Annual Report 2011-2012


Economic Analysis

National Economy

In fiscal year 2011-12 real U.S. Gross Domestic Product (GDP) grew a bit slower than its average long-term growth rate, while many other important measures of economic activity improved only slowly from their levels reached in the “Great Recession” of 2008-2009. On the positive side, the U.S. economy was characterized by above average growth in real GDP earned by private citizens, very low interest rates, rising corporate profits, increasing employment, and declining unemployment rates. However, on the negative side, government production of goods and services declined, unemployment rates remained much higher than average, housing starts stayed at recessionary lows, and the federal government deficit stood as a high percentage of GDP by historical standards. Inflation was above its long term average, led by sharply higher gas prices.

The unemployment rate declined from 9.3 percent in fiscal year 2010-11 to 8.5 percent in 2011-12. However, this rate is high when viewed over a longer time period. In fiscal year 2006-07, the last fiscal year before the recession started, the unemployment rate averaged 4.5 percent.

Gross Domestic Product

Real GDP—the broadest measure of the nation’s output of goods and services—rose 2.0 percent in fiscal year 2011-12. Growth was slightly below the 2.2 percent increase of the prior fiscal year, and also lower than the fifteen-year average gain of 2.3 percent per year.

Growth in Real GDP

Real GDP by Sector

Over the last couple of fiscal years, private sector GDP has risen while the government component of GDP has declined. In 2011-12, private sector real GDP rose 3.2 percent, while public sector spending on goods and services by all levels of government fell by 2.9 percent. Total private and public sector real GDP would have risen 2.6 percent instead of 2.0 percent in 2011-12 if spending on goods and services by all levels of governments had not declined. This was the second consecutive year of such an unusual economic growth pattern. There have not been two consecutive years of such a magnitude of declines in government spending since the early 1970s.

2011-12 Growth in Real GDP and Major Components

Real domestic fixed investment spending led economic growth, increasing 9.8 percent. Fixed investment comprised 13 percent of total real GDP. As for components of fixed investment, nonresidential structures and equipment and software both grew at double-digit rates. Residential investment rose 6.2 percent, the first increase since 2005-06.

Export sales rose 4.8 percent. Exports growth was down from the prior year, as slowdowns in the growth of Asian and European economies reduced the demand for American-made goods and services. Exports made up 14 percent of total real GDP in 2011-12.

Real consumer spending rose 2.0 percent, the same as overall real GDP. Consumer spending is very important to the economy, since it accounts for 71 percent of total GDP. Consumer spending has three major components, durable goods, nondurable goods, and services. While all three components rose, durable goods spending increased the most, 6.6 percent in inflation-adjusted terms. Spending improved for a wide variety of durable goods, such as new vehicles, home furnishings, and building materials. Real nondurable goods spending rose 1.2 percent, while real services spending grew 1.6 percent.

Total government spending declined 2.9 percent after adjusting for inflation, following a 1.7 percent drop the prior fiscal year. The last two fiscal years had the only back-to-back weakening of real government spending since 1972-73, and the largest declines since 1953-54.

Federal government spending fell 3.6 percent in the June 30th–ending California fiscal year of 2011-12, as both defense and nondefense spending diminished. Real federal defense spending decreased 3.2 percent, while nondefense expenditures fell 4.3 percent. State and local government spending declined 2.5 percent, as many states continued to pare spending in ongoing responses to weak revenues during the recession.

Governments spend most of their revenues on consumption of goods and services, such as paying for teachers, social workers, or prison guards. However, investment—money spent on long-lived assets, such as roads, buildings, and computers—are another component of government spending. Real investment spending at all levels of government sank 7.0 percent, pulling down the overall average government spending decrease. Government spending on goods and services waned 2.1 percent.

Quarterly Real GDP Growth

Quarterly Real GDP Growth

Real GDP growth accelerated somewhat as the fiscal year unfolded. Growth averaged less than two percent in the first half, and above that in the latter half.

Corporate Profits

After firms sharply cut production, costs, and employment during the recession, many were well positioned to see increased profits when U.S. and worldwide economic growth resumed in mid-2009. U.S. corporate profits before taxes jumped 30.8 percent in fiscal year 2009-10, and were up an additional 13.9 percent and 7.7 percent in the following two fiscal years. Low borrowing costs and increased productivity contributed to boost profits since the recession ended. In 2011-12 U.S. profits accounted for 12.4 percent of GDP, the highest percentage since 1950-51.

