Happy Thanksgiving. Welcome to the November 24-28 edition of the Main Street Minute from your small-business-advocacy team in Sacramento.

NFIB Special Presentation Now Online

NFIB California thanks members who were able to make our special November 18 presentation, Legislative Session Recap and Legal Update. We also thank our guests, Beth Milito, executive director of NFIB’s Small Business Legal Center, and Tim Taylor, NFIB California’s legislative and policy director, for providing small business owners with an informed way to start the New Year. For those who couldn’t make it, the virtual event is now available online.

Small Business Saturday

This coming Saturday, November 29, is Small Business Saturday. Should you like to be on a list of small business owners the media can call for comment, send your name, location, and contact information to NFIB Senior Media Manager Tony Malandra, anthony.malandra@nfib.org, or to Grassroots Manager Matthew Woolley, matthew.woolley@nfib.org.

State’s Fiscal Outlook Released

It’s not good, but who was expecting otherwise? Last Wednesday (November 19), the Legislative Analyst’s Office released its annual California’s Fiscal Outlook report, this one for the 2026-2027 state budget. (The following bolding added by the Main Street Minute)

“Under our revenue and spending estimates, the Legislature faces an almost $18 billion budget problem in 2026‑27. This is about $5 billion larger than the budget problem anticipated by the administration in June, despite improvements in revenue. This is because constitutional spending requirements under Proposition 98 (1988) and Proposition 2 (2014) almost entirely offset revenue gains. Moreover, we estimate costs in other programs to be about $6 billion higher than anticipated. Starting in 2027‑28, we estimate structural deficits to grow to about $35 billion annually due to spending growth continuing to outstrip revenue growth.

“We advise the Legislature to address the budget problem through a combination of ongoing solutions—namely, achievable spending reductions and/or revenue increases. … If our estimates hold, the Legislature will face a fourth consecutive year of budget problems—all during a period of overall revenue growth.”

So, there you have it, revenue isn’t the problem, spending is. The main culprits?

“This is because of the requirements of Proposition 98 (1988), which governs school and community college funding, and Proposition 2 (2014), which specifies reserve deposits and debt payments … Together, due to higher revenue estimates, these requirements increase by over $10 billion—representing nearly all of the revenue gain,” reports the LAO.

So, what to do? Tax the rich more?

That’s the goal of backers of the “2026 Billionaire Tax Act,” whose measure is awaiting official language from the attorney general. It would slap a “one-time” 5% tax on a billionaire’s wealth, not just income.

But wait. Don’t wealthier Californians, the ones remaining, already pay more than their share? According to the California Center for Jobs & The Economy, “taxpayers with an adjusted gross income (AGI) of $1 million or more (0.9% of all taxpayers) paid 49.2% of all personal income tax (PIT), equivalent to 27.7% of all general fund revenues.”

How about taxing everyone more?

It’s back! The buzz in the Capitol is growing to extend the state sales tax to include services, an issue NFIB members have opposed many times.

Stay tuned.

Housing Update

“Building affordable housing on the California coast should get a bit easier after the California Coastal Commission voted earlier this month to extend the time frame for projects to be built — a decision that underscores a pro-housing shift among the little-known but consequential government body,” reports CalMatters.

“… Many housing advocates and Democrats say the state agency blocks affordable housing development in California’s coastal regions. This year, Gov. Gavin Newsom, a critic of the commission’s broad powers, and Assembly Speaker Robert Rivas, a Salinas Democrat, appointed three pro-development local officials to the agency.

“The agency also this year worked with housing activists to boost student housing in coastal cities, and did not oppose a housing reform law that excludes most new developments from environmental review.”

At 16%, NFIB members in the construction industry are NFIB’s third biggest group, just behind services (23%) and agriculture (17%). Reforming the Coastal Commission has long been a goal of NFIB’s in the Legislature and in the courts.

Five years ago, in the case of Lent v. California Coastal Commission, the NFIB Small Business Legal Center filed two amicus briefs arguing that a California statute allowing an administrative agency to impose substantial fines and perform hearings without basic fairness procedures violates constitutional due process.

This year, we are happy to report that a handful of pro-small-business bills which NFIB and its coalition partners lobbied for were signed into law, dealing with the California Environmental Quality Act (CEQA) and other streamlining reforms (AB 609, AB 671, SB 607) and water (SB 72). CEQA is closely related to the actions taken by the Coastal Commission.

At least on one issue, Sacramento, finally, seems to be getting the message: housing is good.

Calendar

— November 29: Small Business Saturday

— January 5, 2026: Legislature reconvenes

National

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

— NFIB sent a Statement for the Record to the Senate Finance Committee in advance of their hearing on rising health costs. The letter highlighted the impact high health premium costs have had on small businesses.

— NFIB sent a statement following the EPA and Department of the Army’s announcement of a new proposed rule governing “waters of the United States.” NFIB President Brad Close said, “NFIB appreciates that the proposed rule… fosters economic prosperity for small businesses by providing WOTUS clarity and predictability, and appropriately balances state versus federal government authority.”

— NFIB sent a press release highlighting the Small Business Legal Center’s 25th anniversary. NFIB President Brad Close said, “Over these 25 years, the Legal Center has provided individualized support to entrepreneurs, strengthened NFIB’s advocacy efforts through legislative and regulatory analysis, and stood up for important small business issues in courts across the country and in the U.S. Supreme Court.”

Next Main Street Minute: December 1. All Main Streets Minutes can be found on the NFIB website here. Pull down the California tab in the upper-right-hand corner.