Governor Estimates State Budget Deficit at $16 Billion

Governor Jerry Brown recently released the May revision to his 2012-13 budget proposal, and estimated that the state government faces a general fund budget shortfall of $16 billion based on ongoing spending commitments and projected revenue. The budget calls for $91.4 billion in general fund spending, up from $86.5 billion in the 2011-12 budget. Read more

Court Rejects Mobilehome Valuation Method Used by Santa Barbara Assessor, Promoted by BOE

The Santa Barbara County Assessor's Office erred when it reassessed transfers of ownership in two mobilehome parks using a process recommended by the State Board of Equalization, the Second District Court of Appeal ruled. Read more

Red-Light Cameras Costing Yuba City $10,000 a Month

Yuba City owes nearly $500,000 to the contractor that operates the city's three red-light cameras. That money will be sent out of California to Arizona, where the contractor is based. Read more

Sacramento Annually Spends $8 Million More Than Necessary for Emergency Services

The Sacramento Bee editorial board is urging Sacramento city leaders to follow up on recommendations from an in-depth study that found the city could save nearly $8 million a year by taking a dozen steps to improve efficiency. Read more

Nevada Supreme Court Schedules Another Hearing For California Tax Agency's Appeal of Hyatt Loss

The Nevada Supreme Court recently heard oral arguments in the California Franchise Tax Board's appeal of a Nevada jury's decision to award inventor Gilbert Hyatt $396 million in damages because of the misconduct of FTB auditors during a residency audit in the mid-1990s. While the justices peppered both sides' attorneys with questions during the hour-long session, the nature of the questions did not reveal any hint of how the court will rule, and on May 11, the court set a June date for a second round of oral arguments in the case. This litigation began in 1998. Read more

April Revenue Estimate Off by 20 Percent

California has a revenue estimating problem! According to a report from Controller John Chiang, the state's revenue for the month of April was 20.2 percent ($2.44 billion) below the governor's January estimate. Read more

Governor Submits Signatures for Tax Initiative

Governor Jerry Brown submitted a batch of signatures for his tax increase initiative to Sacramento election officials May 10, and his campaign announced that it will submit 1.5 million signatures. The initiative calls for a sales tax increase of 0.25 percentage points, and an income tax increase that would hit those with taxable income over $250,000. Read more

Sales Tax on Services Study Bill Approved

During its May 7 hearing, the Assembly Revenue and Taxation Committee approved AB 1963 (Huber), which would require the Legislative Analyst's Office to analyze revenue volatility and opine on whether a sales tax on services would help alleviate volatility. CalTax Fiscal Policy Director Therese Twomey told the committee: "While we don't oppose the notion of a study, we question the need for a particular study on sales tax on services, because this issue has been studied by the Commission on the 21st Century Economy as well as others." Read more

Sacramento Spent $680,000 on Failed Attempt for New Arena

Sacramento's attempts to build a new arena to keep the Sacramento Kings basketball team in town have been costly for taxpayers. After the latest arena deal was officially pronounced dead at the May 8 City Council meeting, it was revealed that Sacramento spent $680,000 in its attempt to get an arena deal in place. Read more

Through April, Income Tax Collections Were Down From Prior Year

The state controller's preliminary report on state income tax collections shows that through April 30, collections in 2011-12 are below collections in 2010-11. The totals through April are $40.81 billion in 2011-12, compared to $40.97 billion for 2010-11. Read more

California Still the Worst State for Business, CEOs Say

For the eighth consecutive year, California has been identified in Chief Executive magazine's annual survey of chief executive officers as the worst state in the nation in which to conduct business. "California government is difficult to work with and very bureaucratic," one CEO said. "Taxes and regulation are high and unruly." Read more

Lawmakers Drop Measures Proposing Tax on Services

Good news for taxpayers: Two bills proposing to impose a sales tax on services have been amended and no longer would impose a sales tax on services. CalTax led a large coalition of taxpayers who opposed the bills. Read more

UCLA Loses, 3-2

Members of the State Board of Equalization, during their April meetings in Culver City, voted 3-2 to deny a refund claim by the University of California at Los Angeles for sales tax paid on specified materials printed by the school. Read more

Two Decades of Illegal Benefit Payments Went Unnoticed in Stockton

In violation of the Stockton City Charter, the mayor and two City Council members were enrolled in the state retirement system and were illegally paid retirement benefits for 21 years, the Stockton Record found. Read more

Some Health Districts Spending More on Salaries Than Health Care

The Legislative Analyst's Office notes that there are 73 health care districts in California – 43 that currently operate hospitals, and 30 that do not (including some that have never operated a hospital). Most receive a share of local property taxes, and some levy parcel taxes, and they have been spending large amounts on salaries. Read more

California Ranks Poorly in Comparison of State Tax Climates

A comparative study of state and local taxes in the United States found that California compares poorly to other states in terms of how its tax climate affects the ability of business owners to keep their doors open. Read more

