MEMORANDUM

To: Interested Parties

From: Blue Sky Consulting Group
Date: May 14, 2024
Re: Feasibility and Fiscal Impacts of Secession - County of San Bernardino

In November 2022, San Bernardino County voters approved Measure EE, which directed County officials
to study options the County could pursue to ensure that it is receiving its “fair share” of state and
federal funding. One of the options contemplated by the measure is the County’s secession from the
State of California. This report provides an overview of the requirements that must be met for regions to
secede from states and along with an analysis of the likely fiscal impacts of secession on the County.
Secession is Rare and Faces Several Political Hurdles
Not since 1861, when West Virginia seceded from Virginia following the outbreak of the Civil War, has a
new state been created by the partition of an existing state. In California, several recent efforts to
partition the state—including “Cal 3,” “Six Californias,” and the “State of Jefferson”—have failed to due
to a combination of legal challenges and political opposition. Secession requires the approval of a state’s
legislature, the approval of Congress and the President, and—if the seceding region seeks to join a
neighboring state—the approval of that state as well. In California, a 2018 state supreme court ruling
removing the Cal 3 initiative from the November ballot suggests that the approval of the state
Legislature—and not just the state’s voters—will be necessary. At the federal level, Congressional
approval would require the support of a majority of the House of Representatives and likely at least 60
of the nation’s 100 Senators to prevent a filibuster in the event of opposition to the proposed secession.
If the County Secedes, it Will Be Difficult to Replace the State Funding California Provides
Secession would trigger a wide variety of economic impacts countywide alongside fiscal impacts on the
County government, local municipal governments, and school districts. The new state that would result
from secession—whether an independent State of San Bernardino, or an enlarged Arizona or Nevada—
would impose laws and regulations different from California’s, while County residents and businesses
would be subject to a new state tax regime.
Many of these impacts are uncertain or difficult to quantify. It is possible, for example, that a change in
the regulatory environment would strengthen the local economy. Similarly, a new state bureaucracy
may prove able to provide government services more cost-effectively. The opposite (i.e. a weaker
economy and higher costs) is also a possibility.
Though these changes are difficult to predict, the fiscal impacts of secession on available budgetary
resources are more straightforward, as they ultimately depend on how the available state tax base
would change post-secession. State fiscal data shows that, on a per capita basis, the tax revenues
generated in San Bernardino County are likely less than half the revenues generated statewide. This gap
is attributable to the state’s progressive personal income tax—which derives nearly half its annual
revenue from Californians earning more than $1 million annually. If the County were to secede to create
its own independent state, the newly formed state government, its local governments and residents
would lose access to their share of this revenue, which is generated across the existing State of
California. Even if this new state were to impose the same taxes as California at the same rates, per
capita state revenues would likely fall dramatically.
Similarly, Arizona and Nevada’s tax bases are also smaller (on a per capita basis) than California’s, given
that residents in these neighboring states are on average less affluent. Moreover, while these states
impose lower average per capita tax burdens overall, it is unlikely that the average San Bernardinan
would benefit substantially from a change in their state’s tax regime, as relatively few County residents
are subject to California’s higher marginal income tax rates, and the sales and property taxes imposed in
Arizona and Nevada are substantially like California’s. In other words, California’s average tax burden is
so much higher largely because of the revenues collected from the state’s richest residents, many of
whom live outside of San Bernardino County.
Legal and Historical Background
Under the Admissions Clause of United States Constitution, the secession of a county or region from a
state can only occur if the following requirements are met: “[N]o new State shall be formed … within the
Jurisdiction of any other State; nor any State be formed by the Junction of two or more States, or Parts
of States, without the Consent of the Legislatures of the States concerned as well as of the Congress." i
County secession thus explicitly requires at least two separate voter or legislative approvals: that of the
state from which the region is seceding and that of Congress. Additionally, if the region is seeking to join
a neighboring state, that neighboring state’s legislature must approve as well.
Despite numerous state partition or secession attempts both in California and in other states, secession
has occurred only three times in the United States’ history. In 1791, shortly following the ratification of
the U.S. Constitution, the State of Kentucky seceded from the State of Virginia. In 1820, the State of
Maine seceded from the State of Massachusetts. And finally, in 1861, following the outbreak of the Civil
War and the State of Virginia’s secession from the United States, the State of West Virginia voted to
secede from Virginia in order to remain a part of the Union.