Nonagricultural Employment and the Unemployment Rate

With the growth in overall real GDP and corporate profits, nonagricultural employment rose 1.4 percent. This was the fastest growth since fiscal year 2006-07, and close to the average annual growth of 1.4 percent rate for the three fiscal years prior to the recession.

The seasonally adjusted U.S. unemployment rate showed no consistent pattern throughout fiscal year 2011-12. The rate fell during the fall and winter of 2011, rose during the winter, and fell again in the spring. For the fiscal year as a whole, the U.S. unemployment rate averaged 8.5 percent, down from 9.3 percent the prior fiscal year. However, this rate is still considered to be at a recessionary level by most economists, and it does not include large additional numbers of people who are either underemployed or too discouraged to be actively looking for jobs.

Interest Rates

The U.S. Federal Reserve Board (Fed) maintained extremely low interest rates in 2011-12, essentially continuing its monetary policy instituted during the recession. The Fed kept the federal funds rate within a target range of zero to 0.25 percent. Three-month U.S. Treasury bill rates averaged 0.05 percent in fiscal year 2011-12, while ten-year U.S. Treasury bond yields averaged 2.08 percent. Interest rates were at historic lows. Ten-year U.S. Treasury bonds were the lowest yields on record for such a prolonged period of time. The last time ten-year Treasury bonds were at rates close to these levels was in the mid-1950’s.

Consumer Prices

The U.S. consumer price index rose 2.9 percent in 2011-12, above the ten-year average of 2.5 percent. Higher gasoline prices accounted for much of the above-average increase in the price index, as gas prices jumped 13.3 percent.

Housing Starts

Housing starts increased from 0.57 million units in 2010-11 to 0.68 million in 2011-12, a 16.7 percent gain. A majority of the increase was from new multifamily structures such as apartments and duplexes. Structures with five units or more increased 34.3 percent.

Despite the gain in housing activity, starts remained at recessionary levels compared to historical norms. Starts have been more than two-thirds below the fiscal year 2005-06 peak level of 2.03 million starts for the past four years. Housing starts are also well under numbers required to satisfy normal demographic demand. According to the U.S. Congressional Budget Office, annual construction of about 1.5 million units per year is necessary to keep up with growth of the population and to replace obsolete units.

Federal Budget Deficit

In federal fiscal year 2011-12 the deficit was $1.089 trillion, down from $1.297 trillion the prior fiscal year (federal fiscal years end September 30 of each respective year). In terms of percentages of GDP, the 2011-12 deficit improved to about 7.0 percent of GDP, down from 8.7 percent. However, the deficit percentage of GDP remains well above the 3.2 percent average over the past 40 years.

Growth in California and U.S. Nonagricultural Employment Fiscal Years 2000-01 Through 2011-12

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California Economy

By some important measures the California economy mirrored national growth in fiscal year 2011-12. California nonagricultural employment rose 1.5 percent, very close to the U.S. increase of 1.4 percent. California personal income increased 3.6 percent, nearly matching U.S. income growth of 3.7 percent.

However, while employment and income grew, other measures of economic activity and economic growth remained extremely weak in fiscal year 2011-12. Entering the recession the state was suffering from the impacts of the home lending crisis of 2007, as California has a disproportionately large share of the nation’s subprime and adjustable mortgages. The state is still suffering from the effects of a weak housing sector, more than the rest of the country, and these impacts are clearly evident in the entire economy, not just housing.

In 2011-12, the California unemployment rate averaged 11.2 percent, 2.7 percentage points higher than the national rate. The unemployment rate declined almost one percentage point from the prior fiscal year. However, the California unemployment rate remains very high by historical standards. The California unemployment rate has been in double digits for three straight fiscal years. The only other fiscal year that the California unemployment rate was in double digits since World War II was in 1982-83, when it averaged 10.7 percent.

Employment

California nonagricultural employment strengthened 1.5 percent in fiscal year 2011-12, as payrolls rose by 209,000 jobs. This was the largest increase in jobs since fiscal year 2005-06. Private sector payrolls increased by 255,000 jobs (2.2 percent), but the overall total was reduced by the loss of 46,000 government jobs. Despite the growth, there were 935,000 fewer nonagricultural jobs in 2011-12 compared to the peak reached in fiscal year 2007-08.

