Welcome to the January 12-16 edition of the Main Street Minute from your small-business-advocacy team in Sacramento.

2026-2027 State Budget Unveiled

Gov. Gavin Newsom gave his final state-of-the-state speech last Thursday (January 8) and the next day, his finance director, Joe Stephenshaw, presented the governor’s $348 billion spending plan for Fiscal Year 2026-2027.

The plan has a $2.9 billion hole in it, “a far cry from the $18 billion shortfall that the Legislative Analyst’s Office projected in November,” reported The Sacramento Bee.

A new state budget, after the Legislature tinkers with it, will take effect on July 1. Lawmakers have until June 15 to pass it.

There’s nothing in the proposed budget about NFIB’s No. 1 priority, which is paying down — or off — the state’s UI loans of around $22 billion, but it does call for — because it legally has to — using General Fund money to pay this year’s $662.2 million in interest on the UI loan (See Page 5 here).

Because we have been beating the drums loudest and longest, NFIB would have been the first group to know if the governor was going to tackle the issue, so we’re not surprised by its absence in his proposed spending plan. That’s why we’ve been quietly laying the groundwork for legislative remedy.

Note: the budget deficit mentioned above does not include the $22 billion UI money owed Uncle Sam. Were California to become its own nation, our currency would be the IOU.

Small Business Loses a Good Friend

“The passing of Congressman Doug LaMalfa is heart-breaking,” said NFIB State Director John Kabateck in a news release sent last Tuesday (January 6). “California small businesses have lost a proven champion of Main Street enterprises. He was an NFIB member for 43 years and his expertise on agricultural and water issues will not easily be replaced.”

Sacramento Bee editorialist Tom Philp wrote, “There was, and has been, no mistaking LaMalfa as a true representative of the Sacramento Valley. He has been a constant of the valley’s universe ever since, until his sudden passing on Monday at the age of 65. And now, a massive political void has opened wide.

“Having representatives in Washington with a passion for agriculture and water, a complex subject in which most Californians in Congress are utterly illiterate, is crucial to advancing this state. LaMalfa lived these issues because it was in his genes.”

Media publishing Kabateck’s comment included The Business Journal.

New NFIB California Leadership Council Heads Named

In a news release sent last Wednesday (January 7), NFIB California announced its new Leadership Council chair and vice-chair. The release also thanked its current PAC chair for remaining in that position for this election year.

“I’m very excited Beth Booth and Jeff Pardini have agreed to lead NFIB California,” said State Director John Kabateck in the news release. “Now that politics and public policy have become ceaseless, every day, every year endeavors, both have the energy and experience to meet the constant challenges thrown at small business survival. I’m also very grateful Paul Cramer has agreed to stay on as chairman of our PAC in this crucial election year. Finally, I want to commend the stellar job our outgoing Leadership Council Chairman Max Ordonez did in leveraging his extensive public policy experience to open a few more doors for the small business message to be heard by policymakers.”

The Capitol Morning Report and Golden State Today were two of the state’s media covering the news

Speaking of Media Coverage …

… Golden State Today was also one of the media publishing Kabateck’s comment from our news release, NFIB Urges California Supreme Court to Define and Limit PAGA Actions.

Curious About This Year’s Ballot Initiatives?

From Tom Ross and Tino Rossi of Swing Strategies:

“A flurry of initiatives were filed in late 2025, and the race to collect enough valid signatures is well underway. Campaigns must gather 546,651 signatures for a statutory initiative and 874,641 for a constitutional initiative.

“Five measures have already surpassed the 25 percent mark in signature collection, with the Local Taxpayer Protection Act to Save Prop. 13 facing the earliest deadline on February 25. Another ten-plus initiatives, however, are in a sprint to meet the April 17 deadline to submit signatures and qualify for the November ballot.

“But what about the June ballot? Only legislatively referred measures are eligible, and the deadline for lawmakers to place items on that ballot is January 22.

“Tom Ross and Tino Rossi will discuss these developments and more during a Ballot Initiative Update on Monday, January 27, at 11:00 a.m. Register Today.”

State Agency Actions of Note

From Nielsen Merksamer

January 9, CalRecycle announced that it withdrew its proposed regulations to implement the Plastic Pollution Prevention and Packaging Producer Responsibility Act (SB 54) from the Office of Administrative Law’s review to make changes to the regulations to improve clarity and support successful implementation of the law. CalRecycle’s focus for these revisions will primarily be applicable to food and agricultural commodities. CalRecycle will conduct an additional 15-day comment period. Statutory deadlines remain unchanged.

Natural Resources Agency: Preventing New Oil Drilling on California’s Coast Meeting – January 15, 12:00 p.m. (virtual). The Secretary and several other state officials will discuss recent federal agency actions affecting California’s coastlines. You must register to attend.

Calendar

— March 26-April 6: Legislature on Spring Break

— May 29: Last day for bills to pass their house of origin

— June 15: Deadline (by midnight) to pass new state budget

— June 2: Primary Election for eight state constitutional offices, four Board of Equalization seats, all 52 congressional seats, all 80 assembly seats, and 20 (even-numbered districts) state senate seats. Governor’s proclamation here.

— July 2-August 3: Legislature on Summer Recess

— August 31: Legislature adjourns its 2026 session

— September 30: Last day for governor to sign or veto bills sent to him.

National

Highlights from Federal Government Relations Principal Louis Bertolotti’s weekly report

— NFIB released its Small Business Legislative Priorities for 2026.

— NFIB sent a press release highlighting the testimony for the record submitted to the U.S. House Committee on Small Business ahead of its hearing entitled, “A Voice for Small Business: How the SBA Office of Advocacy is Cutting Red Tape.”

— NFIB released the December 2025 jobs Report. The report found that 33% (seasonally adjusted) of small business owners reported job openings they could not fill in December, unchanged from November.

Next Main Street Minute: January 19. All Main Streets Minutes can be found on the NFIB website here. Pull down the California tab in the upper-right-hand corner.