Political Steps to Secession

County Approval
While not referenced explicitly by the Admissions Clause, a county’s secession effort would first likely
require some form of approval of a county’s elected leadership and/or voters. Not only is a county’s
elected leadership unlikely to seek secession from the state without its residents’ consent, but the state
would also presumably be far less likely to approve this petition if the County’s voters were not
supportive.
Approval of California Legislature or Voters
Following the approval of a county’s voters (or potentially its elected leaders), a county’s secession
effort would next require the approval of the state Legislature. Though previous secession efforts in
California have sought to use the ballot measure process to bypass a legislative vote, such an effort may
not be allowed by the state’s supreme court.
In advance of the November 2018 election, proponents of “Cal 3” introduced Proposition 9 (Prop 9),
which if enacted by the state and approved by the federal government, would have divided California
into three separate states. Prop 9’s supporters attempted to file the initiative as an “amendment” to the
state’s constitution, which would have allowed the measure to bypass state legislative approval and
appear on the ballot so long as supporters were able to gather enough voter signatures in advance of

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the election. Cal 3’s opponents filed suit, however, arguing that the Prop 9 was not an amendment of
the state constitution, but was rather a “revision,” and would therefore first require approval of two-
thirds of each house of the state Legislature. ii Given the consequences that would follow from the
measure’s possible approval, the Court decided in a July 2018 order that opponents’ argument was
likely to succeed if fully litigated. By this date, however, there was not sufficient time to hold a full trial
on the issue prior to the November election. The court thus ordered that Prop 9 be removed from the
ballot, and proponents of the measure thereafter abandoned the effort.
Cal 3 is not the only recent attempt to partition the state, and its outcome, along with previous
attempts, shows the significant obstacles that secession efforts face. Previously, in 2013, the measure’s
proponent had introduced the “Six Californias” ballot measure, which would have divided California into
six new states. Six Californias also failed to make the November ballot. Additionally, several counties in
northern California have sought together to create the State of Jefferson. As of 2016, 21 counties had
joined the effort, though the state Legislature has never taken up the issue. iii
Arizona’s Or Nevada’s Approval (if Applicable)
If a county seeks only to secede from California to create a new state, only approval from California and
the federal government is necessary. If a county instead attempts to join one of its neighbors—Arizona
or Nevada, for example—those states’ legislatures or voters would also need to first approve this action.
The relative difficulty of this step in the secession process is uncertain, as there is no precedent for it. All
previous state partitions led to the creation of new states; a pre-existing state has never gained new
territory as the result of another state’s partition.
Congressional Approval
Finally, secession requires a simple majority vote of both the U.S. House of Representatives and U.S.
Senate and the approval of the President. In practice, the Senate’s approval of an attempted secession
would likely require a 60-vote “filibuster-proof” supermajority. The recent Democratic-led effort in 2021
to establish statehood for the District of Columbia, for example, passed a party-line vote in the
Democratic-led House of Representatives only to fail in the Senate—despite the Democratic party’s
control of the body—as the Republican party’s opposition provided more than the 40 votes necessary,
under current Senate rules, to use the filibuster to prevent the bill’s passage.

