Economic Analysis Tool for the California Budget

Abstract

California’s deficit has been a political issue for many years. High levels of state spending, and a high unemployment rate due to the current recession, are contributing factors to this problem. Since California voters disapprove of any tax increase to balance the budget, a solution to the deficit needs an alternative approach. To look at the possible spatial effects of any changes to the yearly budget, a geographic information system (GIS) was used to build a model to help in developing a plan to spread the budget cuts more evenly across California. Analyzing these effects could help policy makers in developing the spatial distribution plan of the budget cuts since the State government does not want to increase economic turmoil. As a demonstration, the budget analyst tool is used to calculate potential effects of income and sales tax increases using 2009-2010 economic data. The user can make assumptions as to how to spread tax increases evenly throughout the state by running the model with different tax rates until the desired effects are achieved. The results are used to view the effects of the tax increases and understand the spatial pattern associated with the increases

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This paper was published in University of Redlands.

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