Last week, Governor Newsom proposed a $322 billion budget, with no deficit. Then the Los Angeles fires happened.

As part of the state’s response, it is giving all taxpayers in L.A. County until October 15 to file California tax returns on their 2024 income. Quarterly tax payments have also been postponed (for details, check out the latest CalTax Report).

This delay in tax payments could significantly impact California’s notoriously volatile tax revenue, potentially pushing the state budget into the red. Here’s what you need to know…

From Hollywood to Silicon Valley, California was built on dreams. However, in recent years, many found that California has not lived up to its ideal as the Golden State and have left.

But despite the exodus, California recently experienced its first population bump in three years, albeit a very small increase. Yet, there are other signs that California’s dynamism and spirit of dreaming big haven’t disappeared.

The sugar high has officially worn off. For the second straight year, Governor Newsom unveiled a budget that projects a large budget deficit.

For years, Sacramento lawmakers have grown spoiled from the fruits of Silicon Valley’s success which resulted in record high tax revenue. Now, as the economy slows, will California be able to maintain its lofty spending?

As my wife and I recently drove our youngest daughter off to her freshman year of college, I reflected on the milestones that led to this journey. It’s with hindsight that we can distill the key moments that shape the future.

And as we look back on this past year here in California, there are a few pivotal events that I think will prove to be the year’s most consequential for the future of the Golden State.

Is California poised to play the leading role in a technological revolution that will cause the extinction of all living things or usher in a new era of human flourishing?

When it comes to artificial intelligence (AI), there are two strikingly polarized views. On one hand, you have pessimists who warn that AI advancements might spell the end of humanity. On the other hand, you find optimists who compare AI’s potential as transformative to humanity as the printing press or even the discovery of fire.

However, one thing is abundantly clear: AI is on the cusp to igniting another economic boom in California — reshaping industries and driving unparalleled growth.

The American Dream is often defined in part by homeownership — a key component of upward mobility and generational wealth creation.

But here in California, the prospects of achieving this aspect of the American Dream for a generation of young adults and low-income Californians is dimming.

Today, with the median price for an existing single-family home at $859,000, California has the second lowest homeownership rate in the nation.

Earthquakes are a fact of life in the Golden State. In fact, California has more damaging earthquakes than any other state in the nation. And while no one knows when “The Big One” will hit, with 500-plus active faults beneath the surface of California we know with certainty that it is just a matter of time.

However, earthquakes aren’t the only hidden danger that could strike California cities and counties. In the past decade, debt held by California local governments has skyrocketed which has caused many municipalities to be labeled “high risk” according to the State Auditor’s Office.

California has been the epicenter of the ‘hot labor summer.’ Most notably, there are 171,000 striking actors and screenwriters, but in total there have been 55 labor strikes through August involving more than 287,825 participants in the Golden State.

But while summer gives way to fall, California’s labor strikes show no signs of yielding.

And with only two weeks left in the legislative session, lawmakers are fast tracking a bill to give striking workers a financial boost ... albeit while sinking California’s bankrupt Unemployment Insurance (UI) Fund further into the red.

Here’s a brief summary of California’s snowballing UI crisis...

California is experiencing a flood emergency and a drought emergency, at the exact same time. No other fact could better sum up the state of water policy here.

Even so, there may be hope on the horizon, as proposed investments in water storage and conveyance may be gaining critical mass to finally get built. Even in the best case scenario, however, California may be decades away from a stable and reliable water supply system.

Here’s a brief snapshot on this complicated issue...

When California's service-employee unions make the news, they often do so in a spectacular fashion. Recent examples include their push to redefine independent contractors as employees (AB 5) and establishing a 10-member state Fast Food Council with the power to set pay and working conditions (AB 257). AB 5 led to a $200 million ballot initiative campaign, while AB 257 will appear on the 2024 statewide ballot after opponents collected a million signatures to referendum the law.

However, what you don’t often hear about are the labor fights at the local level — and they are just as consequential, yet often fly under the radar.

Let’s talk about why these local labor battles matter…

Is California poised to overtake Germany and become the world’s fourth largest economy? That’s the prediction of a Bloomberg opinion piece that was touted by Governor Newsom before his re-election last November.