The Fiscal and Economic Impacts of Secession for San Bernardino County
Under any secession scenario, the County’s residents and businesses would be subject to new laws,
regulations, and taxes—either those established by a new independent state or those of a neighboring
state (i.e., Arizona or Nevada). The collective impact of these changes on the County’s governments,
residents, and businesses depends on a wide range of factors. For example, it is possible that in a new
“State of San Bernardino”—or in Arizona or Nevada—regulations in key areas are better (or worse)
suited to driving economic growth, protecting the environment, or reducing the regional homeless
population. Similarly, the state-level agencies in a new or neighboring state may provide higher-quality
services to residents at lower per capita costs. Conversely, it is also possible that, due to its much larger
population, California achieves significant economies of scale in providing services to businesses and
state residents or otherwise manages to provide higher quality services at a lower cost.
A future secession measure would additionally specify how the state’s debts and assets would be
apportioned to the County’s new state following secession. Cal 3, for instance, would have allocated
state debt to each of the three new states in proportion to its population, and each new state would
also have retained any state assets in its territory. iv

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Absent a specific secession measure, however, these social and economic impacts cannot be precisely
determined. Nevertheless, this report assesses the direct fiscal impacts that would likely result.
Specifically, following secession, the County’s residents and businesses would no longer pay California
taxes, but instead the taxes established by a new independent State of San Bernardino or imposed in
Arizona or Nevada. Similarly, the County’s residents would lose access to the services that California’s
state agencies provide directly (e.g., Medi-Cal, the state university system) and gain access to new state
services. The County, its cities, special districts and school districts would no longer receive their share of
the state transfer payments that fund local programs.
Whether the County could effectively maintain the equivalents of these services for its residents and
funding for its local governments largely depends on whether its new state could generate per capita
state tax revenues equal to those generated in California. A state’s fiscal capacity depends on the taxes
imposed (e.g., sales taxes, income taxes, property taxes) and the size of the tax base to which these
taxes apply. A region’s tax base, in turn, is a function of the incomes of its residents and businesses and
the value of its assets. Personal incomes can directly generate tax revenue (as with the individual
income tax) and are also the basis for consumer spending subject to state and local sales taxes. Similarly,
revenue collected through a state corporate income tax will depend on corporations’ business activities
in the state. Finally, in states where property values are higher, more property tax revenue is generated
at any given property tax rate.
Broadly, the economic and fiscal data available for California, Arizona, Nevada, and San Bernardino
County, suggest that California—due to its size and affluence—offers benefits to County residents that
would be difficult to replace post-secession. The state imposes a progressive personal income tax and
relatively high corporation tax. Moreover, the state’s approach to K-12 school district funding results in
larger state transfers to districts where property tax revenues are lower. As a result, the state’s tax code
effectively transfers much of the income and wealth that is concentrated in the state’s very affluent
regions to the state’s middle and lower-income communities.
In the sections that follow, the two secession scenarios discussed—i.e., the creation of a new
independent state and the joining of a neighbor—are assessed separately.
As an Independent State, it is Unlikely that the County Could Maintain the Services that
California Provides
State economic and fiscal data shows that, on a per capita basis, San Bernardino County residents
contribute less to state’s personal income and sales taxes than the average Californian statewide. As a
result, the County benefits from state-supported services that are disproportionately paid for by
residents and businesses in the state’s more affluent areas. v Moreover, because the property tax
revenues generated in the County fall short of the statewide average, the County’s school districts
receive more state aid (per-pupil) for K-12 education than the average district statewide.
The Income and Sales Tax Base in the County and Statewide
As of 2022, as shown in Figure 1 (below), the per capita income statewide was 56% higher than the
average in San Bernardo County. Statewide GDP per capita—an alternative measure of a region’s
available tax base vi—was two-thirds higher than the County’s. The gap between median household
incomes is narrower, as the median statewide income ($91,905) is roughly 19% more than the typical
San Bernardino household income ($77,423. vii

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 Figure 1 – Economic Metrics – San Bernardino vs California (2022) viii
San Bernardino California
Median household income $77,423 $91,905
GDP per capita $55,865 $93,305
Per capita personal income $49,270 $77,036

