The 2026-27 Budget: How to Use One-Time Revenue Improvements February 20, 2026
Recent stock market performance continues to boost income tax collections. In our Fiscal Outlook, we strongly advised the Legislature to treat near-term strength in tax collections as temporary because we expect these gains to reverse. Further, the state faces significant structural deficits in the future. Accordingly, any windfall received from this revenue uptick represents an opportunity for the Legislature to prepare for future fiscal challenges.
Firearms and Ammunition Revenue Update (2025 Q4) February 18, 2026
For firearm and ammunition excise tax returns filed for the fourth quarter of 2025, the total amount of tax due is $16 million.
California New Car Registrations: December 2025 February 9, 2026
Registrations Fell Slightly in December. Seasonally adjusted new car registrations declined by 1 percent in December. After three weak months, registrations are now 5 percent below the average level over the last couple of years.
California New Car Registrations: November 2025 January 6, 2026
Registrations Dropped in November. Seasonally adjusted new car registrations declined by 4 percent in November. After two weak months, registrations are now 4 percent below the average level over the last couple of years.
2025 Update: Tech Company Stock Pay Accounts for One-Quarter of Withholding Growth So Far in 2025-26 December 3, 2025
California's technology companies, including Apple, Google, Nvidia, Meta, and Broadcom are the most valuable companies in the world and employ thousands of highly-paid workers in the state. Many employees at these companies receive equity pay, such as stock options and restricted stock units, in addition to their base salary. As we first pointed out two years ago, state income tax withholding on stock pay has grown to more than $10 billion annually due to the AI boom in asset prices for these companies. With updated data through 2025Q3, we now believe growing withholding from these sources accounted for a quarter of the strong income tax withholding growth seen in the first three months of 2025-26.
California New Car Registrations: October 2025 December 3, 2025
Registrations Dropped in October. Seasonally adjusted new car registrations declined by 2.4 percent in October. October registrations were 5 percent lower than recent peaks in December and April but slightly higher than the average level over the last couple of years.
Cannabis Tax Revenue Update (2025 Q3) December 2, 2025
The administration currently estimates that retail excise tax revenue was $177 million in the third quarter of calendar year 2025 (July through September). This is the highest quarterly total since the state eliminated the cultivation tax. With this latest data, we currently project cannabis tax revenues of $631 million in 2025-26, nearly $100 million below the budget assumption for 2025-26.
Firearms and Ammunition Revenue Update (2025 Q3) November 18, 2025
Beginning July 2024, Chapter 231 of 2023 (AB 28, Gabriel) imposed an 11 percent excise tax on retail sales of firearms, firearm precursor parts, and ammunition, with some exemptions. Current tax return data suggest that the revenues from this tax will total around $58 million for 2024-25. Further, tax returns filed for the third quarter of 2025 show total tax due of $13 million—slightly below the quarterly average in the first year of the program.
California New Car Registrations: September 2025 November 14, 2025
Registrations Flat in September. Following three straight months of substantial growth, seasonally adjusted new car registrations grew just 0.1 percent in September. This is 3 percent lower than recent peaks in December and April but somewhat higher than the average level over the last couple of years.
California New Car Registrations: August 2025 October 7, 2025
Third Straight Month of Growth. Seasonally-adjusted new car registrations grew 1.6 percent in June, 1 percent in July, and 5 percent in August, but they remain 3 percent lower than recent peaks in December and April. Sales are now somewhat higher than the average level over the last couple of years.
California Labor Market Showing Broad Signs of Weakness September 30, 2025
The state's topline jobs report paints a worrisome picture about the labor market: businesses have shed 20,000 jobs so far this year and more workers report being unemployed. This post brings in new data, including a rise in layoffs and the number of long-term unemployed workers, moderating recent wage growth, and a hiring slowdown in one key growth sector (government jobs), that show broader signs of softness and raise the possibility that the labor market has weakened further in the past few months.
Cannabis Tax Revenue Update (2025 Q2) September 15, 2025
For cannabis excise tax returns filed for the second quarter of 2025, the total amount of tax due is $147 million. With this latest data, we currently project cannabis tax revenues of $603 million in 2024-25 and $773 million in 2025-26.
California New Car Registrations: July 2025 September 9, 2025
Seasonally adjusted new car registrations grew 1.5 percent in June and 1 percent in July but remain 8 percent lower than three months prior. This moderate growth stands in contrast to the substantial volatility we had observed in the prior six months. Sales remained slightly lower than the average level over the last couple of years.
Firearms and Ammunition Revenue Update (2025 Q2) August 18, 2025
Beginning July 2024, Chapter 231 of 2023 (AB 28, Gabriel) imposed an 11 percent excise tax on retail sales of firearms, firearm precursor parts, and ammunition, with some exemptions. For firearm and ammunition excise tax returns filed for 2024-25, the total amount of tax due is $58 million—a bit lower than the budget package revenue assumption.
California New Car Registrations: June 2025 July 29, 2025
Seasonally adjusted new car registrations grew 1.5 percent from May to June. This moderate growth stands in contrast to the substantial volatility we had observed in the prior six months. Due to the sharp decline in May, however, sales remained somewhat lower than the average level over the last couple of years.