State and Local Taxes in
California.
Robb Korinke
Principal
GrassrootsLab, LLC
State-Local Tax Burdens by State,
Fiscal Year 2012
State
New York
Connecticut
New Jersey
Wisconsin
Illinois
California
Maryland
Minnesota
Rhode Island
Oregon
State-Local Tax Burden as a
Percent of State Income
Rank
12.70%
12.60%
12.20%
11.00%
11.00%
11.00%
10.90%
10.80%
10.80%
10.30%
1
2
3
4
5
6
7
8
9
10
Key Liabilities Total $340 Billion.
To put that figure in perspective, it
is nearly two-and-one-half times
the amount of state General Fund
and special fund spending in 201314.
If divided among the state’s
residents, the amount of these key
liabilities would represent over
$8,500 per person. The state’s key
liabilities represent nearly one-fifth
of California personal income in
2013 (a commonly cited measure of
the size of the
What Liabilities?
California’s largest public pension programs have significant unfunded
liabilities.
The state’s two largest public retirement programs, the California Public
Employee Retirement System (CalPERS) and the California State Teacher’s
Retirement System (CalSTRS), cover 65% of the four million state, county, and
local employees who are eligible for public pension benefits. These two programs
reported $62 billion and $74 billion in unfunded liabilities, respectively, for the
2013 fiscal year. –LAO OFFICE
California faces a ten-year, $765 billion infrastructure deficit, $500 billion of
which is in transportation. -CA Economic Summit
++ Mental Health, Water Reliability, UC/CSU Funding, K-12, Court System,
Environmental Protection, Affordable Housing, Homelessness, etc, etc.
What Liabilities?
Local Liabilities
In 2012, the University of Southern California was tasked with estimating the
costs of TMDL compliance… researchers concluded that the costs in the Los
Angeles region would range from $43.7 billion to $283.9 billion, depending on the
storm size and treatment level, and including compliance with the California
Toxics Rule (CTR).
Garcetti announced in October that he wants to impose new fees on developers
that could raise more than $100 million a year to subsidize affordable housing in
L.A., where residents are struggling with runaway rents and home prices.
An Overview of Local Revenue Measures in
California Since 2001

A proposal to increase a general purpose tax is more likely to succeed than a special tax. Generally, the
additional hurdle of the two-thirds vote exceeds the appeal of dedicating a tax to a specific purpose.

Generally speaking, special taxes for broad based public safety services (law enforcement, fire,
emergency medical) are more likely to garner two-thirds voter approval than other purposes. Two thirds
parcel taxes for schools are also more successful than not.

The so-called a/b advisory vote approach to general tax measures appears to have little effect on the
success or failure of a measure.

For cities and counties, add-on sales (transactions & use), transient occupancy (hotel), and business
license tax increase measures all succeed more often than proposals to increase utility user taxes.

Most extensions and revisions of existing taxes that do not increase the rate are successful.

Lowering the two-thirds vote approval threshold for special taxes 55 percent would substantially increase
the passage rate of these measures, reducing the number of failing measures by half or more.

Lowering the two-thirds vote approval threshold for general obligation bonds to 55 percent would have
an even more dramatic effect, increasing passage rates from around half to as high as 90 percent. Over
80 percent of fifty-five percent school bonds since 2001 passed.
CaliforniaCityFinance.com
2012 Ballot Measures
Result Title
Subject
Description
Pass Proposition 30 Taxes
Jerry Brown's Tax Increase (revenues for general fund and education)
Fail
Proposition 31 State budget
Two-Year Budget Cycle
Fail
Proposition 32 Labor
Ban on corporate and union contributions to state and local candidates
Fail
Proposition 33 Insurance
Car insurance rates can be based on a person's history of insurance coverage ("persistency
discounts")
Fail
Proposition 34 Death penalty
"End the Death Penalty"
Pass Proposition 35 Law enforcement Increased Penalties for Human Trafficking and Sex Slavery
Pass Proposition 36 Law enforcement Modification of the "Three Strikes" Law
Fail
Proposition 37 Regulations
Mandatory Labeling of Genetically Engineered Food
Fail
Proposition 38 Taxes
Molly Munger's State Income Tax Increase for Education
Pass Proposition 39 Taxes
Income Tax Increase for Multistate Businesses
Pass Proposition 40 Redistricting
Referendum on the State Senate Redistricting Plan
2006 Ballot Measures
Result Title
Subject
Description
Pass
Proposition 1A
Transportation
Transportation funding
Pass
Proposition 1B
Bonds
$19.925 billion in bonds for highway safety, air quality
Pass
Proposition 1C
Bonds
$2.85 billion in bonds for housing, emergency shelter
Pass
Proposition 1D
Bonds
$10.4 billion in bonds for education facilities
Pass
Proposition 1E
Bonds
$4.1 billion in bonds for disaster preparedness
Pass
Proposition 83
Law enforcement
Sex offenders, monitoring
Pass
Proposition 84
Bonds
$5.4 billion in bonds for flood control
Fail
Proposition 85
Abortion
Require parental notification of a minor's abortion
Fail
Proposition 86
Taxes
Tax on cigarettes
Fail
Proposition 87
Environment, taxes
New tax on gas, oil
Fail
Proposition 88
Education, taxes
Impose a new statewide $50 parcel tax
Fail
Proposition 89
Elections and campaigns Public funding for political campaigns
Fail
Proposition 90
Eminent domain
Limit government's ability to take property through power of eminent domain
2012: LA County Results
Measure J:
LA County Sales Tax for Transportation
Los Angeles
Percent
Yes
No
1,893,340
970,611
66.1%
33.9%
Proposition 30:
Temporary Taxes to Fund Education
Los Angeles
Percent
Yes
No
1,851,863
1,214,499
60.4%
39.6%
PASS
TOTAL Measures 16
FAIL
10 62.50%
6 37.50%
Parcel Tax
6
4 66.67%
2 33.33%
Sales Tax
4
3 75.00%
1 25.00%
Hotel Tax
1
0
1 100.00%
Utility Tax
2
2 100.00%
0
Other Tax
3
1 33.33%
2 66.67%
0.00%
0.00%
2016 Ballot Proposals

