California Democrats Consider Increasing $16 Billion in Annual Taxes and Fees

The saying, “When you’re in a hole, stop digging” does not seemingly apply to Democrats in the California legislature. Evidently, the solution to the tax-and-spend Democratic supermajority is: “When you’re in a hole, keep digging…and raise taxes.”

A report published by the California Tax Foundation, highlighted by republican state Assemblyman Carl DeMaio (AD-75), reveals that California lawmakers are considering 71 bills that will increase annual taxes and fees by more than $16 billion.

These taxes and fees were introduced as the California Department of Finance reported that California’s general fund revenue for the 2024-25 fiscal year was $2.7 billion (1.3 percent) above the department’s most recent projections.

With the Legislature returning from its month-long summer recess, lawmakers will have until September 12 to send legislation to Governor Gavin Newsom’s desk.

Several bills failed deadlines and died in committees. However, most bills introduced this year may be brought back in January as “two-year bills,” even if they did not advance in 2025.

For other bills currently in committee, lawmakers have just under two weeks from the publication of this report to get their bills to the floor for votes.

Notable measures still under consideration include fees for homebuilders, authorization for initiatives to increase taxes in transportation districts, and authorization for higher sales taxes in the San Francisco, San Mateo, Monterey and San Luis Obispo areas.

Increases in personal, business, and sales taxes are on the table. And, if you want to purchase alcohol late at night to ease the pain of  your ever-increasing tax bill? Think twice, because California Democrats have a tax on that too.

Ronald Reagan, the former republican California Governor and 4oth President of the United States, said it best, “We don’t have a revenue problem, we have a spending problem.”

Just last November, the Globe highlighted California’s spending problem:

Remember when Gov. Gavin Newsom declared that his budget had a $97.5 billion budget surplus? What happened to that?

“Newsom’s Department of Finance, based on one short-term spike in income taxes, projected that revenues from the state’s three largest sources would remain above $200 billion a year indefinitely,” Dan Walters reported. “Newsom then declared that the budget had a $97.5 billion surplus, although that number never appeared in any documents.”

California is reliant on personal and corporate income taxes for more than 75% of the state’s general fund revenues.

But Newsom’s finance department botched the tax revenues projection, which was due to a massive increase in federal aid during Newsom’s pandemic lockdowns, escalating Californians’ personal incomes to more than $3 trillion in 2021, and dropping by about $7 billion in 2022, Walters explained.

“Two years later, buried in its fine print, the deficit-ridden 2024-25 budget acknowledged that sales taxes and personal and corporate income tax revenues would fall well short of the $200 billion a year projection, estimating a $165.1 billion shortfall over four years,” Walters said.

The Legislative Analyst’s Office reports that California’s spending is much too high: (emphasis added)

“…the state faces double‑digit operating deficits in the years to come. By historical standards, spending growth in this year’s outlook is high. Our estimate of annual, total spending growth across the forecast period—from 2025‑26 to 2028‑29—is 5.8 percent compared to an average of 3.5 percent in other recent outlooks. Meanwhile, revenue growth over the outlook window is just above 4 percent—lower than its historical average largely due to policy choices that end during the forecast window. Taken together, we view it as unlikely that revenue growth will be fast enough to catch up to ongoing spending.”

So instead of paying down debt when California had higher revenues, Newsom and Democrats went on a spending spree of longterm social welfare programs, which the state now cannot afford. Therefore, businesses will be paying off the debt – debt which could have been avoided had Newsom and his appointees taken their jobs seriously.

Likewise, the proposed $16 billion in taxes and fees will fuel the continued spending spree that many Californian’s and businesses simply cannot afford. Should these taxes and fees get signed into law by Governor Newsom, moving companies with a one-way ticket out of California will continue to prosper, while remaining Californian’s and businesses get the proverbial shaft.

Editor’s note: We have reached out to Assemblyman DeMaio for comment and will update the article when received.