NFIB California Main Street Minute, January 15-19


From your small-business-advocacy team in Sacramento

Welcome to the January 15-19 edition of the NFIB California Main Street Minute from your small-business-advocacy team in Sacramento. 

Good for Altering Golf Scores and State Budgets 

  • “How do you cut a colossal $68-billion state budget deficit nearly in half? Easy. With a pencil. You simply erase the ‘68’ and write in ‘38.’” — George Skelton, Los Angeles Times, commenting on Gov. Gavin Newsom’s proposed state budget for Fiscal Year 2024-2025, which he released last Wednesday (January 10). 
  • “Newsom’s cheery economic outlook contrasts with how the nonpartisan Legislative Analyst’s Office saw things last month. The office — the Legislature’s own highly respected number cruncher — issued a much more pessimistic forecast. It implied risk of a recession and calculated the budget deficit at $68 billion. 
  • “’We’re just a little more optimistic,’ the governor said in unveiling his budget proposal to reporters. ‘We don‘t see a recession.’” 

Tax Increases? 

  • So, will California balance its books solely by budget cuts and by drawing from the reserve fund?
     
  • Newsom and his staff were emphatic and insistent that a ‘wealth tax’ is going nowhere with them, even admonishing The Wall Street Journal for suggesting he would even consider such a thing. 
  • Increasing the state income tax rate? California already has the highest personal income tax rates in the nation and Newsom has political ambitions for higher office, so it’s a safe bet this is unlikely to happen. 
  • How about extending the sales tax to include services? Hmmm. “It’s the art of the possible,” reports the Times as Newsom saying, and the media love the idea.
     
  • NFIB members don’t, voting 98% in opposition to the idea on their 2019 state member ballot. The California Tax & Budget Research Project, which NFIB is a member of, doesn’t like it either.
  • “When California has faced budget shortfalls, some academics and lawmakers have used the shortfalls as pretext to call for a tax on services, purportedly to fix the budget volatility. In fact, economic research shows that taxing services won’t solve budget volatility – it will just cost consumers, businesses and taxpayers billions of dollars a year in higher costs for housing, infrastructure, and everyday needs like legal help, auto repair, and banking. California has a growing affordability crisis – more taxes are the last thing we need.
  • “Imposing a new sales tax on services will hit businesses and consumers of all types but will fall hardest on small business owners. Unlike corporations, small businesses are not able to bring services like accounting, legal or design in-house to avoid the extra cost of the tax.” 

Please Vote Your State Ballot 

  • NFIB’s California members were sent their state ballots for 2024 late last week. Please take a minute or two to respond to it, which will help your advocacy team in Sacramento prioritize the small business lobbying agenda for the year. This year’s ballot asks four questions, including single-payer health care, reduced workweek, greenhouse gas emissions, and voter approval on taxes. Read them here. 

Calendar 

  • February 5, counties begin mailing ballots to voters. 
  • February 16, deadline to introduce bills in the Legislature 
  • February 20, last day to register for the March Primary Election 
  • March 5, Primary Election Day 
  • May 24 deadline for bills to pass their house of origin (Assembly, Senate) 
  • June 27 deadline for ballot measure to qualify for November 
  • August 31 deadline for bills to have passed Legislature and sent to governor 
  • September 30 deadline for governor to sign bills into law 
  • November 5, General Election Day 

National 

  • We are going to exclude all the other national items this week to draw everyone’s undivided attention to one of the biggest federal regulatory compliance requirements in ages—one that’s in effect now and affects 32 million businesses across the nation. 

Next Main Street Minute January 22, 2024. 

 

 





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