1. 11-7-09 US economy CA economy CA revenue picture
sluggish recovery expected
CA economy
sluggish recovery also expected
CA revenue picture
no longer deteriorating
several lean years ahead

2. Quarterly US real GDP growth, 2006-2009
% change, annual rate

3. GDP growth and job growth, 2006-2009
% change, annual rate
real GDP
jobs

4. Annual US real GDP growth, 1976-2009
% change

5. GDP growth and job growth, 1976-2009
% change
real GDP
jobs
: comparable?

6. This isn’t 1983 Federal Reserve can’t cut rates to stimulate economy
Bank sector is still a mess, reluctant to lend
Oversupply of residential and commercial real estate after bursting of bubble
Consumers overburdened with debt

7. Annual US real GDP growth, 1976-2015
% change

8. GDP growth and job growth, 1976-2015
% change
1983
1992
2002
2010

9. Recent job growth: CA v US
% change, annual rate US CA

10. Annual job growth: CA v US
% change CA US

11. 2008-09 CA General Fund revenue
$2.9b
Corporate tax
$9.8b
Personal income tax
$45.3b
Sales tax
$24.6b
Personal income tax
$45.3b

12. CA total General Fund tax revenue and PIT May forecast including Aug changes
$ billions
total
PIT

13. CA General Fund PIT revenue May forecast including Aug changes
$ billions

14. Capital gains, % of personal income
Unlike the other charts, we have hard data only through 2007 here so the red line is between 2007 and 2008, not between 2008 and 2009.

15. How is 09-10 shaping up? Jul-Oct: $22.7b, $1.4b below DOF forecast
DOF forecast does not include $3b of unspecified reductions so $1.4b is misleading
Withholding down 7%, wages and salaries probably not down that far

16. Uncertainties Will people withhold more? Estimated payments
Budget estimates $1.7b in 09-10
Did people reduce withholding before Nov. 1?
Estimated payments
Old law: people were supposed to send half Apr/Jun, half Sep/Dec but sent 2/3 Sep/Dec
New law: 30% April, 40% June, 30% Dec but how will people actually respond?