Sacramento, California – As California’s economy reels from a turbulent stock market and the threat of sweeping tariffs, state lawmakers are grappling with what Assembly Speaker Robert Rivas (D-Hollister) called “the most challenging of years” for crafting a state budget.
In a stark warning from the Capitol last week, Rivas predicted President Trump’s aggressive trade policies would “squeeze our economy at every level.” Days later, Trump unexpectedly paused most new tariffs, triggering a brief market rally — but the volatility only deepened the uncertainty facing California’s budget writers.
With tax revenues tied heavily to capital gains and high-income earners — particularly in the tech sector — California is uniquely exposed to stock market shocks. The so-called “Magnificent Seven” tech stocks, including Apple and Nvidia, are major drivers of state income. A sharp decline could wipe out billions in expected revenue…