Private and Public Sector Changes in Jobs

Employment Sectors

Professional and Business Services. Professional and business services added 83,000 jobs in 2011-12, more than any other industry. This was a 3.7 percent expansion. Gains were widespread, with the largest percentage advances in consulting, computer systems design, and employment services. The professional and business services category is the state’s third largest sector, employing 15 percent of Californian nonagricultural workers.

Trade, Transportation and Utilities. In 2011-12, trade, transportation and utilities expanded by 1.8 percent. The trade, transportation and utilities sector is the state’s largest employment grouping, accounting for about 19 percent of all nonfarm jobs. The sector is comprised of three related industries: (1) wholesale trade, (2) retail trade, and (3) transportation, warehousing and utilities. Wholesale trade employment was up 2.3 percent, greater than the 1.7 percent increase in retail trade employment. Increases in exports boosted wholesale trade jobs associated with a wide variety of durable and nondurable goods. The gains in retail jobs were in a wide variety of retail businesses. The largest percentage gain in retail jobs was in electronic shopping and mail order houses, which increased employment by 12.6 percent. Employment in transportation, warehousing and utilities sector rose 1.6 percent.

2011-12 Changes in California Nonagricultural Employment

Leisure and Hospitality. Employment in leisure and hospitality industries, such as restaurants and hotels, enlarged by 2.5 percent in 2011-12. Over eighty percent of the new jobs were in food services. Leisure and hospitality industries employ about 11 percent of nonfarm Californian workers.

Educational and Health Services. Private educational and health services jobs rose by 2.7 percent in 2011-12. This is a relatively large sector, accounting for about 13 percent of nonfarm employment. Close to three-quarters of the jobs added in this sector were in health care and social services.

Construction. After five years of declines, construction employment gains emerged faster than average in fiscal year 2011-12. The construction industry expanded by 18,000 jobs, 3.2 percent. The job gains were widespread within various types of construction activity for both residential and nonresidential building construction. About 4 percent of all nonfarm jobs are in construction.

Other Sectors. Other sectors (defined here as mining and natural resources and other services) provided employment for 4 percent of nonagricultural workers. Employment in this group increased by 2.1 percent.

Manufacturing. Employment in manufacturing inched up 0.1 percent. Most of the gains were in durable goods manufacturing jobs. Manufacturing employs 9 percent of workers on nonagricultural payrolls.

Financial Activities. Employment in financial activities—lenders, insurance agents, and real estate brokers—rose 1.0 percent. Financial activities account for about 5 percent of nonfarm Californian jobs.

Information. Information providers—publishing, motion pictures, broadcasting, telecommunications and Internet services had a 0.4 percent decrease. Information jobs account for a relatively small share of state jobs, about 3 percent.

Government. Government employment continued to decline in fiscal year 2011-12, losing 40,000 jobs, a 1.9 percent decline. Over the past three fiscal years 137,000 government jobs have been cut, leaving government employment levels below those of fiscal year 2001-02. The job losses were most pronounced for federal and local governments, but the state also lost employment. Government is California’s second largest sector, with 17 percent of all California nonagricultural jobs.

Changes in Government Employment

Building Construction and Home Prices

The value of all private building construction permits issued in California rose by 7.4 percent in fiscal year 2011-12. The value of residential building permits rose by 6.8 percent, while nonresidential construction had an increase of 8.2 percent. Even with the gains, total construction permit values are still only about 43 percent of their 2005-06 peak levels.

Changes in the Value of Building Construction by Fiscal Year

About 50,000 home building permits were issued in 2011-12, up from 46,000 in 2010-11. Multifamily building permits rose by about 5,000 units, while single family home permits dropped by 1,000 units to a record low level. Over the past couple of years there has been a boom in multi-family home permits, as they have more than doubled from the lowest level reached during the recession.

Office, store, and industrial building construction valuations led the increases in nonresidential building construction. Offices and stores registered gains of 39 percent and 42 percent from the prior fiscal year, while industrial building permit valuations rose 18 percent.

Median home prices fell 2.3 percent to average $291,000 in fiscal year 2011-12. Many of these sales were foreclosures and other distressed sales. Data from the California Association of Realtors indicate that in June 2012 about 42 percent of California home sales were foreclosures or other distressed sales such as short sales. This was down from 49 percent in June 2011.