More than 60 measures currently approved for circulation

Ranging from ferret legalization to lowering the drinking age to 18

13 Different measures relating to marijuana and cannabis for medicinal and
recreational use

4 measures involving bonds


High-Speed Rail Bond Suspension Initiative (#15-0109A1)

Reallocation of Bond Authority to Water Storage Initiative (#15-0107A1)

California Water Supply Reliability and Drought Protection Initiative
(#15-0088A1, #15-0089A1, #15-0090A1, #15-0091A1, #15-0092A1,
#15-0093A1, #15-0094A1 and #15-0095A1)

Online Voting System Initiative (#15-0108A1)
4 significant tax measures
2016 Ballot Proposals
 Split
Roll
 Prop 30 Extension
 Sin Taxes (Marijuana, Tobacco,
Internet Poker)
 Infrastructure Bonds (School, Water,
Referendum on High Speed Rail)
2016 Tax Proposals

Healthcare, Research and Prevention
Tobacco Tax Amendment (#15-0081A1)

California Lifting Children and Families Out
of Poverty Act Initiative (#15-0043)

Cigarette Tax to Fund Healthcare, Tobacco Use
Prevention, Research, and Law Enforcement.
Initiative Statute.

Property Tax Surcharge to Fund Poverty
Reduction Programs. Initiative Constitutional
Amendment and Statute.

Increases cigarette tax by $2.00 per pack,
with equivalent increase on other tobacco
products and electronic cigarettes containing
nicotine. Allocates revenues primarily to
increase funding for existing healthcare
programs; also for tobacco use
prevention/control programs, tobaccorelated disease research and law
enforcement, University of California
physician training, dental disease prevention
programs, and administration. Excludes these
revenues from Proposition 98 funding
requirements.

"Imposes additional surcharge on real
property with an assessed value of over $3
million. Surcharge based on a sliding scale
ranging from three-tenths of one percent for
real property assessed at $3 million to eighttenths of one percent for real property
assessed at $10 million or more. Allocates
revenue to numerous programs for the
purpose of reducing poverty, including:
prenatal services, expanded childcare, early
childhood education, after-school and
summer programs, job training grants, tax
credits, and monetary aid. Surcharge expires
in 20 years.“
2016 Tax Proposals

Invest in California's Children Initiative
(#15-0070)

Political Advertisement Sales Tax
Initiative (#15-0061) and (#15-0106)

Tax to Fund Education, Healthcare, and Child
Development. Initiative Constitutional
Amendment.

Sales Tax on Political Advertisements. Initiative
Constitutional Amendment.

“Permanently establishes the temporary
personal income tax increases enacted in
2012 for annual earnings over $290,000,
currently set to expire in 2018. Imposes new
personal income tax on annual earnings over
$1 million. Allocates these tax revenues 50%
to K-12 education, community colleges, and
universities; 40% to healthcare for lowincome individuals; and 10% to childcare and
child development programs. Excludes these
revenues from Proposition 98 funding
requirements. Establishes a reserve fund,
capped at 20% of the annual revenues, for
use during state budget emergencies.
Requires annual audit of expenditures.”

“Imposes a 1,000 percent sales tax on
political advertising delivered within the
State of California. Political advertising
includes, but is not limited to, all media
spending by political parties, political action
committees, or candidates. Requires that
proceeds of the tax be used for public
education.”
Water Conservation, Flood Control and
Stormwater Management Act of 2016


This measure establishes an alternative funding method that authorizes local
agencies to:

Set rates for customers to encourage water conservation, prevent waste, and
discourage excessive use of water.

Levy fees or charges, subject to ratepayer protest, for flood control, and for
management of stormwater to protect coastal waters, rivers, lakes, streams,
groundwater and other sources of drinking water from contamination and to
comply with the federal Clean Water Act and state laws and regulations.

Use fees or charges to reduce water, and sewer fees or charges for low-income
customers.
Any local agency that utilizes this alternative funding method for water, flood
control, stormwater, or sewer service should be required to adhere to strict
accountability, transparency and ratepayer protections.
2016 and Beyond: What to Watch
 Split
Roll Fails, Prop 30 Gets
Extended
 A New Amazon Tax?
 VMT Tax/Fee
 Prop 218 Reform
 Open Government Legislation