No on Proposition 29:
New Bureaucracy Funded by Tobacco Tax Increase

CalTax opposes Proposition 29, an initiative on the June 5 ballot that would increase tobacco taxes $1 per pack to fund a new bureaucracy, overseen by political appointees, related to cancer research. CalTax supports cancer research, but opposes this flawed proposal because it is a classic example of ballot-box budgeting that would establish a new program funded by a declining revenue source. Read more

CalTax Fact Sheet: Sales Tax on Services Hurts Working Families and Employers

A sales tax on services would hurt working families, move jobs out of the state, discriminate against small businesses, and worsen California's business climate. Read more

Los Angeles Times Editorial: "No on Proposition 29"

The Los Angeles Times is urging Californians to vote "no" on Proposition 29, which would increase cigarette taxes $1 per pack to fund a new state bureaucracy. In an April 27 editorial, the newspaper concluded that "this initiative takes perfectly good tax money and misspends it." Read more

Multistate Formula Apportionment: Close Enough for Government Work?

An obscure and arcane formula used to determine how much business income of a multistate or multinational corporation is subject to tax in California has become a hot political issue. CalTax Chief Tax Consultant David R. Doerr discusses the two major problems with the formula: it is wrong in theory and it does not work well in practice. Read more

Spending Cap Plan Gives California Real Choice in '12

In an editorial, Investor's Business Daily writes: "The Government Spending Limit Act of 2012 ... offers Californians a true alternative to all those other propositions that just ask for more money. The measure is about restraint, a rare thing in California over the past two decades. In that way it's new. It's also a revival of a spending-cap strategy that worked well in the decade after voters passed Proposition 13." Read more

Will "Soak the Rich" Tax Policy Encourage Wealthy Taxpayers to Relocate?

Will the threat of new soak-the-rich proposals accelerate the migration of wealthy taxpayers out of California, and what effect would this have on state revenue? How many high-income California taxpayers would have to move out of the state for the soak-the-rich proposal to be unproductive? Read more

CalTax Fact Sheet: Split Roll Initiative Would Devastate California's Economy

A recently filed "split roll" property tax initiative would undo Proposition 13 protections for businesses in California, bringing back an unpredictable method of assessing property taxes and dramatically raising taxes on employers, making it even harder for small businesses to survive. Read more

CalTax Study Finds No Evidence of Shift in Property Tax Burden

CalTax research, based on statistics from the Board of Equalization, shows that there is no evidence that the property tax burden has shifted from business and non-homeowner property subject to Proposition 13 to homeowners. Proposition 13 also made the property tax stable and predictable for property owners. Read more

What Proposition 13 Did

Proposition 13 set a maximum rate for the property tax, and removed guesswork, opinion and chance from the determination of a property's assessed value — the value upon which the tax rate is levied. Read more

CalTax Voting Record for the 2011 Legislative Session

The California Taxpayers Association has released its 2011 Voting Record, providing Californians with an important measurement of how their representatives in the Legislature acted on major tax and fiscal legislation. Read more

CalTax Research Bulletin:

Tax Policy Decisions and the California Economy

Good tax policy improves the economy and provides equity among taxpayers. Tax incentives can be designed to create a better climate for entrepreneurs, innovators and job seekers. Other tax policies can be effective tools for providing equity to taxpayers. Read the full Research Bulletin

CalTax Research Bulletin: State Has Wasted $18.9 Billion

State government waste, fraud and mismanagement has cost California taxpayers $18.9 billion in the past 10 years. "Every penny of waste that is stopped is like a penny of new revenue," CalTax President Teresa Casazza said. Read more

Report: Split Roll Would Have Negative Impact

A new report from the Pepperdine University School of Public Policy finds that if California enacted a split roll property tax, the damage to the economy would total $71.8 billion of lost output and 396,345 lost jobs in the first five years alone. Read more

CalTax Report Identifies Billions in Potential Cost Savings for Government

CalTax's "Government Cost Savings Report: How State and Local Government Can Increase Efficiency and Become More Effective" identifies more than $7.3 billion that state and local government could save or obtain from revenue enhancements if proactive steps are taken to address inefficiencies and reform existing programs. To read the report, click here.

Tax or Fee? CalTax's Proposition 26 Compliance Guide Provides the Answer

CalTax has released "Understanding Proposition 26: A Sponsor's Guide to California's New Tax Structure," a guide for taxpayers and government agencies to ensure that the Stop Hidden Taxes Initiative is implemented correctly. Read more

California's Tax Machine: Invaluable Resource on State's Tax Policy

CalTax Chief Tax Consultant David R. Doerr's book chronicles the birth of assessments on property, income, sales, utilities, vehicles, banks and corporations, inheritances, oil, alcohol, tobacco and more. It includes must-read chapters on the landmark property tax initiative Proposition 13, detailing the causes and effects of the taxpayers' revolt. Read more

Locate Tax Legislation

Need to locate a tax-related bill considered by the California Legislature? Former legislative tax consultant Martin Helmke's spreadsheets include bills from 1995 to the present. Read more

Local Tax Elections

Click here for a table that includes this year's tax elections and click here for results of 2011's local tax elections in California, along with information on tax measures that will be decided in local elections later this year.