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California revenues decline amid economic worries

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California revenues decline amid economic worries


The great instances may quickly be over for California’s authorities.

The nation’s most populous state has had a lot money currently that lawmakers have spent freely — handing out free well being care to low-income immigrants, paying for each 4-year-old to attend kindergarten and sending greater than $21 billion in stimulus checks to taxpayers over the previous two years.

That seemingly infinite movement of cash has began to dry up as state tax collections have fallen under expectations for 4 months in a row. There’s now an 80% probability California might be about $8 billion brief when its fiscal yr ends subsequent summer season, based on the newest estimate from the nonpartisan Legislative Analyst’s Workplace.

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There’s nonetheless loads of time for a comeback, however the pattern of declining revenues is already having an affect. Final month, Democratic Gov. Gavin Newsom blocked a tax reduce for producers, halted an growth of full-day kindergarten applications and nixed unemployment advantages for immigrants residing within the nation with out authorized permission — all whereas citing the state’s potential shortfall.

“These shortfalls not solely might be coming, they are going to be ample and we’ll must make some changes,” Newsom stated. “We’re working with the Legislature proper now to just do that.”

Regardless of the shortfall, California is probably going not headed towards one other money disaster just like the one which engulfed the state in the course of the Nice Recession greater than a decade in the past. California had lower than $8 billion obtainable to spend on the finish of September 2008 in the course of the Nice Recession. This yr, California has greater than $130 billion obtainable, together with $37.2 billion in its varied financial savings accounts.

“I believe the state is much better positioned for a possible financial downturn this time round than it has been in modern historical past,” stated Chris Hoene, government director of the California Funds & Coverage Heart.

What’s occurring in California could possibly be an indication of troubling issues to come back for different states. Nationally, tax collections in most states look like above expectations to date, based on Brian Sigritz, director of state fiscal research for the Nationwide Affiliation of State Funds Officers. However income is rising a lot slower, with states anticipating a 1.4% common improve this yr in comparison with a 16.5% soar in 2021.

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The issue in California just isn’t jobs, because the state has loads of folks working and paying taxes. California’s unemployment fee tied a document low in September, and employment has practically returned to what it was earlier than the pandemic — at the same time as hiring has slowed in current months.

As an alternative, the issue is a declining inventory market — which means wealthy folks aren’t making as a lot cash. That’s a problem in California, the place a progressive tax system means the highest 1% of earners pay near half of the state’s earnings taxes.

The most important issue has been the federal government’s makes an attempt to decelerate the hovering prices of products and companies due to inflation. The Federal Reserve has accomplished this by elevating a key rate of interest, which has had a cascading impact on the remainder of the economic system. The S&P 500, an index of the five hundred publicly traded corporations in main U.S. industries, has fallen greater than 18% from its peak in January consequently.

A declining inventory market means there’s much less incentive for tech startups to start promoting shares of inventory to the general public. Tech corporations “going public” has been a dependable supply of money for California’s authorities, as a result of it makes lots of people very wealthy very quick — and all cash that’s taxable.

Final yr, 206 California-based corporations went public, creating an enormous windfall of tax income for the state. This yr, lower than 50 California-based corporations will go public, based on an estimate from the California Division of Finance — the Newsom administration’s funds company.

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“It doesn’t imply that tech itself just isn’t a supply of power, although it will not be a supply of as quickly rising revenues because it was a yr in the past for the state normal fund,” stated Jerry Nickelsburg, college director for the UCLA Anderson Forecast, which initiatives financial developments.

California collects the vast majority of its earnings taxes in April, the deadline for folks to file their state tax returns. However the state does get cash every month from “withholding taxes” — cash corporations withhold from staff’ paychecks every month and ship to the federal government. That income has been down considerably since June.

“What that means to our forecasters is … there have been layoffs and cutbacks in a few of the high-wage, high-tech sectors of the state’s economic system,” Division of Finance spokesperson H.D. Palmer stated. “It’s a mirrored image of the volatility of the inventory markets.”

It might additionally sign some volatility between Newsom and California’s Democratic-controlled state Legislature. This yr, Newsom scolded lawmakers for passing payments on the finish of the session that, when added all collectively, would have allowed $22 billion in new spending that was not accounted for within the state funds.

