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Corporations Pay Less of Their State Income in Taxes Than a Generation Ago

The share of California corporate income paid in state taxes declined by more than half during the past three decades. In the early 1980s, corporations that reported profits in California paid more than 9.5% of this income in state corporation taxes. In contrast, corporations paid just 4.2% of their California profits in corporation taxes in 2017, the most recent year for which data are available. California’s state budget would have received $11.2 billion more revenue in 2017 had corporations paid the same share of their income in taxes that year as they did in 1981 – more than the state spends on the University of California, the California State University, and student aid combined. Corporations pay less of their income in taxes today - even amid the COVID-19 economic crisis - than they did in the 1980s in part due to the reduction of tax rates by state policymakers.

Taxes & Revenue

First Look: Governor Confronts Unprecedented Challenges Amid COVID-19

On May 14, 2020, Governor Gavin Newsom released the May Revision to his proposed 2020-21 state budget. Our state is facing unprecedented challenges as a result of the COVID-19 crisis – an estimated $54 billion state budget shortfall for the current (2019-20) and next (2020-21) fiscal years, a rapid increase in unemployment, and millions of Californians in need of assistance as they confront new challenges to paying rent, buying groceries, and covering the costs of basic needs. The health and economic hardships are especially striking for Black and Latinx Californians, women and children in low-income households, and undocumented Californians. This First Look report summarizes key provisions of the Governor’s May Revision.

California Budget

California Workers with Less Education, People of Color, and Immigrants are Shouldering the Economic Burden of COVID-19

Millions of Californian workers are shouldering the burden of the COVID-19 economic slowdown, but workers with less education, people of color, and immigrants face the greatest financial risk, according to two new reports from the California Budget & Policy Center. The loss of jobs – evidenced by the record number of Californians who have recently filed for unemployment insurance – and cuts to work hours hit some households especially hard, and struggling to pay for food and rent during the pandemic is exacerbated by the economic, educational, and racial inequities many California workers already faced.

First Look: A Budget Center Analysis of the Proposed 2020-21 Budget

A Budget Center Analysis of Governor Newsom's Proposed 2020-21 Budget: On January 10, Governor Gavin Newsom released his proposed 2020-21 budget that advances a series of commitments to some of the most pressing needs facing Californians: addressing homelessness and behavioral health, providing access to affordable health coverage, and improving paid family leave so that more workers can care for their family members. The Governor forecasts revenues that are $5.8 billion higher (over a three-year “budget window” from 2018-19 to 2020-21) than previously projected in the 2019-20 budget enacted in June, driven largely by continued economic growth.

California Budget

California’s Workers Are Increasingly Locked Out of the State’s Prosperity

It’s hard work to be able to afford to live, raise a family, and eventually retire in California, especially for workers with low or moderate incomes. While the plight of these workers has never been easy — and workers who are black, Latinx, or women experience some of the greatest economic disadvantages and discrimination in the workplace — research shows that wages and benefits have significantly eroded for many Californians in recent decades. Many workers are being paid little more today than workers were in 1979 even as worker productivity has risen.

Poverty & Inequality

California Should Extend Tax Credits to Immigrant Families and Communities

State policymakers have significantly expanded California’s Earned Income Tax Credit — the CalEITC — since the credit was first enacted in 2015. However, hundreds of thousands of immigrant families are excluded from benefiting from the CalEITC as well as from California’s new Young Child Tax Credit, which is tied to CalEITC eligibility.

Poverty & Inequality

Income Inequality Significantly Increased for Californians in 2018

New Census figures released today show rising income inequality across the state and millions of California residents who are struggling to get by on extremely low incomes, while higher-income households experienced more income growth. Even as the latest figures also show there is a decline in the official poverty rate in California, these findings underscore the need for policymakers to ensure that the benefits of California’s strong economy and recent economic growth are shared among all Californians.

Poverty & Inequality

New Census Figures Show Many Californians Struggle to Afford Basic Needs

Approximately 7.1 million Californians lived in poverty each year from 2016 to 2018 – more than 1 in 6 state residents (18.2%) – according to new Census data released this morning based on the Supplemental Poverty Measure (SPM). The high cost of living in many parts of California is a key reason for California’s high SPM poverty rate, underscoring the continuing need for policies that address the state’s affordability challenges. High living costs are particularly problematic when they rise faster than incomes. This presents a challenge in California because inflation-adjusted wages in recent decades have grown only for the highest-paid workers, while wages for mid-wage and low-wage workers have remained largely flat.

Poverty & Inequality