Data made available by the Franchise Tax Board (FTB), which oversees the collection of the state
personal income tax (PIT), and the state Department of Tax and Fee Administration (CDTFA), which
administers the sales tax, confirm that the County’s residents, on average, incur lower tax burdens than
the average Californian. As shown in Figure 2 (below), consistent with the disparity between the County
and state with respect to per capita GDP and incomes, per capita PIT collections were over three times
higher ($3,279 vs. $1,066) in counties outside San Bernardino County in 2021. This disparity is largely
due the PIT’s highly progressive structure, with rates starting at 1% and topping out at 13% on incomes
over $1 million. As a result, for the 2021 tax year, taxpayers earning over $1 million generated roughly
$62 billion in PIT, or 49% of the total PIT revenue. ix Though the County accounts for 5.5% of the
statewide population, the tax returns from County residents earning over $1 billion accounted for only
1.1% of the $62 billion generated from this cohort statewide.
As to the sales tax, while the data in Figure 2 shows the County generating higher per capita revenues
for the state’s General Fund than the average resident statewide ($990 per San Bernardinan vs. $833 for
residents of other counties), this difference is largely attributable to the growth of online retail, and
does not reflect greater consumer spending in San Bernardino. Under the state’s situs method for
apportioning sales taxes, sales are generally sourced to the seller’s location (and not to where the buyer
receives the purchased item) with the result that online purchases of items warehoused in San
Bernardino County generate sales tax revenue for the County regardless of the purchaser’s county of
residence. As of 2013, according to CDTFA data, San Bernardino ranked 25th among counties in taxable
sales per capita. By 2019, the County’s rank had climbed to 17th, and as of Calendar Year 2022, had
reached 8th. x Were the County to secede, however, California would collect taxes on sales generated by
out-of-county residents and delivered from San Bernardino warehouses. Goods shipped from out-of-
state are subject to the state’s use tax, which is allocated to the county where the good is delivered.
Overall, across both PIT and sales tax revenues, the County generated $2,055 per capita for the state’s
General Fund in the most recent years for which PIT and sales tax data are available. The average
Californian outside the County generated double this amount ($4,112). Together, these two revenue
sources accounted for 74% of total General Fund collections as of the 2022-2023 Fiscal Year. The
remaining General Fund revenue comes from the Corporation Tax (21% of the General Fund) and other
small taxes, such as the alcohol and cigarette taxes (5%). The state does not provide data allocating
these revenue sources to individual counties, though the GDP and personal income data shown above
(see Figure 1) suggest that the County is unlikely to generate higher per capita revenues than the
statewide average in these categories. xi
Figure 2 - State General Fund Per Capita Tax Contributions - San Bernardino vs Other Counties xii
Tax Share of General
San Bernardino Other California
Fund Revenue
Personal Income Tax $1,066 $3,279 56%
Sales Tax $990 $833 18%
Reported Total $2,055 $4,112 74%
Corporation Tax 21%
Not Reported
Other Taxes 5%

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The Property Tax Base in the County and Statewide
In addition to the taxes that contribute directly to the state’s General Fund, differences in property tax
collections across counties indirectly contribute to differences in the state’s support of local K-12
education. As shown below in Figure 3, total assessed value in San Bernardino County is roughly $66,000
lower per capita than in other counties. As a result, property tax revenues generated by County
properties provide less support (per capita) for the County’s school districts.
Under the state’s system for funding public schools, the state ensures that total per pupil funding—i.e.,
including both state and local (property tax) contributions—is roughly equal across local school districts.
The state therefore provides more aid, on a per pupil basis, to districts receiving lower levels of local
support, such as those within San Bernardino County. Local district apportionments data from the state
Department of Education (CDE), summarized in Figure 3, shows that for FY 2022-2023, districts in the
County received 34% more per pupil state aid than the average district in other counties statewide.
Figure 3 – Property values and K-12 school funding – San Bernardino vs Other California (FY 22-23) xiii
San Bernardino Other California
Assessed Value per capita $151,018 $217,347
Local funding per pupil $2,055 $4,710
State funding per pupil $11,333 $8,455
Total funding per pupil $13,388 $13,166

