CA Midterm Election Update

CA Midterm Election Update

Provided by Platinum Advisors

Xavier Becerra will be California's next governor, and Democrats rode a national wave to leads in nearly every competitive California race. The billionaire wealth tax (Prop. 40) is headed for defeat, while Prop. 3's permanent tax on high earners passed. Results reflect counts reported late Tuesday and early Wednesday, and many races are still being tallied.

Top takeaways

1.   Becerra wins easily, and continuity is the default.

AP called the race for Xavier Becerra (D) over Steve Hilton (R) right after polls closed. Expect Newsom-era policy to carry over with a more incremental, less ambitious style. He'll be the first Latino elected governor, and Latinos now lead the governor's office, the Assembly (Speaker Rivas) and the Senate (Pro Tem Limón) at the same time.

2.   Democrats likely hold both supermajorities and may grow them. Democrats led in nearly every battleground legislative race, including against several two-term GOP incumbents. 

3. The wealth tax is losing, but the fight isn't over.

Prop. 40 was failing by double digits after opponents spent $290 million-plus, led by $100 million from Sergey Brin. SEIU-UHW's Dave Regan says he'll go back to the ballot in 2028 unless Becerra and the Legislature deliver a billionaire tax solution. 

4. While voters said no to Prop 40, they still said yes to taxes on high earners and to housing money.

Prop. 3 (permanent high-earner income tax, backed by CTA) passed, as did both housing bonds (Props. 1 and 37). Prop. 1 gives Becerra funding for his 40,000-unit affordable housing pledge. CEQA streamlining (Prop. 45) is trailing.

5. California Democrats gain real power in Washington.

Democrats retook the House and flipped the Senate. Robert Garcia is on track to chair House Oversight ("Lawyer up"), Maxine Waters is likely to chair Financial Services and wants a $1 trillion housing bill, and Pete Aguilar and Alex Padilla gain sway. Expect oversight aimed at tech, AI companies and Trump-aligned donors.

6.   Becerra's first year is already crowded.

Fair share tax recommendations arrive in March, federal Medicaid changes threaten coverage for more than 2 million Californians, and he's promised to "go big" on wildfire liability and to set AI guardrails, all against projected deficits. Details are in the last section.