In the opening months of the 2023-24 legislative session, state lawmakers proposed raising annual taxes and fees more than $185.6 billion, the California Tax Foundation reported March 16.
The foundation’s Tax and Fee Report tallies 38 proposals with higher taxes or fees. With fiscal estimates still being prepared, the cost to taxpayers has been quantified for only seven of the measures so far, for a cumulative total of $185.6 billion a year in additional taxes if all were approved.
The state’s operating deficit “could increase the likelihood that lawmakers propose more taxes and fees as the session continues,” the report notes.
In January, Governor Gavin Newsom proposed a $296.9 billion state budget that includes a Managed Care Organization (MCO) tax estimated to generate $6.5 billion in general fund revenue over the next three years and a $30 million tax increase by subjecting incomplete non-grantor trusts to California income tax. These proposals will be added to the foundation’s report if they are introduced as legislation.
The largest proposed tax increase is AB 1690 (Kalra), which expresses the intent to create a government-run health care program estimated to require at least $162.8 billion in tax increases. The second-largest tax increase, contained in AB 259 and ACA 3 (Lee), would impose a $22.3 billion “wealth tax” in California.
The Tax and Fee Report is a regular publication of the California Tax Foundation, updated throughout the year to reflect new legislative proposals. The report includes any measure estimated to cost $1 million or more per year in higher taxes or fees.