Welcome to the July 6-10 edition of the Main Street Minute from your small-business-advocacy team in Sacramento.

Please Act on Your Action Alert

A bad piece of legislation is working its way through the State Senate, and NFIB is calling on its members to urge their senators to vote NO on it.

Assembly Bill 2646 would increase the minimum wage for agricultural employees to $19.75 per hour.

Californians rejected an $18 minimum wage in 2024 because it would have been devastating to all residents.

Increasing the minimum wage to $19.75 per hour will lead to the closure of small businesses, widespread job loss and job automation, income reductions, and price increases for all Californians.
A $19.75 minimum wage that increases annually will only make California more unaffordable.

At the push of a button, NFIB makes it easy to tell your senator you cannot afford a $19.75 minimum wage and Assembly Bill 2646. Take action here.

The Legislature

Lawmakers started their summer recess last Thursday, July 2, and will be gone for a month, returning for business on Monday, August 3.

They will have less than a month to finish their business before the scheduled August 31 adjournment date for the 2025-2026 session.

Among the priorities for NFIB will be defeating Assembly Bill 2646 (see section above), Assembly Bill 2021, creating a paid informant system for alleged violations of workplace regulations, and Assembly Bill 1421, exploring establishing a mileage-based fuel charge.

Another bill NFIB is vigorously opposing is Assembly Bill 649, which originally started out with the well-meaning intent of establishing a small business right-to-cure period but was subsequently amended to “create too much risk and uncertainty for California’s smallest businesses and potentially create more challenges and liability for them under the ADA, Unruh Civil Rights Act, and the Unfair Competition Law,” according to NFIB and its coalition partners’ letter of opposition.

On the other side of the ledger, NFIB will push for passage of Senate Bill 690, dealing with the processing of personal information. A letter of support from a coalition NFIB is part of can be read here.

November Ballot Initiatives Assigned Numbers

Last Monday (June 29), Secretary of State Shirley Weber assignment numbers for the 14 initiatives that will appear on this November’s General Election ballot.

“The 14 measures that will appear on the Nov. 3 ballot were going to be as many as 20 before last-minute compromises settled three dueling measure conflicts,” reports veteran Capitol observer Dan Walters in CalMaters. “One pitted personal injury lawyers against rideshare companies, a second involved hospital executives and a health care union, and the third dealt with vote minimums for local taxes.

“… However, the most prominent ballot measure conflict — over whether California should impose a 5% wealth tax on billionaires — defied resolution. The measure, sponsored by the SEIU healthcare workers union, will be Proposition 40 and will compete with two countermeasures sponsored by billionaire Sergey Brin and other Prop. 40 foes, Proposition 41 and Proposition 42.

“They could, if passed with higher vote counts, kneecap the wealth tax.”

New State Budget Now in Effect

State lawmakers met their constitutional obligation to pass a state budget for the 2026-2027 Fiscal Year by June 15, but two weeks remained for them to fine tune it by July 1.

Last Monday (June 29), the fine tuning ended in a $351.7 billion spending plan that didn’t sound so sweet to the ears of small business owners. As reported by The Sacramento Bee, “The budget also raises a tax on commercial health plans, part of a suite of revenue-raising measures lawmakers and the governor agreed upon to balance the budget. Opponents of the health insurance tax increase, including the companies that administer those commercial plans, estimate it could increase the cost of families’ monthly insurance premiums by around $400 a year.”

Are big troubles around the corner?

“The nonpartisan Legislative Analyst’s Office has warned lawmakers that California is increasingly vulnerable to the next economic downturn as its commitments to social programs balloon,” reported CalMatters’ Lynn La. “In May, the office said California’s revenue outlook ‘rests disproportionately on AI-driven equity valuations’ and that the state is ‘ill-prepared for even a slip up in revenues,’ given its spending, diminished reserves and debt.

“Translation? Because so much of California’s revenues come from the top 1% of income earners, a dip in the stock market could mean massive drops in available state funding for all its increased fiscal promises.”

Health Insurance Premiums to Rise
… If the Feds Agree

“New federal rules are forcing the state to restructure its managed care organization tax, or MCO tax, which the state collects from health insurance plans that coordinate care for their members. California has been charging Medi-Cal insurance plans at a higher rate than private plans. The state’s newly designed solution, Senate Bill 125, will lower the tax on Medi-Cal plans and raise the tax on private plans to the same level. If finalized by the governor, and accepted by the federal government, the new plan would shift more of the cost burden onto people who buy private insurance but bring in less revenue overall,” reports CalMatters.

“The Department of Finance said it tried to balance affordability for privately insured patients with generating enough revenue to keep the safety net afloat amid federal funding cuts. The department settled on the $8.85-a-month assessment because that rate would generate $2.3 billion a year — roughly the amount that the state generated before 2023 to support Medi-Cal, said H.D. Palmer, a spokesperson for the Department of Finance.”

NFIB is opposed to increasing the MCO tax.

Speaking of the Feds

“The National Oceanic and Atmospheric Administration announced it will perform a thorough evaluation of the state’s coastal management practices, including how watchdogs have addressed — ‘or failed to address … spaceport infrastructure, offshore oil production, pipeline maintenance, desalination projects, undersea cables, and other key priorities of national importance.’

“’Obstructionist policies that delay critical national infrastructure in the name of environmental extremism are unacceptable,’” said U.S. Commerce Secretary Howard Lutnick in this, slightly slanted, story from KQED in San Francisco.

“NOAA will hold an in-person meeting and two virtual public hearings on the topic in August and will accept comments through Aug. 22.”

NFIB members are past masters at dealing with regulatory agencies, state and federal, and the views they have are not the most commendatory. But hope remains alive. When asked on this year’s state member ballot, ‘Should California further reform the California Environmental Quality Act (CEQA) to make it easier to rebuild residential properties, particularly in communities recovering from natural disasters?’, a resounding 92% said ‘Yes.’ Fat chance of that happening. But with a little federal prodding, who knows?

Not All News from San Francisco is About AI Innovation

“Founder of Real SF Startup Is Cutting Up Banned Target Bags and Calling Them Dog Raincoats. They’re $2,” reports Hoodline.

“San Francisco has always had a knack for turning its own municipal neuroses into folk art, and a recent Facebook Marketplace listing from a local seller named Chris Fayemi may be the city’s most inspired, possibly joke, product launch in recent memory: custom dog raincoats, made to order, crafted entirely from repurposed plastic shopping bags. The post has accumulated over 200 likes and counting, which, for a Facebook Marketplace listing, is basically going viral.”

Calendar

— 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.

— November 3: Election Day

National

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

— NFIB sent a press release expressing disappointment in the missed opportunity to exempt American small businesses from the BOI reporting mandate through an amendment to the National Defense Authorization Act.

— Reuters, CNBC, MSN, and others quoted SBLC Vice President & Executive Director Beth Milito from her testimony in opposition to proposed tax increases to fix anticipated Social Security fund deficits: “The bill is ‘not simply a tax increase on wealthy individuals but on the revenue a small business owner needs to operate, grow, and expand.”

— 250 years later, it’s easy to forget that many of our founding fathers were essentially small business owners. Benjamin Franklin ran a successful printing press. George Washington operated a large commercial gristmill at Mount Vernon. John Hancock was a prominent merchant. Thomas Jefferson managed extensive agricultural operations. It’s likely that many would have been NFIB members themselves, if we were around back then!

Next Main Street Minute: July 6. All Main Street Minutes can be found on the NFIB website here. Pull down the California tab in the upper-right-hand corner or go right to it here.