For the last 50 years, California law has prohibited cities, counties, and governmental subdivisions from levying and collecting any income tax on any person, whether or not a California state resident. This puts a strain on these entities in times of fiscal uncertainty, which are upon us now, according to one state assembly member, Phil Ting, who represents San Francisco.
In a December 2016 press release, Ting pointed to a number of threats that jeopardize the state’s fiscal health. These include the uncertainty of the Affordable Care Act, the repeal of which could cost California over $20 billion in federal funds, and a trade war with China, which could cost California 730,000 jobs. In addition, budget shortfalls in jurisdictions that have adopted Sanctuary City policies, like San Francisco, may be exacerbated by a withdrawal of federal funding.