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1. Alaska: Arctic Groundhog Day

Author:
Glenn Wright and Tasha Elizarde
Publication Date:
01-2019
Content Type:
Journal Article
Journal:
California Journal of Politics and Policy
Institution:
Institute of Governmental Studies, UC Berkeley
Abstract:
Since the early 1980s, Alaska has relied on oil taxes for almost all of its state government revenue. Like many resource-based economies, including many of the Western states, the result is a boom and bust economy. With production declining and the price of Alaska’s North Slope crude around $75 per barrel, the state is in a bust cycle, with a large state government deficit. Although Alaska is experiencing a somewhat improved revenue outlook compared to 2017, the state’s executive and legislative branches continue to wrestle with unpopular political choices; do we implement a state income tax, tap the state’s Permanent Fund sovereign wealth fund (and thereby reduce or eliminate Alaska’s annual Permanent Fund Dividend payment to Alaskan residents), or some combination of those two approaches? In Spring 2018, the Alaska State Legislature—supported by Independent Governor Bill Walker—chose the first of these options, tapping Alaska’s Permanent Fund to fund state government operations for the first time. The result is a dramatically improved fiscal position for 2019, and although the state remains in deficit, chances of a balanced budget are much improved. Use of the Permanent Fund has not been popular, however; a number of incumbents who supported the use Permanent Fund earnings were defeated in November 2018 by opponents who campaigned on the issue. At the moment, Alaska’s fiscal future remains in doubt.
Topic:
Governance, Budget, Economic Policy, and Fiscal Policy
Political Geography:
United States and Alaska

2. Washington: Education, Carbon, and Taxes Oh My!

Author:
Erin Richards, Michael Artime, and Francis Benjamin
Publication Date:
01-2019
Content Type:
Journal Article
Journal:
California Journal of Politics and Policy
Institution:
Institute of Governmental Studies, UC Berkeley
Abstract:
As a state that overwhelmingly relies on sales tax revenue, Washington benefitted from a strong economy in 2018. However, that revenue was necessary as the state faced a court ordered deadline to fully fund K-12 education, and a need to address transportation, mental health, and a capital budget held over from the 2017 session. This is all in addition to creating a new Department of Children, Youth and Families. The state government was under unified government for the first time since 2012 which may have contributed to the state completing its work in a supplemental budget year on time and adjourning by the March deadline.
Topic:
Budget, Tax Systems, and Economic Policy
Political Geography:
United States and Washington

3. Time to Yell “Cut?” An Evaluation of the California Film and Production Tax Credit for the Motion Picture Industry

Author:
Michael Thom
Publication Date:
01-2018
Content Type:
Journal Article
Journal:
California Journal of Politics and Policy
Institution:
Institute of Governmental Studies, UC Berkeley
Abstract:
Enacted in 2009, California’s Film and Production Tax Credit was a policy reaction to fears that the state had lost motion picture industry jobs to other states and countries. The incentive has since been allocated over $1 billion in taxpayer funding. Advocates hail the tax credit as a success, but is there evidence to support that claim? This study examines motion picture industry employment in California from 1991 through 2016 to determine the impact of the Film and Production Tax Credit and competing incentives offered by other governments. Results show the tax credit had no significant effect on changes in three occupational categories associated with the motion picture industry. Employment was similarly unaffected by competing incentives. Motion picture industry employment in California instead appears to track the national labor market. These findings were robust to several alternative measures and model specifications and advise that California policymakers should eliminate the Film and Production Tax Credit as soon as possible.
Topic:
Governance, Culture, Budget, Film, and Economic Policy
Political Geography:
United States and California

4. Tuition as a Path for Affordability? The Pursuit of a Progressive Tuition Model at the University of California

Author:
John Aubrey Douglass and Patrick A. Lapid
Publication Date:
01-2018
Content Type:
Journal Article
Journal:
California Journal of Politics and Policy
Institution:
Institute of Governmental Studies, UC Berkeley
Abstract:
In an environment of declining public funding and rising tuition rates, many public universities in the US are moving toward a “progressive tuition model” that attempts to invest approximately one-third of tuition income into institutional financial aid for lower-income and middle-class students. The objective is to mitigate the cost of rising tuition and keep college affordable. But is this model as currently formulated working? Utilizing data from the Student Experience in the Research University (SERU) Survey of undergraduates and other data sources, this study explores these issues by focusing on students at the University of California (UC) and 10 research-intensive public institutions that are members of the SERU Consortium. Focusing mostly on survey data from 2014, we find that increases in tuition, and costs related to housing and other living expenses, have not had a significant negative impact on the number of lower-income students attending UC or on their behaviors. Since the onset of the Great Recession, there has been an actual increase in their number—a counterintuitive finding to the general perception that higher tuition equals less access for the economically vulnerable. At the same time, there is evidence of a “middle-class” squeeze, with a marginal drop in the number of students from this economic class. With these and other nuances and caveats discussed in this study, the progressive tuition model appears to have worked in terms of affordability and with only moderate indicators of increased financial stress and changed student behaviors. This study indicates that tuition can and should be a part of the search for a viable funding model for many public universities, like UC, and that demanding lower or no tuition does not appear to be based on any substantial analysis of the correlation of tuition and affordability.
Topic:
Education, Economic Policy, Higher Education, and State Funding
Political Geography:
United States and California

5. Allocating Transportation Revenues to Support Climate Policies in California and Beyond

Author:
Gian-Claudia Sciara and Amy E. Lee
Publication Date:
01-2018
Content Type:
Journal Article
Journal:
California Journal of Politics and Policy
Institution:
Institute of Governmental Studies, UC Berkeley
Abstract:
California has established itself as a leader in efforts to reduce greenhouse gas emissions from transportation. However, the state has not reflected its ambitious policies for greenhouse gas (GHG) reduction and climate action in its practices for allocating state transportation funding. This paper reviews the complex systems through which California generates and allocates state revenue for transportation investment. It finds that the state’s framework for funding transportation projects and programs is disconnected from its GHG goals, reflective more of historical political deals than of contemporary climate policy. The paper also suggests preliminary steps for revising this framework to reinforce GHG reduction goals. Such recommendations are particularly salient given the state’s recently completed study of road user charges as an alternative transportation revenue source, as well as the passage of new legislation that restructures the state’s fuel taxes (Senate Bill 1, 2017). Implementation of road charges or any other new or revised transportation revenue source would need to address the disposition of revenues generated. This paper argues that California should use any such opportunity to align the distribution of state transportation dollars with its climate objectives, not fall back on status quo allocation practices.
Topic:
Climate Change, Governance, Tax Systems, Economic Policy, and State Funding
Political Geography:
United States and California