For the legislative and political week ending April 23
Welcome to the April 19 edition of the NFIB California Main Street Minute from your NFIB small-business advocacy team in Sacramento.
- NFIB’s Virtual Small Business Day at the Capitol is this week, Wednesday, April 21, from 12:20 p.m. to 1:40 p.m. Special guests include Dee Dee Myers, a senior advisor to Governor Newsom and director of the Governor’s Office of Business and Economic Development (GO-Biz); Assembly Member James Ramos (D-Rancho Cucamonga), author of Assembly Bill 247, the small business liability protection bill that NFIB is co-sponsoring; and Senate Republican Leader Scott Wilk (R-Santa Clarita). Register here, if you haven’t already. For more information, send an email to NFIB Grassroots Manager Taylor Criddle at [email protected].
Quick Legislative Update
- In last week’s Main Street Minute, we reported on the 25 bills NFIB was currently lobbying for or against. One of the measures NFIB was opposing is Assembly Bill 1003, which would add the charge of grand theft to the law on wage theft.
- This week, we are happy to report that, thanks to the lobbying efforts of NFIB California’s chief legislative advocate, Kevin Pedrotti, and others, the Assembly Public Safety Committee has proposed amendments to AB 1003 clarifying that the only conduct that may be punishable by criminal action is intentional conduct done with the intent to defraud employees and knowingly withhold wages from them. That is in line with other criminal wage-related statutes.
- We also noted that NFIB would add to and subtract from the list of 25 as bills it is monitoring when they start to make noise. One such measure is Assembly Bill 1218, “which bans sales of internal combustion engine (ICE) light duty vehicle beginning in 2035 and imposes a de facto ‘feebate’ on sales of CARB-compliant vehicle in the interim,” according to a coalition letter in opposition to AB 1218 that NFIB co-signed.
Money for Nothing or Tomorrow’s Safety Net?
- California has always had an unhealthy need to be the first in the nation on some initiative or another. Keeping with that tradition, Assembly Bill 65 would make the Golden State the first with a Universal Basic Income (UBI) for its citizens.
- According to the text of the legislation, “This bill would require the Franchise Tax Board to administer the California Universal Basic Income (CalUBI) Program, under which a California resident who is 18 years of age or older and who meets specified requirements, would receive a universal basic income of $1,000 per month.”
- Don’t be too quick to think this in a purely left/right, conservative/liberal, or Democrat/Republican issue.
- According to Investopedia, “The idea of providing a basic income to all members of society goes back centuries. The 16th century English philosopher and statesman Thomas More mentions the idea in his best-known work, Utopia. Thomas Paine, a pamphleteer whose ideas helped spur the American Revolution, proposed a tax plan in which revenues would provide a stream of government income ‘to every person, rich or poor.’ …
- “Many of UBI’s supporters come from the more liberal end of the political spectrum, including former Labor Secretary Robert Reich and past head of the influential Service Employees International Union, Andy Stern.?
- “However, support for a government-supplied income stream has been endorsed by a number of prominent figures on the right as well. Among them is the late conservative economist Milton Friedman … In1962’s Capitalism and Freedom … Libertarian philosopher Charles Murray believes that guaranteed income would also cut government bureaucracy.”
UI Tax Increases Ahead
- The CalChamber’s Robert Moutrie reports, “Because California’s [Unemployment Insurance] fund went insolvent in summer 2020, the tax increases will start in 2023, and will continue until the fund is solvent. In California, the wage basis is $7,000 per employee. To put that into practical terms — if the fund is solvent, employers pay 0.6% taxes per employee (or $42 per employee) in payroll taxes, but each year the fund remains insolvent, that rate rises by 0.3% (or $21 per employee). If the fund remains insolvent for enough years that the tax increase maxes out (approximately 18 years), then employers face a per-employee tax of $420 per employee (a 1,000% increase).”
- Are UI tax increases a certainty? The state of California already owes the federal government around $22 billion for the money it has already borrowed to keep its UI Trust Fund from failing to issue unemployment benefits. The American Rescue Plan Act of 2021 gave California $42.6 billion. Granted some of that must be dedicated to certain purposes, but the balance could still wipe out California’s UI debt in one fell swoop. Even a partial payment would go a long way to holding down UI tax increases. Stay tuned.
A week of good news and bad news on the bill front
- First, the good news. On April 15th, NFIB issued a news release following the introduction of the PRACTICAL Act, to increase the flexibility for Paycheck Protection Program (PPP) loan eligibility from a calendar quarter to 90 calendar days. Vice President of Federal Government Relations Kevin Kuhlman said, “By adjusting the eligibility calculation to 90 consecutive days, the bill would allow additional small businesses to be eligible for a second PPP loan. The change is welcome news to small businesses.”
- Now, the bad news. On April 14th, NFIB sent a Key Vote letter in opposition to HR 7, the Paycheck Fairness Act, which will make business-related pay differences difficult to defend in court, invite frivolous lawsuits against small business owners, and prohibit common hiring practices (like asking a prospective employee about their salary history) that help small businesses identify qualified employees. HR 7 passed the House 217 to 210.
- Last week, NFIB hosted a webinar on “Employee Retention Tax Credit Essentials with Jamie Trull.” If you missed it, you can see it here.
- A glimmer of good news was spotted on April 13, when NFIB released its latest Small Business Optimism Index, which rose 2.4 points in March to 98.2. Small-business owners, however, are still struggling to find qualified workers. Read more here.
Next Main Street Minute, April 26.