For the legislative and political week June 6-10
Welcome to the June 6-10 edition of the NFIB California Main Street Minute from your NFIB small-business-advocacy team in Sacramento.
State Budget and Small Business
- Legislative leaders last week released a state budget summary for the upcoming Fiscal Year 2022-2023. The deadline for passing a budget is June 15. It contained a total of $1.3 billion for small businesses and non-profits:
- $870 million to provide full rebates of the cost of repaying upcoming increases in federal Unemployment Insurance costs for the first 250 employees for every business. Under this proposal, 99% of all businesses will be fully reimbursed for their increased costs. This amount covers the first two years of costs. An additional appropriation will be needed to continue the rebates beginning in 2024 and beyond.
- $250 million for relief grants for small businesses and non-profits with up to 150 employees to offset costs of recently enacted Paid Sick Leave program.
- $100 million for additional COVID Relief Small Business Grants, in addition to ensuring small businesses and non-profits can access existing grant programs.
- $75 million for the California Small Agricultural Business Drought Relief Grant Program at the state Department of Food and Agriculture, to provide direct assistance to eligible agriculture-related businesses that have been affected by severe drought conditions.
Member Action Requested for Thursday CARB Hearing
- The California Air Resources Board (CARB) will hold a June 9 public hearing for a decision it will make in August that will affect the lives of every single Californian. It wants to adopt its Advanced Clean Cars II rulemaking (ACCII), which will hurt families, small businesses, and California’s economy.
- It will limit the kinds of cars consumers can buy, banning the purchase of traditional new cars, hybrids and SUVs. CARB admits that the 2035 ban on traditional gas vehicles does not “reflect a market feasibility study;” which is another way to say that this will hurt struggling families and businesses.
- We need your help to get their attention. Act Now. Act Here.
- The collective business community has deep concerns with ACC II, because it will:
- Reduce personal income in the state by $15 billion
- Increase prices for vehicles by an average of just under $6,000 per car between 2026 and 2035
- Lead to more potholes from the loss of over $15 billion for local road infrastructure
- Cost over 85,000 jobs in California
- Reduce economic output by $22.7 Billion
- Eliminate choice by dictating the type of vehicle you must have without consideration for large families, if they have access to home charging, how many miles they need to drive to get to work, or even if they can afford it.
- You can learn more about the issue at energyideasca.com.
COVID-19 Notice Requirements
- NFIB and its coalition partners kept up the drumbeat of opposition to Assembly Bill 2693, which seeks to extend COVID-19 notice requirements that are no longer appropriate as the state moves into the endemic phase of COVID-19 in 2023.
- In a June 1 letter to the Senate Labor Committee, the coalition noted that “Thankfully, we are in a different world from the one where these notice requirements were put into place. The vast majority of people in California are vaccinated – and those who are not mostly remain that way by choice. Test availability has improved considerably. Case rates are low – despite the economy re-opening and in-person schooling recommencing …To be clear: we do not oppose notification of close contacts. However, workplace-wide notices no longer serve the purposes they did early in the pandemic.”
Workers’ Compensation Claims
- Speaking of keeping up the drumbeat, NFIB and its coalition partners sent this May 31 letter to Assembly Insurance Committee Chairman Tom Daly opposing Senate Bill 1127, which would fundamentally alter longstanding rules and timeframes for determining eligibility for workers’ compensation claims.
- “… as drafted, [SB 1127] would dramatically increase systemic friction and litigation. SB 1127 reduces the timeline for employers to make a decision about covering a claimed injury, but it does not harmonize any of the other statutes and regulations that prevent employers from complying with the new timeline. The bill changes the rules for all claims – including public and private sector employers – but the provisions as they apply to public employers are especially challenging.”
Proprietary Business Information
- Also last Monday (May 31) NFIB and its coalition patterners reiterated their opposition to Senate Bill 1149, “which would prevent businesses from being able to protect proprietary business information, discourage settlement agreements, lead to longer and costlier lawsuits, and chill lawyers’ ability to zealously represent clients.
- “Specifically, SB 1149 would prohibit confidential settlement agreements and protective orders in actions involving an allegation of product defect or environmental hazard and would subject attorneys engaged in these actions to professional discipline for noncompliance. California has repeatedly and rightfully rejected previous proposals to limit confidential protections fairly afforded all litigants in civil actions.”
- The letter of opposition was sent to members of the Assembly Judiciary Committee.
- Thanks for the notoriety. In a Politico story about November ballot initiatives, NFIB was listed as the key player in opposition to a measure calling for increasing the state’s minimum-wage rate to $18 an hour.
- The initiative, bankrolled by wealthy entrepreneur and investor Joe Sanberg, is called the Living Wage Act of 2022, which has until August 8 to collect the 623,312 signatures needed to be placed on the November ballot. The secretary of state’s office reports its 25% there.
Good for Business, Good for Government
- Arguably NFIB’s most important victory so far in the 2021-2022 legislative session was the passage of Assembly Bill 150 that created an elective tax that passthrough entities can use as a workaround of the federal State and Local Tax (SALT) limitation.
- That has been not only good for business but also good for government revenues, as this story in the Wall Street Journal points out. We’re happy to give the governor the entire limelight on this but it needs to be pointed out that the state tax law is also a nice example of bipartisanship.
- “In California, where Democratic Gov. Gavin Newsom pushed the workaround and a subsequent expansion, the change brought in $14.9 billion in gross collections, about 50% more than state officials expected. That is saving Californians billions in federal taxes.”
- Last Thursday (June 2), NFIB released its monthly Jobs Report and to no surprise, nothing much has changed. “The labor shortage continues to be a challenge for small businesses with 51% (seasonally adjusted) of owners reporting job openings they could not fill in the current period, up four points from April and matching the 48-year record high set in September. Twenty-three percent of owners reported labor quality was their top business problem, second to inflation. Twelve percent of owners cited labor costs as their top business problem.”
- Next monthly Small Business Optimism Index June 14.
Next Main Street Minute June 13.