Median California home prices in 2011-12 were about half of their peak levels reached in fiscal year 2006-07, and were below the average for calendar year 2002. A total of 513,000 existing single-family homes were sold in fiscal year 2011-12, up 4.7 percent, and close to their 10-year average.

Vehicle Registrations

California new car and truck registrations rose 15 percent in fiscal year 2011-12. Despite the gain, new vehicle registrations in California in fiscal year 2011-12 were about 73 percent of the 2005-06 peak of 1.8 million units.

Changes in California and U.S. New Light Vehicle Sales

Consumer Prices

California consumer prices for all urban consumers rose 2.4 percent in 2011-12, up from a 1.7 increase in percent in 2010-11. California consumer prices rose less rapidly than those of the nation as a whole. At the national level, the consumer price index increased by 2.9 percent in 2011-12.

Changes in California and U.S. Consumer Prices

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Taxable Sales Activity

Transactions subject to the sales and use tax totaled $540.0 billion during the 2011-12 fiscal year. This was an increase of $41.5 billion, or 8.3 percent, compared to 2010-11. Taxable sales growth weakened somewhat during the second half of the fiscal year unfolded (see table, below).

2011-12 Taxable Sales

Growth in Actual Dollars Compared to Growth in Constant-Value Dollars

Taxable Transactions Percent Change From Prior Year In
Quarter Amount (Thousands of dollars) Percent of Total Actual Dollars Constant Value Dollars California Taxable Sales Deflator
July–September $131,976,723 24.4 8.8 3.6 5.0
October–December $140,338,004 26.0 8.9 5.0 3.7
January–March $128,420,564 23.8 8.5 5.5 2.9
April–June $139,307,211 25.8 7.2 6.2 1.0
Fiscal Year $540,042,501 100.0 8.3 5.1 3.1

Taxable sales increased by 5.1 percent over the previous fiscal year when measured in constant dollars. As the fiscal year unfolded, constant-dollar taxable sales growth strengthened throughout the year.

The California Taxable Sales Deflator—an index that tracks price changes only for commodities subject to the sales and use tax—showed annual inflation of 3.1 percent. The inflation rate shown by the Deflator for the fiscal year was above the 2.4 percent indicated by the California Consumer Price Index, which also measures price increases for housing costs and services, which are not subject to the sales and use tax. Price growth as measured by the Deflator weakened during the fiscal year, falling from 5.0 percent in the summer of 2011 to 1.0 percent by the spring of 2012. Much of the decrease in the growth rate of Deflator in the second half was from gasoline prices, whose growth sharply decelerated.

Taxable Sales by Industry

Taxable sales consist of sales made by two major groups of sellers: (1) retail and food services industries and (2) all other outlets. Taxable sales of all other outlets are mostly business equipment and construction goods. In fiscal year 2011-12 taxable retail and food services sales accounted for about 68 percent of total taxable sales, with the remaining 32 percent from all other outlets.

Taxable sales made by retail and food services industries increased 8.2 percent in fiscal year 2011-12. Taxable sales from all other outlets rose faster, 8.7 percent growth. The more rapid taxable sales gains for all other outlets is consistent with national data showing greater growth in fixed investment spending (business purchases) than in personal consumption spending.

Retail taxable sales made by motor vehicle dealers, food services, and gasoline stations, were the three largest retail industries, each comprising close to 11 percent of total taxable sales in fiscal year 2011-12. Taxable sales made by general merchandise stores followed closely, accounting for 9.1 percent of the total. Taxable sales were widely dispersed among other retail industries, ranging from 0.6 percent to 5.7 percent of the total.

Industry Components of 2011-12 Taxable Sales

While taxable sales in all major retail industries increased in 2011-12, those made by car dealers and gasoline stations rose the most, 14.0 percent and 12.0 percent. Following a national trend, California car sales were very strong in fiscal year 2011-12. Taxable sales made by both new car and used car dealers posted double-digit increases. Other motor vehicle sales (including motorcycles, recreational vehicles, pleasure boats, and pleasure aircraft) were also strong. While gallons of gasoline sold fell 0.8 percent, gas prices rose 13.1 percent, accounting for the rise in sales made by gas stations.

