Subject: Studies in the News 03-41 (June 27, 2003)


CALIFORNIA RESEARCH BUREAU
CALIFORNIA STATE LIBRARY
Studies in the News:
Revenue, Taxation and Budgeting Supplement


Contents This Week

Introductory Material GENERAL GOVERNMENT
   Fiscal relief to state and local governments
   $20 billion in federal fiscal relief
   Payment schedule for fiscal relief grant
   Timing of grant awards for federal fiscal relief
   Competitive federal grants
   Serrano and Proposition 13
   Reassessment of commercial properties
   Analysis of Canciamilla-Richman budget plan
   Canciamilla-Richman budget proposal
   Reflections on state budget problems
   No federal tax cut for certain groups
   Tax principles workbook
   State-by-state analysis of tax cut
   Earned income tax credit pre-certification
PREVIOUSLY IN STUDIES IN THE NEWS
   Studies in the News 03-31 (May 13, 2003)
   Studies in the News, 03-35 (June 3, 2003)
   Studies in the News, 03-39 (June 17, 2003)
Introduction to Studies in the News

Studies in the News is a very current compilation of items significant to the Legislature and Governor's Office. It is created weekly by the State Library's Research Bureau to supplement the public policy debate in California’s Capitol. To help share the latest information with state policymakers, these reading lists are now being made accessible through the State Library’s website. This week's list of current articles in various public policy areas is presented below.

Service to State Employees:

  • When available, the URL for the full text of each item is provided.

  • Items in the State Library collection can be checked out to state officials and staff.

  • Access to all materials listed will be provided by the State Information Reference Center, either by e-mail to cslsirc@library.ca.gov or by calling 654-0261.

The following studies are currently on hand:

GENERAL GOVERNMENT

FEDERAL / STATE RELATIONS

States to Receive Fiscal Relief from Federal Government. By the Federal Funds Information for States. FFIS Issue Brief, 03-24. (FFIS, Washington, DC) May 23, 2003. 3 p.

["The Senate adopted an amendment to its budget reconciliation bill (S.1054) that would provide $20 billion in fiscal relief to state and local governments.... This Issue Brief summarizes the Senate provision and estimates state-by-state fiscal relief allocations."]

[Request #S8444]

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Some Questions and Answers on Fiscal Relief. By Federal Funds Information for States. FFIS Issue Brief, 03-28. (FFIS, Washington, DC) May 30, 2003. 5 p.

["Jobs and Growth Tax Relief Reconciliation Act of 2003 (PL 108-27)... Title IV provides $20 billion in state fiscal relief divided equally between a flexible grant and an enhancement to the federal medical assistance percentage (FMAP) for Medicaid for five calendar quarters...This brief provides answers to some of the questions raised by states since passage of the bill."]

[Request #S8445]

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Additional Information on Flexible Fiscal Relief. By Federal Funds Information for States. FFIS Issue Brief, 03-30. (FFIS, Washington, DC) June 4, 2003. 4 p.

["State Fiscal Relief Payments ... will be administered by the Treasury's Office of the Fiscal Assistant Secretary.... The first $5 billion of the flexible grant will be paid electronically within two business days after state certification is received by Treasury, but no later than September 30, 2003. The second will be paid electronically on October 1, 2003, if appropriate certification is received."]

[Request #S8452]

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FEDERAL AID

Fourth Update on Fiscal Relief. By Federal Funds Information for States. FFIS Issue Brief, 03-33. (FFIS, Washington, DC) June 16, 2003. 4 p.

["The purpose of the payments made under Section 401(b) of Jobs and Growth Tax Relief Reconciliation Act of 2003.... For states that receive quarterly awards, a grant award to retroactively compensate states for medial assistance expenditures since April 1, 2003 has been made available.... Future awards will reflect whatever FAMP is appropriate for the given fiscal periods."]

[Request #S8456]

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FEDERAL GRANTS

Competitive Grants Update. By the Federal Funds Information for States. FFIS Competitive Update, 03-08. (FFIS, Washington, DC) June 19, 2003. 11 p.

