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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. California: Brown's Last Budget Hurrah

Author:
Brian DiSarro and Wesley Hussey
Publication Date:
01-2019
Content Type:
Journal Article
Journal:
California Journal of Politics and Policy
Institution:
Institute of Governmental Studies, UC Berkeley
Abstract:
California passed a 2018‒2019 budget with record budget surpluses as the state attention shifted to the upcoming 2018 election. This was Jerry Brown’s final budget after sixteen years as governor, a state record. Brown was concerned the state’s volatile income tax revenues might not hold up during a future recession and wanted to store as much of the surplus away in the state’s emergency “rainy-day” fund. Continuing the annual pattern, Democratic legislators wanted to spend some of the surplus on social services, including the increasing problems of homelessness and affordable housing. In addition, legislators began to address the long-ignored problem of sexual harassment in the capitol and was on the front line of the #MeToo movement, leading several legislators to resign. Democrats did well in the November elections, leading to an even bluer California.
Topic:
Governance, Budget, and State Funding
Political Geography:
United States and California

3. Hawaii: Priced Out of Paradise

Author:
Colin D. Moore
Publication Date:
01-2019
Content Type:
Journal Article
Journal:
California Journal of Politics and Policy
Institution:
Institute of Governmental Studies, UC Berkeley
Abstract:
Hawaii adopted a state budget that authorizes $14.3 billion in spending for FY2019. The Aloha State’s economy continues to benefit from record-breaking tourist numbers and robust federal military spending. Although the state’s unemployment rate is among the lowest ever recorded for any state in the nation, the cost of housing has made it increasingly difficult for working families to purchase a home. Tax revenues are strong, but they remain very dependent on the tourism industry. Hawaii also faces huge liabilities for pension and health care payments that are promised to retired state employees.
Topic:
Governance, Health Care Policy, Budget, and State Funding
Political Geography:
United States and California

4. New Mexico: The Lost Decade

Author:
Kim Seckler
Publication Date:
01-2019
Content Type:
Journal Article
Journal:
California Journal of Politics and Policy
Institution:
Institute of Governmental Studies, UC Berkeley
Abstract:
In January 2018, the New Mexico State Legislature convened for its regular session, a thirty day budget session, per its constitutional mandate. Thirty days later the legislative session ended quietly and the state of New Mexico closed the book on the great recession and a decade of financial and political strife. The 2018 legislature passed a $6.38 billion dollar budget, re-supplied dangerously low general fund reserves, and provided small raises to teachers and state employees. Oil and gas revenues are up, unemployment is slowly coming down and legislative-executive political battles have muted. The balanced budget, signed by the governor in early March, brings the state back to where it began almost 10 years before, leading one observer to refer to the time as the “lost decade in New Mexico” (Cole 2018).
Topic:
Governance, Budget, and Fiscal Policy
Political Geography:
United States and New Mexico

5. 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

6. 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