CAFR) for the fiscal year that ended June 30, 2015, showing that a resurgent economy led to a $29.6 billion increase in revenues in the 2014-15 fiscal year. While spending and transfers also went up, the increases were not enough to offset the additional revenue, resulting in a $13.1 billion improvement in governmental activities’ net position. . . This CAFR incorporates major changes to reflect the state’s net pension liability. Based on guidance from the Governmental Accounting Standards Board (GASB), the new figure more accurately reflects a government’s unfunded pension obligation, helping policymakers decide on future funding strategies. Using these standards, the CAFR reports a net pension liability of $63.7 billion as of June 30, 2015.

California’s current housing market suffers from a shortage of supply and the lingering effects of the housing crash and the Great Recession. California currently ranks near the bottom in terms of its supply of housing relative to population growth. Add that to the increasing demand to live near the coast, to be close to tech hubs, and to be near downtowns, and it’s not too surprising that home prices throughout the state continue to rise. Additionally, the cost of development and stringent regulations imposed on developers has contributed to the lack of homebuilding in California.

In recent years, California has experienced negative domestic migration, meaning more people are moving from California to other states than the number of residents moving to California from other parts of the country. Statistics on the characteristics of California’s inbound and outbound migrants suggest patterns in migration over the past decade are more related to housing costs than tax structure.

The report finds that many new jobs in California are in low-wage industries, and the post-recession period favored low-wage job growth over middle-wage and high-wage job growth throughout the state by a wide margin. However, when compared with the rest of the nation, the trend of low-wage job creation is not unique to California.

For a city to sustain itself, it must provide a wide range of opportunities–not just for the affluent. The city, better seen as a metropolitan area, needs to addrss the diverse interests and preferences of its residents. And given that those interests and preferences are constantly evolving, the “over planning” mindset is untenable, even dangerous, to the future of cities that embrace it.

The Distressed Communities Index (DCI) is a customized dataset created by EIG examining economic distress throughout the country and made up of interactive maps, infographics, and a report. It captures data from more than 25,000 zip codes (those with populations over 500 people). In all, it covers 99 percent — 312 million — of Americans.

Rent control can have a negative impact on low-income households not living in rent-controlled units through higher growth in citywide median rents. Rents are too high because multi-family housing and the state’s housing stock have failed to expand
commensurately with the ever-growing population. The solution to this affordability problem is to expand the apartment stock in these cities, not introduce price ceilings.

In this follow up to California’s High Housing Costs, we offer additional evidence that facilitating more private housing development in the state’s coastal urban communities would help make housing more affordable for low–income Californians. Existing affordable housing programs assist only a small proportion of low–income Californians. Most low–income Californians receive little or no assistance. Expanding affordable housing programs to help these households likely would be extremely challenging and prohibitively expensive. It may be best to focus these programs on Californians with more specialized housing needs—such as homeless individuals and families or persons with significant physical and mental health challenges.

The 2015 economic outlook ranking is a forward-looking measure of how each state can expect to perform economically based on 15 policy areas that have proven, over time, to be the best determinants of economic success.

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.

“This year’s report shines its harshest spotlight on many courts and government authorities throughout hyper-litigious California, where legislators see fit to produce more than 800 new laws each year, inviting evermore litigation as residents and businesses can’t hope to keep up with what’s legal and what isn’t,” Joyce continued.

The Pacific Coast Collaborative released its 2014 jobs update report showing the strength of the West Coast’s clean economy.

A new study released today by the American Highway Users Alliance identifies America’s 50 worst bottlenecks and finds that the very worst bottleneck, as measured by hours of delay, is in Chicago, IL. Los Angeles, CA owns the next six of the top 10.

The state budget is better prepared for an economic downturn than it has been at any point in decades. In 2015–16, we project that the state’s “Big Three” General Fund revenues—principally the personal income tax—will exceed June 2015 budget assumptions by $3.6 billion, with most of that gain to be deposited into the Proposition 2 rainy day fund. In 2016–17, we project that revenues will exceed spending under current policies, resulting in even further improvement in the state’s fiscal situation. Assuming no new budget commitments are made, we estimate 2016–17 would end with reserves of $11.5 billion.

A new study shows that about 9,000 companies left California in the last seven years to reduce costs and improve prospects of growing their businesses. The report provides details about disinvestments by company name, ranks the popularity of the destination states and cities, and outlines the difficulties of doing business in California.