California Starts to Assess Revenue Fallout From Trump’s Tax Law

California lawmakers have started examining the effects that the new federal tax and spending law will have on the state, previewing legislative debates to come over whether to conform to the federal changes and how to make up lost revenue.

The law President Donald Trump signed July 4 permanently extended most provisions of his 2017 tax law, increased the limit on deducting state and local tax payments from federal returns to $40,000, and created new tax exemptions for tips and overtime pay. States now face revenue losses depending on whether they conform to the new federal law’s tax features.

“Now ...