State finances

Main articles: California state finances and 2008–12 California budget crisis

Economic regions of California

State spending increased from $56 billion in 1998 to $127 billion in 2011.^[167][168] California, with 12% of the United States population, has one-third of the nation's welfare recipients.^[169] California has the third highest per capita spending on welfare among the states, as well as the highest spending on welfare at $6.67 billion.^[170] In January 2011 the California's total debt was at least $265 billion.^[171] On June 27, 2013, Governor Jerry Brown signed a balanced budget (no deficit) for the state, its first in decades; however the state's debt remains at $132 billion.^[172][173]
With the passage of Proposition 30 in 2012, California now levies a 13.3% maximum marginal income tax rate with ten tax brackets, ranging from 1% at the bottom tax bracket of $0 annual individual income to 13.3% for annual individual income over $1,000,000. California has a state sales tax of 7.5%, though local governments can and do levy additional sales taxes. Many of these taxes are temporary for a seven-year period (as stipulated in Proposition 30) and afterwards will revert to a previous maximum marginal income tax bracket of 10.3% and state sales tax rate of 7.25%.^[174]
All real property is taxable annually; the tax is based on the property's fair market value at the time of purchase or new construction. Property tax increases are capped at 2% per year (see Proposition 13).