Volatility in State Tax Structure Targeted in New Report
February 9, 2017
The Legislative Analyst’s Office (LAO) recently published a report examining California’s personal income tax (PIT) base and its volatile returns. Since over two-thirds of the state General Fund is comprised of PIT revenues, volatility is a highly significant issue which can have dire effects on the state budget. Governor Brown’s January Budget proposal takes this into account, with great caution due to the uncertainty for the coming fiscal year. The report provides an explanation behind the volatility and offers a historical glance at past fluctuations in PIT revenues.