Conclusion – Impact of Establishing a New State of San Bernardino

While a new state of San Bernardino could decide for itself what taxes to impose, the economic and
state fiscal metrics presented above show that if the County enacted a tax system identical to
California’s—i.e., the same taxes imposed at the same tax rates—the revenues generated would be
much lower per person than the current system in California.
Both Arizona and Nevada Generate Less in Per Capita Revenue than California
Were the County to join Arizona or Nevada instead of establishing a new state, the County would of
course not have the ability to set its own state-level taxes. Estimating the fiscal impact of this decision
requires analysis of differences between the California, Arizona, and Nevada economies (and the
corresponding size of the tax base in each state) as well as any differences in the tax systems in place at
the state and local levels.
Figure 4 (below) summarizes findings from the U.S. Census Bureau’s survey of state and local
governments— which tracks the amounts and types of revenues collected—along with the Tax
Foundation’s analysis of the incidence of the state and local taxes in each state. Total state and local tax
collections, as compiled by the Census, represent all revenues received by the state and local
governments in each state as of 2022, regardless of the taxpayer’s state of residence or headquarters.
Since much state and local tax revenue is generated by businesses and persons residing out of state, the
Tax Foundation analysis provides separate estimates of a state residents’ “own-state” state and local tax
burdens—i.e., the share of state and local tax revenues collected that were paid by the state’s own
residents (and not residents of other states). xiv
As shown in Figure 4, California collects much more tax revenue than its neighbors. As a result, the state
is also able to provide more support to its residents and local governments. In Arizona and Nevada, on
the other hand, while the total revenue generated is lower, a higher share of this total derives from out-
of-state persons and businesses. California’s state and local governments collected an estimated xv
$10,491 per Californian in 2022, and the Tax Foundation determined that $8,711 (or 83%) of this
amount was paid by Californians. Arizonans contributed $3,997 (or 77%) of the total $5,217 per capita

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collected, while Nevadans paid $3,932 (or 67%) of the state’s $5,830 total. Broadly, these data suggest
that that the typical Californian’s tax burden would fall if they were to move to Arizona or Nevada.
Figure 4 – Taxes rates and burdens in California, Arizona, and New Mexico (2022) xvi
California Arizona Nevada
Total State + Local Tax Collection $10,491 $5,217 $5,830
(per capita, estimated*)
Own-state* State + Local Tax Burden
$8,711 $3,997 $3,932
(per capita)

Own-state Share of Total Revenues 83.0% 76.6% 67.4%

As discussed above, however, with respect to its residents’ and businesses’ contributions to state tax
revenues, the County is not representative of Californian more broadly. County residents pay
substantially less, on average, in personal income and property taxes than the average Californian.
Therefore, the relative differences in own-state per capita tax burdens shown in Figure 4 do not fully
reflect how San Bernardino County residents’ tax burdens and state transfer payments would change
post-secession.
Cross-state economic comparisons show that in terms of the County’s personal incomes and economic
output, it is more like Arizona and Nevada than California. Figure 5 (below) expands the economic
comparison in Figure 1 (above) to include GDP per capita and personal income per capita data for
Arizona and Nevada. As shown, California’s per capita GDP is 67% higher than San Bernardino County’s,
while per capita GDP in Arizona and Nevada are 15.7% and 25.6% higher, respectively. Similarly,
California’s personal income per capita is higher than the County’s by 56.4%, while Arizona’s and
Nevada’s are 18.6% and 26.0% higher, respectively. In other words, while the data shown in Figure 4
establish that average total tax burdens are higher in California than in Nevada or Arizona, the gap
between the Arizona or Nevada average and the average in San Bernardino is likely much smaller.
Figure 5 – GDP and Personal Income Per Capita – San Bernardino vs. California, Arizona, Nevada
(2022) xvii
San Bernardino California Arizona Nevada
GDP $55,865 $93,305 $64,634 $70,156
% Above County 67.0% 15.7% 25.6%
Personal Income $49,270 $77,036 $58,442 $62,085
% Above County 56.4% 18.6% 26.0%
Just as comparisons of average net tax burdens across states do not account for possible differences
between a region’s per capita tax base and the average statewide (as in Figure 5), these simple
comparisons also do not account for how states may rely to greater or lesser extents on different types
of taxes to generate revenue, and how these differences affect how tax burdens rise or fall in relation to
a resident’s income.
Figure 6 (below) shows, for each of these three states, the average or effective tax rates paid across five
tax types (see left-hand columns, “Tax Rates”) as well as the share of total state and local tax revenue
attributable to each category (right hand column, “Share of Total Revenues”). Effective property tax
rates xviii are higher in California, though this tax type accounts for the largest share of revenue in Arizona
(29.2% versus 27.9% in California and 24.0% in Nevada).