While it’s yet to be determined whether we’ll need to update the tagline of this newsletter, we do know that the Midterm election results were a goldmine for local governments in the Golden State.

Here is that story and how it could impact California’s ranking among world economies

In 2020, California Republicans flipped a Congressional seat for the first time in more than two decades. Actually, Republican Congressional candidates picked up a total of four seats despite Biden’s overwhelming 29-point margin over Trump.

Now, with the 2022 Midterm just days away, more than a half dozen competitive Congressional races in California will help determine whether a certain San Franciscan will hand the Speaker’s gavel to a fellow Californian in the Central Valley.

To find out what’s happening in California, I invite you to tune in for our special election night coverage — The Rosscast.

Along with political insider guests, we’ll run down all the races that matter.

Visit TheRosscast.com to register for a reminder and to receive our exclusive election night recap — summarizing all the top races in California.

There is a new trend with California local governments that are seeking to raise tax revenues.

It involves the Documentary Transfer Tax, and it used to be as mundane as the name sounds.

But thanks to several recent state court decisions, a handful of cities are using this property tax to generate billions of dollars.

Here is the story, including Alexander Hamilton’s cameo role …ris.

California’s finances are best described as a roller coaster.

Just this past May, California’s budget surplus soared to $97.5 billion and the governor’s spending plan topped $300 billion.

Now just two months later, the state’s fiscal analyst is warning that tax collections may be as much as $26 billion below projections.

Here is a quick refresher on California’s volatile tax revenue and why it matters …

The stage is set for California’s statewide ballot measure battles. After more than 40 initiatives vied to make the 2022 General Election ballot, only seven remain.

One initiative was placed on the ballot by the legislature, but the others spent as much as $15 million each to collect the required signatures to qualify for the ballot.

Here is a brief breakdown of the seven statewide propositions that will appear on California’s General Election ballot …

There is no doubt that Los Angeles is a progressive city … but could it be the most progressive city in California?

A recent column in the LA Times makes that case and an opinion piece by our friend Matt Klink in the LA Daily News outlines a similar argument that Los Angeles is swinging further to the left.

Here is what’s happening and what it might mean for businesses and public policy …

You can lead a horse to water, but you can’t make it drink. Seems like an appropriate metaphor for California’s Primary Election on Tuesday.

Despite ballots being mailed to approximately 22 million voters, so far, only 3.5 million votes have been counted — putting turnout at a mere 16 percent.

Historically low turnout aside, several big stories are coming out of Tuesday night. Here are a few of the highlights …

Californians are in the midst of voting in the Primary Election.

Our official Election Day isn’t until June 7, but around 22 million mail ballots were sent to voters at the beginning of May and returns are now trickling in. Thus far, just over 1 million ballots have been cast.

In the days leading up to the election, I get hundreds of calls and emails asking, “What are you hearing?” So, this year on election night my brother Jim Ross, a veteran Democratic political consultant, and I will be hosting live election night coverage with special guests to answer the question, “What are you hearing?” Learn more and sign up for an email reminder at www.TheRosscast.com.

Here is a sneak peek of what we’ll be following …

On Friday, Governor Newsom will release the May revision of his proposed $286 billion 2022-23 state budget. Since he first released his proposed spending plan in January, California’s budget surplus has soared to $68 billion.

To put this into perspective, California’s budget has increased more than 100% in just 10 years. With that kind of cash, one would expect California to have top tier infrastructure and services … but it doesn’t.

California suffers from a severe lack of fiscal oversight — and that is just one reason voters could make Lanhee Chen the first Republican elected statewide in 16 years.

Here is what you need to know about Lanhee Chen and his campaign for state controller ...

When was the last time you overpaid for a product or service? Maybe it was a DoorDash lunch, a trip to a mechanic to get your car repaired, or concert tickets. Hopefully it didn’t set you back too much, but whatever it was, overpaying for something can leave you feeling a little bit cheated.

Well here in California, residents pay among the highest taxes, energy prices, and water prices in the nation. We even pay the most for bacon!

So it shouldn’t be too surprising that according to a recent Berkeley IGS survey, 64% of Californians believe their taxes are too high. But there is more to the story.