NFIB California Main Street Minute

Date: May 10, 2021

For the legislative and political week May 10-14

Welcome to the May 10 edition of the NFIB California Main Street Minute from your NFIB small-business advocacy team in Sacramento.

You could have heard a pin drop

  • Last week was a very quiet week in the Legislature. NFIB California’s chief legislative advocate Kevin Pedrotti explains why.
  • “After two solid weeks of frenzy to advance bills from policy committees to the Appropriations Committees, we got a breather this week as we—along with the entire capitol community—wait to learn what bills will be moving forward from the Suspense Files of the respective fiscal committees of each house.
  • “There is demanding work behind the scenes as lobbyists and legislators make their case to the respective chairs and leadership on whether measures will make it past Suspense Day toward the end of the week of May 17.
  • “The list of these final decisions and the Suspense hearing itself are like the Area 51 of the Capitol: we all know it exists but there’s never confirmation. This is the hardest part of waiting.”

NFIB is not being quiet

  • On Friday, NFIB sent out one Action Alert to its membership and one more is planned for this morning.
  • Friday’s Action Alert called on members to add their name to a letter to the governor and state legislators not to waste $1.2 billion on a Capitol renovation boondoggle. You can still add your name here.
  • Today’s Action Alert will ask members to register their opposition to Assembly Bill 995, which would nearly double the requirement to provide paid sick leave from three days per year to five days per year, and to Assembly Bill 1119, which would add new mandates under the Fair Employment and Housing Act (FEHA) that are duplicative of other provisions of California law and will lead to increased litigation.
  • Please look for your Action Alert on these two bills, today, and take action.

State swimming in cash

  • This Friday, May 14, Gov. Gavin Newsom will issue his May budget revise. Reports Pedrotti, “Among the biggest questions: How has the past year of strong revenues reshaped projections for the next few years, and to what extent will the state’s appropriations limit — better known as the Gann Limit — come into play? If the Department of Finance foresees the state pushing past the Gann Limit, expect lawmakers to look for ways to reduce taxes and increase tax credits, especially for low-income residents.”
  • Background: According to one report from the Legislative Analyst’s Office, “In the wake of Proposition 13 (1978)—the landmark initiative that limited local property taxes—voters passed another measure that limited the spending side of government operations. Proposition 4 (1979) amended the State Constitution to impose spending limits—technically, appropriations limits—on the state and most local governments. The limits are sometimes referred to as ‘Gann limits’ in reference to one of the measure’s coauthors, Paul Gann. The fundamental purpose of the limits was to keep inflation and population-adjusted appropriations under the 1978-79 level. The measure required revenues in excess of the limit to be rebated to taxpayers. Gann limit a big factor in budgeting until Proposition 111 (1990).”

“Insulting and demeaning”

  • Michael Hiltzik’s columns in the Los Angeles Times are always worth a read. He source-cites his positions and quotes accurately. He’s a business writer who has a prime piece of real estate in the news section of the paper. But he is a man with an undisguised liberal outlook on things, which means he doesn’t take kindly to having his narrative challenged—which State Director John Kabateck did.
  • Hiltzik has been beating the drum that business groups, such as NFIB, have been propounding a myth that generous unemployment benefits are contributing to employees not returning to work. NFIB’s news release last week commenting on the latest Jobs Report tipped him into a fit of pique, as these four paragraphs from his May 7 story would indicate.
    • “Here’s the insulting and demeaning way that John Kabateck, California state director for the small business lobby group the National Federation of Independent Business, put it:
    • “‘The federal government’s extra $300 it added to state unemployment benefits comes to an end in early September, so it will be a matter of time before showing up for work is a better-paying proposition than remaining on the couch watching reruns of Gilligan’s Island.’
    • “Holly Wade, executive director of NFIB’s national research center, defended the notion that unemployment benefits are keeping workers at home, but she acknowledged that there might be other reasons to decline jobs, including COVID concerns and a lack of childcare while schools remain closed.
    • “NFIB, by the way, has sued to overturn California regulations requiring employers to maintain safe workplaces during the pandemic. That hints at one reason why people might feel uncomfortable about taking jobs with its member companies. The lawsuit is pending in San Francisco state court.”
  • Uncomfortable about taking jobs with our members? Clearly, Hiltzik has never met a single one of the finest groups of employers in the nation.
  • Elsewhere that same day, commenting on the weak jobs data put out by the U.S. Labor Department, Neil Bradley, chief policy officer for the U.S. Chamber of Commerce, said, “The disappointing jobs report makes it clear that paying people not to work is dampening what should be a stronger jobs market. One step policymakers should take now is ending the $300 weekly supplemental unemployment benefit. Based on the Chamber’s analysis, the $300 benefit results in approximately one in four recipients taking home more in unemployment than they earned working.”
  • In case you missed it, NFIB’s latest Jobs Report, released last Thursday, May 6, found another historic high in job openings.

Nationally

  • Ready for your bowl of alphabet soup? This Wednesday, May 12, NFIB will host a webinar on the “Overview and Updates on Federal Small Business COVID-19 Relief, don’t miss out on PPP, ERTC, EIDL, FFCRA, RRF, and more!” Register here.
  • Last week, President Joe Biden proposed significant federal tax changes to finance his infrastructure agenda. Read more here. See attached summaries. His proposals include:
    • Raising the corporate tax rate from 21% to 28%
    • Raising the income tax rate on individuals from 37% to 39.6%
    • Expanding the estate tax’s reach through repealing stepped-up basis
    • Increasing the top capital-gains tax rate to 43.4%

Take Action

Next Main Street Minute, May 17.

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