For Marty Richman’s podcast interview with interim Police Chief David Westrick, go here.
Here are the answers to the California budget and tax quiz (go here for the quiz). They were written before Governor Brown’s announcement that the budget deficit had exploded from $9.2 billion to $16 billion since January. This was due – in equal $3-plus billion parts – to excess spending and lower tax revenues. According to the Tax Foundation, California’s 2009 state and local tax burden was sixth highest nationally, $4,910 per capita or 9.8 percent.
#1: The proposed California General Fund 2012-2013 budget request is D. $92.5 billion, which is an increase of 6.9% over the 2010-2011 budget of $86.5 billion.
#2: The largest portion of the state’s total 2012-2013 revenues comes from C. Personal Income Taxes, which are $61.0 billion (45.8 percent) followed by Sales and Use Taxes, $30.9 billion (23.2 percent), Corporation Taxes $9.3 billion (7 percent), and Motor Vehicle Fees $5.9 billion (4.5 percent). Property taxes are not included as state revenue even though a large portion goes to schools.
#3: The state’s largest GF expenditure category is E. K-12 Education $38.1 billion (41.3 percent), followed by Health and Human Services $26.4 billion (28.5 percent), Higher Education $9.3 billion (10.1 percent), Corrections and Rehabilitation $8.7 billion (9.4 percent), and Business, Transportation & Housing, $0.5 billion (0.6 percent.).
#4: A. ERAF stands for Educational Revenue Augmentation Fund, funds for education. To meet its obligations under Proposition 98, California enacted legislation in 1992 that shifted part of that education financial responsibility to cities, counties and special districts. This shifted some local property tax to ERAF. In FY 2010-11, the total ERAF shifted to schools was $7.5 billion
#5: In 2009-2010, statewide property tax revenues were, E.49.2 billion. It grew from 34.5 billion in 2004-2005 to $49.8 billion in 2009-2010, then fell slightly to $49.2 billion in 2010-2011 a 42 percent increase from 2004-2005. Inflation accounted for 16 percent of that growth; therefore, the net growth of California property taxes revenues over those five years after inflation was approximately 26 percent in spite of the bubble.
#6: The answer is C. The state has set property tax apportionments that are very different for each county. They vary based how each county was funding and spending when Proposition 13 was enacted and changed later. In Alpine County 26 cents on a dollar goes to schools, in Stanislaus County 73 cents; in San Benito County 62 cents, goes to schools, tied for 20th place. SBC’s 2009 apportionment for cities, 2 percent tied for 47th, apportionment to the county, 10 percent, tied for 53rd, and apportionment to other districts, 26 percent, tied for fifth. The county cannot change the apportionment unilaterally.
#7: In taxable year 2009 California’s total personal income tax liability for resident returns averaged D. 5.3 percent; it was 4.5 percent in the 1990s. California’s maximum individual income tax rate, 9.3 percent applies to taxable incomes over $48,029 and there is an additional 1 percent mental health surtax on taxable incomes over $1 million.
#8: Comparing tax year 2006-2007 with 2009-2010, the category with the largest drop in dollar revenues was D. State personal income taxes. They fell $10.8 billion, -21.8 percent, because taxable income fell $143.2 billion. Income tax rates are progressive going up, but regressive going down. State use and sales tax was down $2.9 billion, -6.3 percent, excise tax revenue fell $0.1 billion, -2 percent, state environmental fees grew $0.1 billion, +35 percent, and statewide county assessed property taxes increased 6.9 billion, +14 percent. In some cases, the timing of collections has changed; this makes year-to-year comparisons difficult.
Marty Richman is a Hollister resident whose column runs Tuesdays.
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