Newsom referred to as the proposed spending “exceptional.” He blocked most of it by vetoing these payments in September.

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“I made it crystal clear that we’re seeing financial headwinds,” Newsom stated.

Meeting Speaker Anthony Rendon, a Democrat from Los Angeles, stated lawmakers make proposals to profit their districts and the folks of California.

“What’s exceptional is that the Senate and Meeting have managed to unite on the funds lately,” Rendon stated. “We now have labored with the Administration to make California’s funds stronger, extra resilient and simply plain higher. We now have extra reserves and additional cash available now than ever earlier than. Our variations are minor in comparison with that achievement.”

Toni Atkins, the Democratic president professional tempore of the California Senate, stated it’s too early to know what the funds will appear like subsequent yr. However she stated “we’re extra ready than ever to guard our progress and stand up to a income downturn with out dangerous program cuts or center class tax will increase.”



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California

Caitlyn Jenner says she'd 'destroy' Kamala Harris in hypothetical race to be CA gov

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Caitlyn Jenner says she'd 'destroy' Kamala Harris in hypothetical race to be CA gov


Caitlyn Jenner, the gold-medal Olympian-turned reality TV personality, is considering another run for Governor of California. This time, she says, if she were to go up against Vice President Kamala Harris, she would “destroy her.” 

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Jenner, who publicly came out as transgender nearly 10 years ago, made a foray into politics when she ran as a Republican during the recall election that attempted to unseat Gov. Gavin Newsom in 2021. Jenner only received one percent of the vote and was not considered a serious candidate. 

Jenner posted this week on social media that she’s having conversations with “many people” and hopes to have an announcement soon about whether she will run. 

Caitlyn Jenner speaks at the 4th annual Womens March LA: Women Rising at Pershing Square on January 18, 2020 in Los Angeles, California. (Photo by Chelsea Guglielmino/Getty Images)

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She has also posted in Trumpian-style all caps: “MAKE CA GREAT AGAIN!”

As for VP Harris, she has not indicated any future plans for when she leaves office. However, a recent poll suggests Harris would have a sizable advantage should she decide to run in 2026. At that point, Newsom cannot run again because of term limits. 

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If Jenner decides to run and wins, it would mark the nation and state’s first transgender governor.  



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Northern California 6-year-old, parents hailed as heroes for saving woman who crashed into canal

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Northern California 6-year-old, parents hailed as heroes for saving woman who crashed into canal


LIVE OAK — A six-year-old and her parents are being called heroes by a Northern California community for jumping into a canal to save a 75-year-old woman who drove off the road. 

It happened on Larkin Road near Paseo Avenue in the Sutter County community of Live Oak on Monday. 

“I just about lost her, but I didn’t,” said Terry Carpenter, husband of the woman who was rescued. “We got more chances.” 

Terry said his wife of 33 years, Robin Carpenter, is the love of his life and soulmate. He is grateful he has been granted more time to spend with her after she survived her car crashing off a two-lane road and overturning into a canal. 

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“She’s doing really well,” Terry said. “No broken bones, praise the Lord.” 

It is what some call a miracle that could have had a much different outcome without a family of good Samaritans. 

“Her lips were purple,” said Ashley Martin, who helped rescue the woman. “There wasn’t a breath at all. I was scared.” 

Martin and her husband, Cyle Johnson, are being hailed heroes by the Live Oak community for jumping into the canal, cutting Robin out of her seat belt and pulling her head above water until first responders arrived. 

“She was literally submerged underwater,” Martin said. “She had a back brace on. Apparently, she just had back surgery. So, I grabbed her brace from down below and I flipped her upward just in a quick motion to get her out of that water.” 

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The couple said the real hero was their six-year-old daughter, Cayleigh Johnson. 

“It was scary,” Cayleigh said. “So the car was going like this, and it just went boom, right into the ditch.” 

Cayleigh was playing outside and screamed for her parents who were inside the house near the canal.

I spoke with Robin from her hospital bed over the phone who told us she is in a lot of pain but grateful.

