Here We Go: New-look Legislature Hits Ground Running.

• Author: Fox, Jason

This month a newly elected Legislature will be sworn in for the 2023-24 legislative session. The new legislative class will be significantly different than it has been in the past. Due to redisricting, term limits and pursuit of other opportunities, nearly one-third of the members will be new to the legislative process. For CalCPA, this means we will have our work cut out to connect with new legislators and their staff to introduce them to CalCPA, the CPA profession and the issues of importance that we are working on.

And right off the bat, the Legislature is expected to tackle a special session called by the governor to discuss rising fuel costs and other inflationary pressures that are facing Californians.

The governor has indicated that he will outline a plan to provide relief to taxpayers that may be partially funded by a new tax on the oil industry, which he argues has profited on disproportionately high fuel prices in California. For new legislators, this could mean tough votes right out of the gate. For those on the outside watching, this could be an important barometer ol where the Legislature is on key issues.

To challenge things further, last month the nonpartisan Legislative Analysts Office (LAO) gave a warning that it expects the state to face a $25 billion budget shortfall. Complicated by a coming economic recession, inflationary pressures and a volatile revenue structure that is heavily reliant on high-income earners, the state is expected to see a significant dip in revenues.

The LAO recommended that policy leaders will likely need to re-evaluate budget allocations and consider strategic reduction in funding for certain programs.

Newly elected legislators will be tasked with navigating this budget crunch, something their predecessors had not needed to do during years of significant surplus.

CalCPA will be closely watching how they respond to these tough decisions, particularly if the conversation of taxes (like a services tax) re-emerges. CalCPA has been a vocal leader in educating policy leaders about the challenges of a services tax. Early advocacy and communication will be key to stay ahead of any proposals.

Even before the election was finalized, the Legislature signaled that it would have a new leader in the Assembly. Speaker Rendon will step down in June and pass the Speakership to Assemblymember Robert Rivas. While the politics are similar between the two, the change is likely to have an impact on how the lower house...