The next fastest growing retail industry was nonstore retailers, which saw its sales rise 11.1 percent. Much of these sales are from direct sellers such as electronic commerce and mail order houses, categories having strong sales growth over the past several years. Clothing stores and restaurants also posted above-average sales gains. Taxable sales made in health and personal care stores had an 8.2 percent growth, close to the overall average. The rest of the retail industries had taxable sales gains ranging from about 1 percent to 7 percent.

Appendix Table 19 shows details on taxable sales activity and the number of sales tax permittees by business type. Appendix Table 20 shows taxable sales by county.

Growth in Taxable Sales by Industry

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Revenue Growth

Tax programs administered by the BOE produced state and local revenues totaling $52,451,300,000 during fiscal year 2011-12. This was a decrease of about $1.3 billion, or 2.4 percent, from 2010-11. The ending of the temporary 1.0 percent sales and use tax rate increase on June 30, 2011 causes percentage comparisons to the 2010-11 fiscal year to differ significantly from the change in taxable sales over the same time period.¹

Please note: Under AB x3.3, (Statutes of 2009) the state portion of the sales and use tax rate rose from 5 percent to 6 percent, starting April 1, 2009. The higher rate was in effect until June 30, 2011.

Revenues from each tax are presented in the text table "Comparison of Revenues, 2010-11 and 2011-12." Additional detail and historical comparisons are found in Table 2.

Sales and Use Taxes

Sales and use taxes contribute 79 percent of the revenue from BOE-administered tax and fee programs. Combined revenue from all state and local sales and use taxes and fees totaled $41,196,805 in 2011-12, a decrease of 3.1 percent from 2010-11. The state portion of sales and use taxes declined 9.4 percent, while the local portion increased 9.7 percent.

Without legislative changes, we would expect the growth rates for each to be virtually identical in most years. However, as mentioned earlier, a temporary tax increase ended June 30, 2011, causing fiscal year 2011-12 revenues to decline even as taxable sales rose. In addition to the ending of the temporary rate increase, legislative changes to the diesel excise tax caused a further disparity in the growth rates of the state and local portions of the sales and use taxes. The provisions affecting diesel tax revenues were enacted by Assembly Bill x8-6 (Chapter 11, Statutes of 2010) and Senate Bill 70 (Chapter 9, Statutes of 2010). These law changes, commonly called the “fuel tax swap” provide for a combination of lowering the sales and use tax rate applicable to sales of diesel fuel and simultaneously raising the state excise diesel fuel tax, effective July 1, 2011. (This legislation also resulted in a similar swap for gasoline that became effective July 1, 2010.) Consequently, compared to the fiscal year 2010-11 figures, state sales and use tax revenues are lower and diesel tax revenues are higher for each taxable gallon of diesel sold in California.

One more legislative change affects the split between state and local revenues in fiscal year 2011-12. As a part of “realignment” in the 2011-12 budget plan, some program responsibilities and revenues were shifted from the state to local governments, starting July 1, 2011. The Local Revenue Fund 2011 was established at a tax rate of 1.0625 percent, which is a diversion from the General Fund rate.

The state’s portion of the sales tax was $25,846,137,000 (including fees and the fiscal recovery fund). The portion allocated to other jurisdictions—cities, counties and special districts—totaled $15,350,668,000 including allocations to the Local Revenue Fund and the Public Safety Fund. Sales and use tax details are provided in Tables 18 through 23B.

By the end of the fiscal year, special district taxes were being levied by 137 jurisdictions in 44 counties (see "District Transactions (Sales) and Use Tax," in the Revenues and Operations chapter). These counties are the source of 97 percent of all taxable sales in the state. Some districts cover entire counties while others are restricted to city limits or other legal boundaries. Special district information is located in Table 21C. Table 23B lists total sales and use tax rates by county.

Special Taxes

Fuel taxes. In 2011-12, the state’s fuel tax revenues totaled $5,590,241,000, a 1.6 percent decrease from the previous fiscal year. Gasoline excise tax revenues were up 0.3 percent. Distribution of gasoline for highway use was 14.6 billion gallons, down 0.9 percent from fiscal year 2010-11. Higher gasoline prices, which rose 13.1 percent during the fiscal year, were a major factor contributing to the decline in gas consumption. Gasoline excise tax revenues being up with consumption declining is an anomaly caused largely by timing differences resulting from the fuel tax swap.

Jet fuel tax revenues rose 6.3 percent, as airline travel increased with the economic recovery. The fuel tax swap discussed earlier greatly affected diesel tax revenues, which fell 23.4 percent. Historical fuel tax data are presented in Tables 24–26.