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 Figure 6 –Share of State and Local Revenue by Tax Type – California, Arizona, Nevada (2022) xix
Tax Rates Share of Total Revenues
California Arizona Nevada California Arizona Nevada
Property Tax
0.70% 0.60% 0.56% 27.9% 29.2% 24.0%
(Effective Rate*)
Sales and Gross 8.24% (sales)
8.75% (sales) 8.37% (sales) 21.4% 42.1% 42.1%
Receipts Tax* .05% - 0.33% (GR)
Individual
1.0% - 13.3%* 2.5% 30.5% 15.3% 0.0%
Income Tax
Corporate
8.84% 4.90% 3.6% 1.8% 0.0%
Income Tax

Other Taxes N/A N/A N/A 16.6% 11.7% 33.9%

Combined (state and local) sales tax rates are similar across all three states, though California is far less
reliant on this tax category (i.e., 21.4% of total revenues in California versus about 42% in both Arizona
and Nevada). Conversely, Nevada does not impose a personal or corporate income tax, while Arizona’s
rates are far below California’s. As a result, while these two taxes together account for over 34% of total
state and local revenue in California, they account for just 17.1% in Arizona and provide no revenue for
Nevada. Nevada generates over one-third its revenues from the “Other Taxes” category, which includes
a variety excise taxes (e.g., alcohol, tobacco, and motor fuel) and severance taxes, and fees (e.g., license
fees for motor vehicles or businesses), compared to just 16.6% in California and 11.7% in Arizona. xx
These differences across rates and revenue-shares provide further context to the differences in total tax
burdens summarized in Figure 4 (above). Even though California is a high-tax state relative to Arizona
and Nevada, much of the difference in per capita tax burdens is attributable to its progressive personal
income tax, which generates significant revenue from the state’s highest-income residents, and its high
corporate tax rate (also progressive to the extent corporate shareholders are higher-income, on
average). For middle-income San Bernardinans, therefore, becoming a resident of Arizona or Nevada
would provide only modest savings on household tax bills.
Summary Impact – Joining Arizona or Nevada
Opting to join Arizona or Nevada may offer a fiscal benefit to the County—at least relative to the
County’s option to create its own new state—as the economies in these neighboring states would
provide a larger per capita tax base to fund state services. Still, for two reasons, the extent of state
transfers to residents of the former San Bernardino County likely would fall relative to the status quo.
First, per capita incomes and GDP in California are higher than in Arizona or Nevada. Second, these
states’ tax systems result in far less redistribution from higher-income regions and individuals.

Conclusion
Though secession could generate some benefits for San Bernardino County, a secession faces significant
political challenges, and if accomplished, would likely result in a significant reduction in the level of
government services currently enjoyed by County residents.
Secession first requires California’s consent. The state Legislature has thus far been unwilling to approve
secession proposals, and it is unlikely that the County could bypass the Legislature by submitting this
measure directly to the state’s voters. Potential congressional opposition to the County’s secession is
also a significant obstacle, at least to the extent the end goal was a new state.

