How does California's budget compare to other states? California represents the fifth-largest economy in the world and its 39.25 million residents give it the largest population in the United States. California is not alone in its fiscal challenges. During the recession the depth of cuts in state and local government employment have been unprecedented according to the Rockefeller Institute of Government. As the economy has recovered, the unemployment rate was 4.3% as of December 2017 according to the Bureau of Labor Statistics. Total nonfarm employment grew 2.1% and government employment grew 1.9% from December 2016 to 2017. The sector that saw the greatest growth over the time period is construction, growing 7.1% over the 12 months.
According to the Tax Foundation, California’s total state and local tax burden in fiscal year 2012 ranks 6th highest nationally, at a rate of 11.0% of per capita income compared to the national average of 9.9%. Recent changes to the federal tax code in 2017 impact the amount that Californians can deduct state and local taxes from their federal income returns. In 2014, SALT deductions reduced Californians’ taxable income by $101 billion – more than twice that of second-place New York.
Data on the poverty rate from Compare50.org ranks California 11th of 50 states, with 16% of residents living in poverty. Mississippi ranks highest and New Hampshire lowest.
Comparison of Tax Rate by Type
California spends more total dollars for public services than other states largely due to its large population, so per-person (or "per capita") comparisons are the most useful. As of 2018, California ranks 5th in state and local spending per capita with $14,619.30. Alaska spends the most with $23,598.30 and Idaho spends the least with $7,417.30.
For more information on how California compares to other states on over 150 indicators, visit Compare50.org.