Cigarette and tobacco taxes and fees. Revenue from excise taxes on cigarettes and other tobacco products totaled $901,157,000 in 2011-12, falling 1.1 percent from the previous year. For more information on these taxes, see Tables 30A and 30B.

Insurance Taxes. Insurance taxes were $1,988,859,000 in 2011-12, a 2.8 percent increase. For more information on these taxes, see Tables 31-33.

Alcoholic beverage tax. The state’s excise tax revenues from alcoholic beverages increased 3.6 percent from 2010-11 levels to total $346,252,000 for the fiscal year. The percentage increase was similar to the national gain in alcohol sales over the same time period. Revenues from beer and wine rose 2.4 percent to $162,198,000. Revenues from distilled spirits rose faster, 4.7 percent to $184,054,000. Tax rates range from twenty cents a gallon for wine to $3.30 per gallon for distilled spirits. For historical data on taxes, total apparent consumption, and per-capita apparent consumption by major type of beverage, see Tables 27-29.

Electricity, telephone, and natural gas surcharges. The electrical energy surcharge, levied on the use of electricity in California, produced $74,163,000 in 2011-12, jumping 30.3 percent from the previous year. Increases in rates accounted for much of the gain. The natural gas surcharge produced $646,308,000 rising 8.2 percent. The emergency telephone users’ surcharge, which funds the 911 statewide emergency number system, totaled $83,313,000, a decrease of 3.7 percent. Additional detail and historical comparisons are provided in Tables 34 and 35.

Hazardous substance taxes and other environmental fees. Revenues from hazardous substance taxes and other environmental fees totaled $661,102,000, a 7.0 percent decrease from 2010-11. Rate decreases for the electronic waste recycling fee were responsible for much of the revenue decline. These taxes and fees are used to fund specific environmental programs. Additional detail and historical comparisons are provided in Tables 36A and 36B.

Property Taxes

Locally collected property taxes on state-assessed properties amounted to $947,000,000, an increase of 8.3 percent. The private railroad car tax, levied on railroad cars owned by firms that do not operate railroads, produced $8,041,000, an increase of 29.7 percent.

The timber yield tax, which is levied when timber is harvested to substitute for an annual value-based property tax, totaled $8,061,000. While this was a 24.4 percent increase, timber tax revenues remain well below those reported prior to the recession. In fiscal year 2006-07, the last fiscal year before the recession, timber yield tax revenues were $15,301,000.

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Comparison of Revenues, 2010-11 and 2011-12

In thousands of dollars

Sales and Use Taxes

Revenue Source 2010-11 2011-12 Percentage Change
State Tax 1,2,3 $27,304,440 $19,242,348 -29.5
Local Revenue Fund state sales tax (0.50%) 2,461,759 2,722,030 10.6
Public Safety Fund sales tax (0.50%) 2,461,610 2,721,846 10.6
Fiscal Recovery Fund sales tax (0.25%) 1,217,117 1,345,698 10.6
Local Revenue Fund 2011 (1.0625%)3 - 5,247,531 8
City and county sales tax (0.75%) 3,681,279 4,009,624 8.9
County Transportation tax (0.25%) 1,228,097 1,329,474 8.3
Special district taxes 4,161,245 4,567,694 9.8
Other taxes and fees 2,116 10,560 399.04
Totals 42,517,662 41,196,804 -3.1

Fuel Taxes and Fees

Revenue Source 2010-11 2011-12 Percentage Change
Gasoline and Jet Fuel 2 5,205,905 5,222,742 0.3
Diesel and Use Fuel 5 477,456 367,499 -23.0
Totals 5,683,361 5,590,241 -1.6

Revenue Source 2010-11 2011-12 Percentage Change
Alcoholic Beverage Taxes 334,193 346,252 3.6

Cigarette and Tobacco Products Taxes

Revenue Source 2010-11 2011-12 Percentage Change
Cigarette tax 95,994 95,042 -1.0
Cigarette and Tobacco Products Surtax 285,019 283,420 -0.6
Breast Cancer Research Cigarette Stamp Tax 23,652 22,540 -4.7
California Children and Families First Cigarette Stamp Tax 504,963 498,497 -1.3
Cigarette and Tobacco Products Licensing Fee 1,694 1,657 -2.2
Totals 911,322 901,157 -1.1

