Spring has arrived in Sacramento, and with it comes the familiar mix of legislative deadlines, budget uncertainty and political maneuvering that defines the capital's most frenetic months. During CalCPA's April 2026 Capital Beat, Vice President of Advocacy and Public Affairs Jason Fox and lobbyist Missy Johnson of Nielsen Merksamer walked members through a landscape that is anything but quiet.

A Legislature Sprinting Toward Deadlines

The 2025–26 legislative session is firmly in its second year, and the pace is accelerating fast. Johnson described the environment as one where coming decisions will carry real weight for new Senate President Pro Tem Monique Limon, who faces her first major test navigating budget shortfalls while managing a Democratic caucus that didn't run for office to cut programs.

The Governor's Race: A Wide-Open Field

Perhaps no topic generated more discussion than the 2026 governor's race—described by CalCPA Vice President of Advocacy and Public Affairs Jason Fox as the most wide-open California has seen in years. The field of Democratic candidates remains crowded, with at least eight contenders heading into California's primary, where the top two vote-getters advance regardless of party.

A major development that significantly reshapes the race, Johnson said, came when former Trump adviser Steve Hilton received the president's endorsement. “I think he pretty much did away with the Republicans' chances of two Republicans making it to the top two primary,” she explained, noting that a unified Republican lane now makes it easier—and more urgent—for Democrats to coalesce around a single candidate.

Fox noted candidate Tom Steyer continued to spend heavily on name recognition and San Jose Mayor Matt Mahan, despite over $100 million in independent expenditure support from tech circles, had not yet seen his polling numbers move meaningfully. Johnson predicted that a clearer Democratic frontrunner likely won't emerge until ballots are mailed.

The Wealth Tax: A Game of Chicken

The proposed 5 percent tax on California billionaires—sponsored by SEIU United Healthcare West—remains one of the most closely watched measures in the state. Proponents have cleared the 25 percent signature-gathering threshold required to move forward but have not yet filed the full batch of signatures. Fox and Johnson both believe that hesitation is deliberate.

There are well-funded counter-initiatives backed by tech billionaires through a group called Building a Better California that are designed to neutralize or undercut the wealth tax are gathering signatures at a reported $15 per signature—an almost unheard-of figure.

Budget Clouds on the Horizon

The state's budget picture remains deceptively calm for now, propped up by strong stock market performance and AI-fueled economic growth. But both Fox and Johnson cautioned that the calm may not last. Legislative budget committees have been spending weeks analyzing the fiscal impact of federal funding cuts tied to H.R. 1, and the real reckoning, they agreed, is likely coming in the 2027–28 budget cycle.

AI Policy, PTET Credits, and the Profession's Future

Beyond politics, Fox highlighted several profession-specific advocacy priorities. CalCPA continues to push for a fix to "stranded credits" under California's Pass-Through Entity Tax program, which faces a five-year expiration that could disrupt taxpayer planning strategies.

On AI, Fox described the profession as well-positioned to play a natural role in third-party assurance of AI systems. "We have a role, we have some insights in this—here's what we need to think about as you look through this," he said referring to the messaging the profession has been sharing with policy leaders.

The California Board of Accountancy, meanwhile, is deep into implementing AB 1175, the landmark CPA licensure modernization bill, with new pathways set to take effect Jan. 1, 2027. The board is also undertaking a broader re-evaluation of the continuing education framework, including whether the current 40-hours-per-year structure remains appropriate.

The Trusted Adviser Remains Essential

Fox closed with a message that resonates especially during tax season: in an era of AI-generated advice and social media tax tips, the value of a trusted CPA has never been more important. "Don't go to ChatGPT or TikTok for your taxes," he said. "Have a year-long relationship with your CPA, not a transactional one-stop shop."

As Sacramento enters its most intense policy stretch of the year, CalCPA's advocacy team will continue to keep watch, be involved and ensure the voice of the profession is heard.

Check out the full Capitol Beat on demand by registering and accessing the event in your Activities. Then mark your calendars for our next installment on June 2. Register now and be a part of the conversation.