“The thing I can remember is I started falling asleep and then I was going over the bump and I went into the ditch and that’s all I remember,” Robin said. 

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It was a split-second decision for a family who firefighters said helped save a stranger’s life. 

“It’s pretty unique that someone would jump in and help somebody that they don’t even know,” said Battalion Chief for Sutter County Fire Richard Epperson. 

Robin is hopeful that she will be released from the hospital on Wednesday in time to be home for Thanksgiving. 

“She gets Thanksgiving and Christmas now with her family and grandkids,” Martin said. 

Terry and Robin are looking forward to eventually meeting the family who helped save Robin’s life. The family expressed the same feelings about meeting the woman they helped when she is out of the hospital. 

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“I can’t wait for my baby to get home,” Terry said. 



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California may exclude Tesla from EV rebate program

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California may exclude Tesla from EV rebate program


California Gov. Gavin Newsom may exclude Tesla and other automakers from an electric vehicle (EV) rebate program if the incoming Trump administration scraps a federal tax credit for electric car purchases.

Newsom proposed creating a new version of the state’s Clean Vehicle Rebate Program, which was phased out in 2023 after funding more than 594,000 vehicles and saving more than 456 million gallons of fuel, the governor’s office said in a news release on Monday.

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“Consumers continue to prove the skeptics wrong – zero-emission vehicles are here to stay,” Newsom said in a statement. “We’re not turning back on a clean transportation future – we’re going to make it more affordable for people to drive vehicles that don’t pollute.”

The proposed rebates would be funded with money from the state’s Greenhouse Gas Reduction Fund, which is funded by polluters under the state’s cap-and-trade program, the governor’s office said. Officials did not say how much the program would cost or save consumers.

NEBRASKA AG LAUNCHES ASSAULT AGAINST CALIFORNIA’S ELECTRIC VEHICLE PUSH

California Gov. Gavin Newsom on Monday proposed creating a new version of the state’s Clean Vehicle Rebate Program if the incoming Trump administration scraps a federal tax credit for electric car purchases. (Photo by Justin Sullivan/Getty Images, File / Getty Images)

They would also include changes to promote innovation and competition in the zero-emission vehicles market – changes that could prevent automakers like Tesla from qualifying for the rebates.

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Tesla CEO Elon Musk, who relocated Tesla’s corporate headquarters from California to Texas in 2021, responded to the possibility of having Tesla EVs left out of the program.

Tesla automobile plugged in and charging a Supercharger rapid battery charging station for the electric vehicle company Tesla Motors, in the Silicon Valley town of Mountain View, California, August 24, 2016.

Tesla and other automakers may not qualify for the proposed tax credits, according to the governor’s office. (Getty Images, File / Getty Images)

“Even though Tesla is the only company who manufactures their EVs in California! This is insane,” Musk wrote on X, which he also owns.

BENTLEY PUSHES BACK ALL-EV LINEUP TIMELINE TO 2035

Those buying or leasing Tesla vehicles accounted for about 42% of the state’s rebates, The Associated Press reported, citing data from the California Air Resources Board.

Newsom’s office told Fox Business Digital that the proposal is intended to foster market competition, and any potential market cap is subject to negotiation with the state Legislature. 

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Ticker Security Last Change Change %
TSLA TESLA INC. 338.59 -13.97 -3.96%

“Under a potential market cap, and depending on what the cap is, there’s a possibility that Tesla and other automakers could be excluded,” the governor’s office said. “But that’s again subject to negotiations with the legislature.”

Newsom’s office noted that such market caps have been part of rebate programs since George W. Bush’s administration in 2005.

Democrat California Gov. Gavin Newsom

Newsom has pushed Californians to replace gas-powered vehicles with zero-emission vehicles. (Chip Somodevilla/Getty Images / Getty Images)

Federal tax credits for EVs are currently worth up to $7,500 for new zero-emission vehicles. President-elect Trump has previously vowed to end the credit.

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California has surpassed 2 million zero-emission vehicles sold, according to the governor’s office. The state, however, could face a $2 billion budget deficit next year, Reuters reported, citing a non-partisan legislative estimate released last week.

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