Bo Tefu | California Black Media
California legislators introduced proposals during the first eight months of the 2025-26 legislative session that could raise annual taxes and fees by more than $14 billion, according to a report from the California Tax Foundation.
The report comes as the state’s 2024-25 general fund revenue exceeded projections by $2.7 billion, giving lawmakers some fiscal breathing room.
The Legislature reconvened last week after summer recess, with a September 12 deadline to send bills to Gov. Gavin Newsom.
Several bills have already failed to advance but remain eligible for consideration in January as two-year bills. Others are still active and must clear committees quickly to reach floor votes.
Some high-impact measures noted in the report include:
● Retroactive emissions liability on fossil-fuel companies (AB 1243 and SB 684), with potential costs in the tens or hundreds of billions of dollars.
● Corporate tax changes tied to executive-to-worker pay ratios (SB 573), originally estimated at $3.5 billion before the levy was removed.
● A digital advertising tax (AB 796) projected at $1.5 billion.
● Income tax surcharge on high earning businesses lacking childcare benefits for employees (AB 1428), estimated at $460 million.
● Regional sales tax hikes in the San Francisco Bay Area (SB 63), San Luis Obispo (SB 333), and Monterey County (AB 761), totaling more than $400 million combined.
● Ticket taxes for major sporting events in Los Angeles and Santa Clara counties (AB 1237), estimated at $75 million.
● Fees on homebuilders (AB 1206), vehicle dealers (SB 791), plastic manufacturers (AB 973), and other industries.
The foundation’s analysis also highlights dozens of smaller measures, including new licensing fees for veterinary assistants (AB 1502), late-night alcohol sales permits (AB 342) and environmental assessments (SB 318), which together add up to millions more.
With the legislative deadline approaching, Democrats are weighing how far to push new revenue proposals while Republicans warn the tax hikes could drive businesses and residents out of California. Measures that stall this fall are expected to return in 2026, ensuring the debate over who pays for the state’s priorities will remain a central fight at the Capitol.
