California Leaders Agree to $351B Budget, Software Tax

- California's state budget has ballooned to $351 billion, up from roughly $100 billion a decade ago, driven by persistent deficits and political compromises that avoid major cuts. - The "software tax" refers to a proposal to expand California's sales tax to cover business-to-business software services (like cloud computing, SaaS, and custom software development), which have been largely exempt. This is a major policy shift long resisted by the tech industry. - This matters because California is the world's 5th-largest economy; its tax decisions often influence other states. A software tax could raise costs for startups and tech giants alike. - California faces structural budget deficits — the gap between ongoing spending commitments and recurring revenue. Leaders "agree" to a budget in principle, but details on the software tax scope and rates are contentious. The state has a history of last-minute budget standoffs.