Revenue Source 2010-11 2011-12 Percentage Change
Insurance taxes 1,934,385 1,988,859 2.8
Electrical Energy Surcharge 56,915 74,163 30.3
Natural Gas Surcharge 597,161 646,308 8.2
Emergency Telephone Users Surcharge 86,507 83,313 -3.7
Hazardous Substances Taxes and other environmental fees 6 710,604 661,102 -7.0

Revenue Source 2010-11 2011-12 Percentage Change
Local taxes on state-assessed properties 7 874,658 947,000 8.3
Timber yield tax 6,480 8,061 24.4
Private Railroad Car Tax 6,201 8,041 29.7
Grand Total $53,719,450 $52,451,300 -2.4

Sources of State Revenue, 2011-12

1 Effective April 2009, the state sales tax rate rose from 5 percent to 6 percent and was in effect until June 30, 2011.

2 Effective July 1, 2010, under the Fuel Tax Swap, purchases and sales of gasoline (excluding aviation gasoline) are exempt from the state portion of the sales and use tax rate (then 6 percent), and a corresponding increase in the excise tax rate on that gasoline was imposed.

3 The Local Revenue Fund was created on July 1, 2011 at a rate of 1.0625 percent. At the same time the state sales tax rate was reduced to 3.9375 percent.

4 Effective January 1, 2011, fees includes collection recovery costs.

5 Includes diesel fuel taxes collected under the International Fuel Tax Agreement (IFTA) implemented on January 1, 1996.

6 Includes revenues from the hazardous substances tax, integrated waste management fee, underground storage tank maintenance fee, tire recycling fee, oil spill prevention and administration fee, oil spill response fee, childhood lead poisoning prevention fee, occupational lead poisoning prevention fee, marine invasive species control fee, water rights fee, and electronic waste recycle fee.

7 Collected by county tax collectors.

8 Not computed.

Note: Detail may not compute to total due to rounding.

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Sources of State Revenue, 2011-12

Board of Equalization

Major Taxes and Licenses 2011-12 Revenue (in thousands) Percent Change 2011-12 Percentage of Total State Revenue
Sales and Use Tax1 28,536,238 -7.94 23.96
Gasoline and Jet Fuel Tax 5,181,536 -0.96 4.35
Diesel and Use Fuel Taxes 362,994 -23.41 0.30
Insurance Gross Premium Tax 2,416,073 4.73 2.03
Cigarette and Tobacco Products Tax 895,677 -1.06 0.75
Alcoholic Beverage Tax 346,000 3.54 0.29
Totals, Major Taxes and Licenses 37,738,518 -6.24 31.69
Totals, Minor Revenues2 1,472,927 1.07 1.24
Grand Total, BOE 39,211,445 -5.98 32.93

Other Agencies

Major Taxes and Licenses 2011-12 Revenue (in thousands) Percent Change 2011-12 Percentage of Total State Revenue
Personal Income Tax 55,024,435 8.94 46.21
Corporation Tax 7,949,000 -17.32 6.68
Motor Vehicle "in lieu" Tax 2,048,751 -35.34 1.72
Trailer Coach Fees "in lieu" Tax 23,096 -28.94 0.02
Motor Vehicle Registration and Other Fees 3,836,019 14.19 3.22
Horse Racing (Parimutuel) License Fees 15,838 16.90 0.01
Totals, Major Taxes and Licenses 68,897,139 3.30 57.86
Totals, Minor Revenues 10,968,226 -22.22 9.21
Grand Total 79,865,365 -1.15 67.07
Total State Revenue 119,076,810 -2.80 100.00
Major Taxes 106,635,657 -0.29

Source: 2013-14 Governor’s Budget

1 Includes revenues from the state sales tax, the state disaster relief tax, the local revenue tax, and the fiscal recovery fund sales tax.

2 Includes private railroad car, electrical energy, natural gas, emergency telephone, and environmental fees.

Note: Percentage detail may not compute to totals due to rounding.


Sales and use taxes 28,536,238
Fuel Taxes 5,544,530
Other BOE revenues 5,130,677
Personal Income tax 55,024,435
Corporation tax 7,949,000
Motor vehicle and trailer taxes 5,907,866
Other revenues 10,984,064
Total 119,076,810

2011-12 Sources of State Revenues

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