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Secession would also result in financial disruptions for the County. Counties in California receive a
significant amount of revenue from the state in the form of transfers and subventions to fund services
including health, mental health, and criminal justice. In addition, school districts and community colleges
in the County receive significant amounts of revenue from the State of California. Secession would
deprive the County of its share of California’s relatively large state budget, which is disproportionately
funded by the state’s wealthiest residents—most of whom live outside the County’s borders. The
creation of a new state would allow the County to set its own tax rates, but even if the County were to
adopt a regime identical to California’s, per capita revenues would fall sharply. In this respect, San
Bernardino County is not unique, as many counties (especially non-coastal counties where residents
earn lower incomes) receive more in state transfers than they contribute in state taxes. If instead the
County were to join neighboring Arizona or Nevada, the state taxes imposed in these states are also
insufficient to replace the County’s current share of state revenue. The result would therefore be
significantly less revenue available to fund state-supported services.

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N OTES

i
Article IV, Section 3, United States Constitution.
ii
See https://verdict.justia.com/2018/04/19/california-voters-focus-voting-tim-drapers-cal-3-initiative
iii
Jonathan Vankin, “State of the State of Jefferson: How this Secessionist Movement Started and Where it Stands
Today,” California Local (March 24, 2023). Available at:
https://californialocal.com/localnews/statewide/ca/article/show/31200-state-of-jefferson-california-north-
counties-sisikiyou-oregon/
iv
“Initiative Analysis: Splitting California into three new U.S. states,” California Legislative Analyst's Office (October
9, 2017). Available at: https://www.lao.ca.gov/BallotAnalysis/Initiative/2017-018.
v
State aid that is transferred directly to the County and other local governments—such as 1991 and 2011
realignment funding—is distributed according to funding formulas set in statute. Additionally, for various large
budget categories—such as Medi-Cal and K-12 education—funding in any region is proportional to the number of
recipients and the level of need. As a result, as shown in Figure 3, for example, lower-income counties statewide
typically receive greater per capita funding than higher-income counties.
vi
Though both GDP and total personal income are broadly measures of the size of an economy, technical
differences in these measures’ definitions will mean that a county’s GDP is not equal to the personal income
received by all its residents and that the difference between the two will itself vary across counties. Largely
because GDP includes corporate income and certain taxes paid, it is typically greater in any region than total
personal income. See “GDP and Personal Income by County,” Bureau of Economic Analysis (May 5, 2023). Available
at: https://apps.bea.gov/scb/issues/2023/05-may/0523-county-gdp.htm.
vii
As of 2022, San Bernardino ranked 29th in per capita GDP out of the 58 counties statewide. While this rank puts
the County in the middle of the distribution, the gap between the County and those ranked at the top end is far
larger than the gap between the County and those with low per capita GDP. Moreover, the 28 counties ranking
above San Bernardino account for a far larger share (75%) of the total statewide population than the 29 counties
ranking below.
viii
Median household incomes are reported as 5-year estimates (2018 – 2022) from the American Community
Survey, United States Census Bureau, accessed March 1, 2024. Accessed at:
https://www.census.gov/quickfacts/fact/table/sanbernardinocountycalifornia,CA/INC110222. Personal income
and GDP per capita are from “CAGDP2 Gross domestic product (GDP) by county and metropolitan area,” Bureau of
Economic Analysis, accessed March 1, 2024. Available at: https://www.bea.gov/data/gdp/gdp-county-metro-and-
other-areas.
ix
“Personal Income Annual Reports,” State of California Franchises Tax Board (FTB) (2019 – 2021 tax years),
accessed March 1, 2024. Available at: https://data.ftb.ca.gov/stories/s/2it8-edzu. This cohort’s share of total PIT
revenue reached a high in 2021, up from 39% in 2019 and 45% in 2020. Data for tax years 2022 and 2023 are not
yet available.
x
“Taxable Sales - By County (Taxable Table 2),” State of California Department of Tax and Fee Administration
CDTFA, accessed March 1, 2024. Available at:
https://www.cdtfa.ca.gov/dataportal/dataset.htm?url=TaxSalesByCounty
xi
Just as the concentration of higher individual earners explains other counties’ greater per capita contributions to
the state PIT, to the extent that corporate income generated in California is more concentrated in counties outside
San Bernardino, these counties would also generate higher per capita Corporation taxes, on average.

