Just one percent of income taxpayers, about 150,000 families in a state of 40 million people, account for nearly half of income taxes and therefore for a third of all general fund revenues. Their incomes largely come from earnings on stocks and other investments, which are very likely to plunge during recessions. It’s called “volatility” […]
California’s tax system, which relies heavily on the wealthy for state income, is prone to boom-and-bust cycles. While it delivers big returns from the rich whenever Wall Street goes on a bull run, it forces state and local governments to cut services, raise taxes or borrow money in a downturn. During the Great Recession, the […]
However, it’s just as important to keep the new economic rankings in perspective, to wit: —We’ve been there before. As the state Department of Finance points out, we were 5th in 2002, only to decline as the Great Recession struck a few years later, and we were in 10th place as recently as 2012. —While […]
However, as the latest data again confirm, the state’s rate of population growth has been declining. During the 1980s, thanks to high immigration and birth rates, California was expanding by 2-plus percent a year, adding 6 million residents in just 10 years. However, immigration, legal and illegal, is now a fraction of what it once […]
When the state could not repay the loans, the feds indirectly raised payroll taxes on California employers, which are expected to finally erase the debt this year. The state’s own report on its UIF, issued last October, projects that it will end 2018 with a positive balance of $1.8 billion, and 2019 with $2.3 billion, […]
Gov. Jerry Brown and a few other state politicians have been upfront in their concern about a potential exodus of the taxpaying rich to other states, some of which have no state income taxes, such as neighboring Nevada, Texas and Florida. There were anecdotal accounts of such relocations following a 2016 ballot measure that made […]
CalPERS says that an uptick in 2017 earnings, to more than 11 percent, has raised its funding level to 71 percent. That’s obviously good news, but CalPERS’ own staff estimates that earnings over the next decade should barely average 6 percent a year, which, if true, would mean the system would either have to allow […]
California’s poor students performed worse on a national exam than needy kids from all but one other state, according to results released this week by the National Center for Education Statistics. Congratulations, folks. We beat Alaska. These students’ lackluster scores on the most recent National Assessment of Educational Progress come despite the state’s $31.2 billion […]
There was a bit of good news for California in the federal government’s latest round of academic test results: it’s one of seven states that registered four-point gains in reading comprehension among eighth-graders. But that positive morsel in the 2017 National Assessment of Educational Progress (NAEP) testing of fourth- and eighth-graders released this week was […]
The need for more storage has been evident for decades, and although Southern California’s water agencies, particularly the Metropolitan Water District, have been diligent about adding it, Northern California, where most of the rain falls, has been negligent. . . . The recent drought was by no means the first. Gov. Jerry Brown’s first governorship […]
When governments seek permission to borrow money through bonds, telling voters how much and for how long taxes will be increased to repay those loans is just common sense. In fact, the Legislature last year passed such a law, requiring bond measures or taxes proposed by local governments or school districts to state “the amount […]
The state averages one economic boom and one bust per decade and California’s recovery from the Great Recession now has lasted well beyond historic expectations. In other words, as Gov. Jerry Brown, the Capitol’s resident economic worrywart, often points out, California is overdue for a downturn. That’s why he wants to squirrel away as much […]
Passing local tax measures has become big business, and California voters will face another barrage of proposals this year because cities are facing unprecedented fiscal crises, born mostly of rapidly increasing demands by the California Public Employees Retirement System (CalPERS) for more money to shore up its shaky finances. However, based on how these local […]
Every bit of data tells us that California faces a potential crisis because it is failing to generate enough college-educated workers to replace retiring baby boomers and fill the demands of an increasingly sophisticated economy. That failure underscores the irrelevance of the state’s nearly 60-year-old “master plan” for higher education, which envisioned seamless, low-cost access […]
In February, the Santa Cruz City Council unanimously declared a fiscal emergency, preparatory to placing a quarter-cent sales tax increase on the June ballot. Santa Cruz isn’t alone on that approach either. Throughout California, cities have taken, or are planning, sales tax increases. However, cities rarely cite pension costs as the specific reason for the […]