Welcome to our new newsletter!
I am proud and honored to serve you as California’s 34th State Treasurer. Every day I am fighting hard on your behalf for shared prosperity for all, as is my dedicated team at the State Treasurer’s Office. We are focused on sound investing that safeguards public funds, expands jobs, improves education, and helps combat climate change.
The Treasurer’s Office provides financing for our schools, roads, housing, levees, public facilities, hospitals, and other crucial infrastructure projects that better the lives of all Californians.
See how we can best serve you and your community by viewing a list of programs administered through my office here:https://www.treasurer.ca.gov/programs.asp.
As Treasurer I provide oversight for the state’s surplus funds. In 2018, we sold more than $14.4 billion of bonds. As the state’s primary banker, I also handle more than $2 trillion in disbursements within a typical year and oversee an investment portfolio of more than $90 billion, approximately $20 billion of which are local government funds.
Here are the policies I intend to focus on during the first half of 2019.
Affordable Housing
Bonds and tax credits are a major funding source for affordable housing. As Treasurer, I am looking for ways to get the biggest “bang for our buck,” which is why I recently held a five city “listening tour” across California. I wanted to hear from people like you about how my office can better do business. This means assessing our regulations for the California Debt Limit Allocation Committee (CDLAC), which allocates bond authority to issuers throughout California, and for the California Tax Credit Allocation Committee (TCAC), which allocates tax credits, to ensure we are incentivizing gr
eater affordable housing production with existing dollars.
Meanwhile, $100 million in Veterans general obligation bonds pursuant to Proposition 1, the Veterans and Affordable Housing Bond Act of 2018 approved by voters last November, are expected to be issued in March.
This fits with my priorities to build affordable homes, create jobs and boost the economy. We will continue to evaluate how we can provide comprehensive solutions to providing affordable housing for veterans. We are researching, for example, how we can deliver one-stop resource centers for everything from mental health care to information on VA resources to veterans living in affordable housing communities.
Taxation Fairness
A recent court decision authorizes states to begin collecting sales and use tax from online and out-of-state retailers without a physical presence in California. Amazon and other online retail giants are now required to collect the taxes on behalf of their third party sellers to ensure California gets all the tax dollars due. Such tax collection is expected to bring in up to $1 billion annually in additional state and local tax revenue. I am proud to sponsor Assembly Bill 147 with Assemblywoman Autumn Burke and Senator Mike McGuire. This legislation would establish a workable mechanism to collect taxes from out-of-state online retailers -- taxes that California’s brick-and-mortar retailers are already paying.
Savings and Thrift for Future Generations
ScholarShare 529 is a state-sponsored, tax-advantaged college savings plan that’s helping families and individuals plan for the cost of higher education. It’s available to any California citizen or taxpayer. It is estimated that Californians have invested $4- to $26-billion in other similar state programs because California does not offer an income tax incentive, or their financial advisors recommended other plans because of perceived limitations to investing in California’s plan. I am proud to announce my collaboration with Assembly Majority Leader Ian Calderon on AB 211, which would create a state income tax deduction when an individual contributes to one or more ScholarShare 529 accounts up to an annual limit of $5,000 for single taxpayers and $10,000 for those who file jointly.
The Will of the People on Cannabis
In November 2016, voters approved Proposition 64 legalizing adult recreational use of cannabis. The intent was to eliminate the illicit market while generating revenue for state and local government through taxes on cannabis and cannabis products. For more than 20 years, California had legal medical cannabis, but lacked a statewide regulatory structure. This created a “gray” market where it was difficult to distinguish between legal and illicit operators. To reduce the illicit market, California must encourage cannabis operators to come into the legal and regulated system. One way to incentivize compliance is by temporarily lowering the state’s tax on cannabis so the legal market’s prices are more comparable to black market prices. I have joined in support with Assemblymember Rob Bonta and a strong bipartisan coalition of legislators on AB 286, which would do just that. By reducing the state excise tax from 15 percent to 11 percent and by eliminating the cultivation tax altogether through 2022, we create a better climate for start-up cannabis businesses to enter the regulated marketplace.
Economic Development
Since the dissolution of community redevelopment agencies in 2011, local governments have lacked some critical resources necessary to fund many important activities, including affordable housing and infrastructure. Redevelopment projects were a significant source of funding for affordable housing and infrastructure for local governments. In the Treasurer’s Office, we want to connect private investors with worthy projects that need investment across the state.
Opportunity Zones are a new tool for community economic development. Established in the Tax Cuts and Jobs Act of 2017, Opportunity Zones provide tax incentives for investment in designated census tracts. California’s zones will support new investments in environmental justice, sustainability, climate change, and affordable housing.
Investment in Opportunity Zones will enhance our working relationships with local governments and those in the private sector, attracting private sector investors who can forge public-private partnerships in some of our most distressed communities in California.
California’s resources are for the people. I see it as my job to ensure that the world’s fifth largest economy is working on behalf of all Californians. If I can be of service, please call me or members of my team at (916) 652-2995 or send me an email at Fiona.Ma@treasurer.ca.gov.
Please follow the State Treasurer’s Office on Twitter at @CalTreasurer, and on Facebook at California State Treasurer’s Office to get the most up to date news about the office.
In Peace and Friendship,
Fiona Ma, CPA
California State Treasurer