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xii
“Personal Income Annual Reports,” FTB (see Note ix); “Net Cash Receipts - General Fund,” CDTFA (see Note x).
xiii
Assessed values are based on “County Assessed Property Values, by Property Class and County (Table 7),”
California State Board of Equalization, accessed March 1, 2024. Available at:
https://www.boe.ca.gov/dataportal/dataset.htm?url=PropTaxAssessedValueCounty. Per pupil funding levels are
from “Statewide LCFF Summary Data,” California Department of Education, accessed March 1, 2024. Available at:
https://www.cde.ca.gov/fg/aa/pa/lcffsumdata.asp.
xiv
For example, sales taxes paid by tourists, or corporate income taxes effectively paid by the corporation’s
shareholders. See “State and Local Tax Burdens, Calendar Year 2022,” Tax Foundation (April 7, 2023). Available at:
https://taxfoundation.org/data/all/state/tax-burden-by-state-2022/#trends.
xv
Blue Sky Consulting Group analysis of Annual Survey of State and Local Government Finances, U.S. Census
Bureau, 1977-2021 (compiled by the Urban Institute). Available at: https://state-local-finance-
data.taxpolicycenter.org. As of the date of this report, the Census Bureau had only published state and local
revenue data as of Calendar Year 2021. For this analysis, 2021 amounts were inflated to reflect estimated 2022
values because the Tax Foundation’s analysis of “own-state” tax burdens are based on 2022 tax burdens (see Note
xvi, which explains how the Tax Foundation’s analysis distinguishes between “own-state” tax burdens and total tax
collections, and why the own-state burden cannot be used to estimate total per capita tax revenues in a given
state). To inflate the 2021 collections, we applied the growth rate in the Tax Foundation’s estimated own-state
state and local tax burden between 2021 and 2022 to the total tax revenue estimate for 2021 published by the
Census Bureau.
xvi
Tax Foundation (see Note xiv); U.S. Census Bureau (see Note xv).
xvii
San Bernardino data from “CAGDP2 Gross domestic product (GDP) by county and metropolitan area,” Bureau of
Economic Analysis (BEA), accessed March 1, 2024. Available at: https://www.bea.gov/data/gdp/gdp-county-metro-
and-other-areas. Data for California, Arizona, and Nevada from “Personal Income by State,” BEA, accessed March
1, 2024. Available at https://www.bea.gov/data/income-saving/personal-income-by-state.
xviii
Property taxes are a function of both the tax rate applied and the assessed value of properties subject to the
tax. Within and across states, assessed values may differ significantly from market values. In California, for
example, the baseline property rate is 1.0% of assessed value, though voters may approve increases to fund local
investments. Since Proposition 13 limits the extent to which a property’s assessed value may increase each year,
the property tax assessment share of a property’s market value is, on average, 0.70%.
xix
“Unpacking the State and Local Tax Toolkit: Sources of State and Local Tax Collections (FY 2020),” Tax
Foundation (August 25, 2022). Available at: https://taxfoundation.org/data/all/state/state-local-tax-collections/.
Notes: California imposes a progressive personal income tax rate that starts at 1% on the first $10,000 of taxable
income and tops out at a 13.3% marginal rate on income earned in excess of $1 million for single-filers. Local sales
tax rate for California set equal to the typical combined rate for most cities in San Bernardino County. While
Nevada does not impose a personal income tax or corporate income tax, the state imposes a gross receipts tax on
businesses that varies from 0.05% - 0.33%, depending on the business’s industry category.
xx
Though the Tax Foundation analysis does not segregate the Other Tax category for each state, Nevada’s high
share in this category may owe to the tax imposed on gambling revenues at casinos in the state, which now
generates over $1 billion annually.

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