State Budget

New Budget Deal Unveiled, Quickly Brought to Vote

Governor Gavin Newsom and Democratic legislative leaders announced June 22 that they reached an agreement on the 2020-21 state budget, and three days later the Senate voted to approve 18 budget trailer bills to implement the deal. The Senate’s approval of AB 89 (Ting), “the budget bill junior,” came Thursday evening with a party-line 29-11 vote. The budget passed June 15 by the Legislature (SB 74) relied heavily upon possible receipt of federal funds to balance the budget. The new budget agreement…

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Lawmakers Scheduled to Vote on $9.2 Billion Tax Increase on California Businesses

Both houses of the Legislature are scheduled to vote Monday on a budget deal that includes $9.2 billion in tax increases on California businesses via a suspension of the net operating loss deduction and a $5 million-per-year limit on business tax credits – including the research-and-development credit – for three years retroactive to the beginning of this year. CalTax is leading a coalition of more than 50 trade associations and local taxpayer groups in opposition to the tax increases, which…

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Newsom Releases Details of Corporate Tax Increases, While Legislators Debate Priorities

Democrats in the state Senate released a budget proposal this week that agrees with Governor Gavin Newsom’s proposed limit on tax credit utilization and suspension of net operating loss deductions, but rejects some of the governor’s proposed spending reductions and focuses on using reserves and deferrals to balance the 2020-21 budget. A significant tax change previously suggested by Senate leaders – discounted income taxes for those who prepay a year or more in advance – is not part of the…

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Governor’s Tax Proposals Get First Legislative Hearings

The Legislature’s budget deliberations kicked into high gear this week with committee hearings on Governor Gavin Newsom’s budget revision. The governor’s budget plan includes $9.2 billion in tax increases on California employers, to be imposed by suspending net operating loss provisions and capping the amount of tax credits a business could claim during three tax years. These provisions were discussed in the committees, but not brought to a vote. Assembly Speaker Anthony Rendon truncated the budget process in his house…

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Governor Unveils Revised Budget Plan With Higher Taxes on Corporate Taxpayers

Governor Gavin Newsom released his revised budget proposal May 14, a $203.3 billion spending plan for the 2020-21 fiscal year that calls for higher taxes on California businesses via suspending net operating loss provisions and capping the amount of tax credits a business can claim. Newsom proposed the NOL suspension for 2020, 2021, and 2022 for what his budget summary describes as “medium and large businesses,” without additional details. The revised budget also would limit business incentive tax credits from…

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State Budget: State Lottery Owes $36 Million to Schools, Auditor Says

The state government could increase funding for K-12 education by properly managing the California Lottery, which owes schools $36 million, the state auditor reported February 25. The auditor originally calculated that the Lottery shortchanged schools by $69 million, but reduced the figure after Lottery officials belatedly provided more documentation. “We shared our calculation with the Lottery of how we arrived at the $69 million that it owed to education several times before it received our draft report,” the auditor wrote.…

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State Budget: In New Budget, Governor Proposes $7.4 Billion Increase in Spending

Governor Gavin Newsom on January 10 unveiled a $222.2 billion state budget proposal, reflecting a $7.4 billion increase in total spending (general fund and special funds) over the budget enacted in June. The governor said the budget has an operating surplus of $5.6 billion. At a press conference, Newsom touted the “highest level of investment ever” in public education – $84 billion, which represents a 3 percent increase over the current fiscal year, which also represented a record high. The governor’s…

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