[Includes: "Life Skills for State and Local Prisoners Program;" "Community Technology Centers Program;" "Internet Crimes Against Children Task Force Program;" "Innovative Food Safety Projects;" "Refugee Family Enrichment Projects;" "Homeless Providers Grant and Per Diem Program;" "Law Enforcement Pedestrian Safety Programs;" and others.]

[Request #S8446]

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PROPOSITION 13

"Tiebout and Tax Revolts: Did Serrano Really Cause Proposition 13?" By Kirk Stark and Jonathan Zasloff. IN: UCLA Law Review, vol 50, no. 3 (2003) pp. 801-858.

["In this article, we examine the relationship between Serrano v. Priest ... and Proposition 13, the state's famous property tax revolt. As school finance litigation continues in several states, opponents of equalization schemes have argued that Serrano 'caused' Proposition 13.... We present new statistical and historical evidence challenging the connection between Serrano and Prop. 13."]

[Request #S8447]

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25 Years After Proposition 13: Exploring Reassessment of Commercial Properties Owned by Legal Entities: A Policy Analysis. By Brian C. Brown, University of California, Berkeley. Prepared for the California Senate Office of Research. (The Office, Sacramento, California) June 2003. 35 p.; Appendices.

Full Text at: www.sen.ca.gov/sor/WHATS_NEW/Prop13.pdf

["This paper is intended to explain issues and explore options in the reassessment of commercial properties owned by legal entities under laws adopted to implement Proposition 13 after its passage 25 years ago.... [It] offers a series of possible options for consideration by the Legislature."]

[Request #S8448]

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STATE BUDGET

Does the Canciamilla-Richman Plan Pencil Out For California? By Jean Ross, California Budget Project. (The Project, Sacramento, California) June 24, 2003. 6 p.

Full Text at: www.cbp.org/2003/030624CanciamillaRichmanPlan.pdf

["The plan includes a ˝ cent increase in the state's sales tax to repay bonds issued to finance the 2002-03 deficit but rejects the Governor's proposed personal income tax rate increase on the very wealthy, as well as the proposed tobacco tax increase. It also makes substantially deeper spending cuts than either the Senate or Assembly budget plan, including: reducing SSI/SSP grants to the minimum required by federal law; reducing K-12 education spending by the equivalent of $106 per pupil; and, reducing Medi-Cal provider reimbursement rates by 10 percent. This CBP analysis examines the plan in greater detail."]

[Request #S8449]

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Assemblymembers Canciamilla and Richman Unveil Fiscally Responsible Budget Plan: Press Release. By the Offices of Assemblymembers Canciamilla and Richman. (The Offices, Sacramento, California) June 17, 2003. And Fiscal Effects of Canciamilla/Richman Savings Proposals Relative to Assembly Version. By the Legislative Analyst Office. (The Office, Sacramento, California) June 16, 2003.

["Two members of the Assembly -- a Democrat and a Republican -- bucked their party leaders to propose a budget that makes deep cuts and temporarily raises the sales tax to bring state finances back into balance.... It would roll back per capita state spending and the state payroll to levels that existed in the late 1990s, before a stock market-driven bubble in state revenues, and impose fiscal reforms such as a spending cap and a required 5 percent rainy-day reserve." Sacramento Bee (June 18, 2003) A3.]

Press Release. 2 p.
http://democrats.assembly.ca.gov/members/a11/Press/p112003008.htm

LAO Report. 9 p.
http://democrats.assembly.ca.gov/members/a11/Press/Richmanletter061303.pdf

[Request #S8450]

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Making California's State Budget More User Friendly and Transparent: Further Thoughts. Presented to the UCLA Anderson Forecast. By Werner Z. Hirsch, and others, University of California, Los Angeles. (The Authors, Los Angeles, California) June 5, 2003. 27 p.

["Wrestling with fiscal problems is not a new activity for California governors, legislators or other state officials. Depending on ideology, economic circumstances, and voter preferences, state policy toward taxation and spending has varied.... Budgets that are not informative and accurate will cloud the process of policy determination. Abrupt changes in budgetary practices that may accompany fiscal crises -- such as across-the-board spending cuts and job freezes -- can inadvertently upset priorities."]

