NFIB California Main Street Minute

For the legislative and political week July 19-23

Welcome to the July 19-23 edition of the NFIB California Main Street Minute from your NFIB small-business advocacy team in Sacramento.

Note to Readers

• This edition of the MSM will run a few more minutes because there was a lot of news before the Legislature adjourned Friday for a summer break that will last a month. Lawmakers return August 16. Future Main Street Minutes will be shorter. Promise.

The Big News of Last Week

• Gov. Gavin Newsom signed Assembly Bill 150 into law, which creates an elective tax that pass-through entities (S corporations, LLCs, partnerships) can use to work around the State and Local Tax (SALT) limitations placed on some small-business owners by the 2017 Tax Cuts and Jobs Act. NFIB California led this business coalition effort and issued a news release recognizing the governor for his action.

Special Note to Our Sales Teammates

• For quick reference, the top three Good, Bad, and Ugly bills under each category can be found on this handy, one-page document and on the NFIB California webpage here.

• The Good, Bad, and Ugly selection is drawn from this online story listing all 30 bills NFIB California is fighting for, against, or monitoring.

It’s Back!

• Unfortunately, Assembly Bill 5 will always be with us. This massive rounding up of independent contractors into an employee-classification gulag was never needed, so it’s no surprise it could only be badly designed, as the numerous occupational exceptions it has granted since becoming law attests.

• Now, licensed manicurists would be let out should Assembly Bill 1561 become law—but only for a short time. “This bill would extend the inoperative date of this exemption for licensed manicurists to January 1, 2025.” The bill is now in the Senate after passing the Assembly 75-0.

• For more about NFIB’s last involvement with the AB 5 issue, click here and scroll down to the ‘Happy for Them’ section.

• “Meanwhile,” reports The Sacramento Bee, “AB 5 faces another legal challenge. A Southern California resident recently filed a case in federal court, saying the law burdens political speech, the Ventura County Star reported Sunday.

• “Aaron Starr, an Oxnard resident, told the Star that campaign workers collecting signatures are classified as employees under AB 5, but not those selling household goods door to door. That limits one’s ability to hire campaign workers, Starr told the Star.”

The Federal Moolah Has Arrived

• The $27 billion California was to receive from the federal American Rescue Plan Act has arrived, and the State Treasurer’s Office is giving itself a lot of high-fives for how it’s handling it. “Nothing Short of a Miracle, STO Invests $27 Billion in 7 Days,” boasts the treasurer’s July newsletter.

• “Last month, Investments and CTSMD did something remarkable. In a single day, employees took in a record $27 billion from the federal government’s American Rescue Plan, which funds state and local aid, education, transit, stimulus payments, and other needs. Within seven days, Investments had carefully invested all of it in safe, liquid and interest-bearing securities, including investing $8 billion in one day, nearly a record,” writes State Treasurer Fiona Ma.

• “Receiving it all at once and not knowing when it was going to arrive made it even more challenging,” said Andre Rivera, Director of the Centralized Treasury and Securities Management Division.

• “We’ve never done that much investing on short notice before,” said Kristin Szakaly-Moore, Director of the Investment Division.

State Budget 2.0

• Reports Kevin Pedrotti, NFIB California’s chief legislative advocate:

• “While a skeletal budget outline was approved last month (ensuring constitutional deadline compliance and continuity of legislative salaries) this week the Governor and legislative leaders finally landed on a budget deal. “Budget Bill, Jr”—SB 129— was signed by the Governor on Tuesday and reflects much of the 2021-22 state budget agreement.

• “Bolstered by a stronger than expected economy, an uptick in state revenues and a gusher of federal recovery funds, the budget announced by the Governor includes over $25 billion in reserves, pays off educational deferrals, and continues to pay down long-term retirement debts. It also prioritizes one-time spending over ongoing, allocating 85 percent of discretionary funds to one-time spending. In summary, the budget spends gobs of money.

• “The legislature is off on their 4-week summer recess, returning August 16. Upon return, there will be remaining budget trailer bills, Appropriations Committee deadlines and floor sessions to wrap up the 2021 legislative year.”

NFIB California in the Media

• State Director John Kabateck told iHeartRadio in San Francisco that although the latest SBET showed a slight improvement, small businesses are not out of the woods yet. “The governor and our leaders could really help them with tax relief, fewer regulations, and more liability protection.”

• The Citizens Journal in Ventura County published NFIB California’s news release on the SBET in its entirety.

Federally

• Reports NFIB’s federal lobbying team, “Next week is shaping up to be a consequential week for infrastructure proposals. Yesterday [July 15], Leader Schumer announced next Wednesday, July 21st would be a consequential day for both the Bipartisan Infrastructure Framework ($650 billion physical infrastructure) and the budget resolution/reconciliation package ($3.5 trillion human infrastructure):
  • “Senators will have until Wednesday of next week before the initial vote on cloture on the motion to proceed… And I am setting the same deadline—next Wednesday—for the entire Senate Democratic caucus to agree to move forward on the Budget Resolution with reconciliation instructions.

• “NFIB strongly opposes the $3.5 trillion human infrastructure package as it will contain many tax increases and mandates on small business owners. We will provide additional updates on this dual track process next week.”

• To complement NFIB’s Wednesday webinars, hosts Beth Milito, senior executive counsel of NFIB’s Legal Foundation, and Holly Wade, executive director of NFIB’s Research Center, have started a Facebook Live event every Thursday. Click here to see last Thursday’s Small Biz Coffee Corner, and click here to see last Wednesday’s webinar.

• Last week produced some interesting research out of NFIB: Our 18th COVID-19 poll of the membership and our latest Small Business Economic Trends report (aka the Optimism Index).

Next Main Street Minute July 26.