California Economy & Taxes

Income tax withholding in June came in $465 million (6%) above projections included in the 2024-25 budget agreement. Withholding was about 11% above last June, due in part to timing issues. Withholding growth remains solid by historical standards. lao.ca.gov/LAOEconTax/Art…

Income tax withholding in May came in $27 million (less than 1%) below new projections in the 2025-26 May Revision. May income tax withholding grew by about 3% above the prior year, reflecting the slowest year-over-year growth in the past six months. lao.ca.gov/LAOEconTax/Art…

New car registrations in CA grew 5% from Feb to Mar. March was the 4th highest monthly count of registrations in the last two years. It remains to be seen if this growth continues or if it was a transitory bump in anticipation of tariffs. lao.ca.gov/LAOEconTax/Art…

Our updated housing affordability tracker is now up. Purchasing a home in California continues to be historically unaffordable, fueled by pandemic-era price growth and continued elevation of mortgage rates. lao.ca.gov/LAOEconTax/Art…

March data for the US show annual inflation was similar to pre-pandemic averages. This follows higher inflation readings in Jan and Feb, especially in CA. Between Dec 2024 and Feb 2025, prices grew at an annualized rate of 5.1% in CA and 4.2% in the US. lao.ca.gov/LAOEconTax/Art…

From Dec 2024 to Feb 2025, seasonally adjusted new car registrations in CA declined by 8%. Dec registrations, however, had been the highest since mid-2022. As a result, Feb registrations still were around the average level over the last couple of years. lao.ca.gov/LAOEconTax/Art…

Income tax withholding in March came in $163 million (2 percent) higher the recent projections included in the 2025-26 Governor's Budget. Recent withholding has been running about 10 percent higher than the prior year. lao.ca.gov/LAOEconTax/Art…