[Request #S8451]

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TAXATION

Tax Cut Law Leaves Out 8 Million Filers Who Pay Income Taxes: Widely Reported Claim that All Who Pay Income Tax Receive a Tax Cut Found Untrue. By Robert Greenstein, Center for Budget and Policy Priorities. (The Center, Washington DC) June 1, 2003. 3 p.

Full Text at: www.cbpp.org/5-31-03tax.pdf

["A new study by groups critical of the tax law that President Bush signed has found that 8 million mostly low-income taxpayers will not receive any benefit from the law.... The new analysis says that the taxpayers who get nothing from the tax law are primarily low-income single people who do not have children and lack income from dividends or capital gains. A large number of low- and moderate-income single parents with children over 16 will also get no benefit from the law, because it did not change the tax rate for such parents who are unmarried." Sacramento Bee (June 1, 2003) A17.]

[Request #S8453]

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Tax Principles Workbook: A Tool For Critiquing Tax & Fiscal Proposals and Systems. By the Tax Policy Group, Joint Venture, Silicon Valley Network. (The Network, San Jose, California) 2003. 32 p.

Full Text at: www.jointventure.org/taxpolicyworkbook/JVSVTaxWorkbook.pdf

["The group used the American Institute of Certified Public Accountants' tax policy statement to create a tool to help policymakers and others interested in improving California's tax and fiscal structure.... The statement provides ten principles for determining if an existing tax or proposal to modify a tax rule follows good tax policy.... Following are four case studies of how the principles can be used to evaluate tax and fiscal structures and proposals."]

[Request #S8454]

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The Bush Tax Plan, State-by-State. By Citizens for Tax Justice. (Citizens for Tax Justice, Washington, DC) June 13, 2003. 11 p.

Full Text at: www.ctj.org/pdf/gwb03st.pdf

["The analysis shows how the enacted tax cuts will affect taxpayers at various income levels in each state and the District of Columbia for each year from 2003 to 2006, and estimates the total tax cuts accruing to each income group for the entire four-year period."]

[Request #S8457]

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TAXES

Earned Income Tax Credit Pre-Certification: Special Report Series. By The Center on Budget and Policy Priorities (The Center, Washington,DC) May 22, 2003. Various pagings.

["The new procedures, which would be phased in over several years, could ultimately make it more difficult for up to four to five million low-income working families -- as many as 25 percent to 30 percent of all families with children applying for the EITC. -- to receive the credit."]

New IRS "Pre-Certification" Requirements Could Prevent Many Eligible Families from Receiving the Earned Income Tax Credit. 2 p.
http://www.centeronbudget.org/5-20-03eitc.pdf

The New Procedures for the Earned Income Tax Credit. 19 p.
http://www.centeronbudget.org/5-20-03eitc2.pdf

What is the Magnitude of EITC Overpayments. 6 p.
http://www.centeronbudget.org/5-20-03eitc3.pdf

Recommendations to the IRS on Its EITC Pre-Certification Initiative. 2 p.
http://www.cbpp.org/5-20-03eitc4.pdf

[Request #S8455]

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PREVIOUSLY IN STUDIES IN THE NEWS
[This section links to items in Studies in the News since the last Revenue, Taxation and Budgeting Supplement.]

"General Government. IN: Studies in the News, 03-31 (May 13, 2003).

[Includes: "Homeland security grant allocations;" "Federal revenue shortfalls;" "Internet cigarette sales;" "Ruling on minimum wage for state employees;" "State Controller's authority to pay essential services;" "Public views on taxes;" and others.]

[Request #S8458]

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"General Government." IN: Studies in the News, 03-35 (June 3, 2003).

[Includes: "$10 billion in federal assistance;" "California share of federal funds;" "Federal funds and budget cuts;" "Competitive grant update;" "Funds released for homeland security;" "May revision of the state budget;" "Overview of the May budget revision;" and others.]

[Request #S8459]

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"General Government." IN: Studies in the News, 03-39 (June 17, 2003).

[Includes: "Federal funds for competitive grants;" "Proposed reduction of SSI/SSP;" "California's current fiscal crisis;" "Qualty-of-life priorities budget;" "Public survey on state budget;" "State budget actions;" "Sluggish state revenue performance;" "Taxation of telecommunication;" and others.

[Request #S8460]

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