NFIB California Main Street Minute

Date: November 22, 2021

For the legislative and political week November 22-26

Happy Thanksgiving week to all NFIB members. Thank you for making our association the most highly respected and trusted in the nation. And thank you to NFIB California’s leadership council, our valiant sales team, and our great staff in Sacramento and in Washington D.C.

Welcome to the November 22-26 edition of the NFIB California Main Street Minute from your NFIB small-business-advocacy team in Sacramento.

Cal/OSHA Vaccine Mandate

  • At a Thursday (November 18) meeting, Cal/OSHA decided against requiring companies with 100 or more employees to be vaccinated or submit to weekly testing.

  • “The board decided to wait to see how the legal battle over the proposed federal mandate plays out,” reported The Sacramento Bee. “The Fifth Circuit Court of Appeals on Nov. 12 stayed the federal mandate, with some experts predicting it will ultimately be reviewed by the U.S. Supreme Court … Because California has its own occupational safety and health department, it could have had its own mandate regardless of the court’s ruling, as long as it was as strict as or stricter than the federal regulation.”

  • To add to last week’s Main Street Minute on the subject, Cal/OSHA’s current COVID-19 Emergency Temporary Standards are expected to be readopted, with some modifications, for a second time in December. If approved they would be in effect from January 14, 2022, to April 14, 2022.

  • A coalition of 50 business associations, including NFIB, sent this four-page letter on November 8 to the acting chief of Cal OSHA detailing five concerns it has with the second readoption.

  • The Cal/OSHA Standards Board is now working on making those temporary standards permanent, which could come up for a potential vote at the Board’s March 2022 meeting.

New NFIB California Podcast

  • The latest in a series of NFIB California podcasts is now ready for listening—and the subject couldn’t be timelier. If you’re looking to renegotiate your lease or negotiate a new one, STOP! until you hear special guest Ken Noack, senior managing director for Newmark Commercial Real Estate, and one of the state’s most respected land and retail specialists, offer his Tips for Small Business Lease Negotiations.

Meeting with Key Assembly Leader

  • On Tuesday, November 16, State Director John Kabateck and NFIB’s chief legislative advocate, Kevin Pedrotti, met with the top aides for Orange County Assemblymember Cottie Petrie-Norris at the assemblymember’s invitation to get to know more about NFIB’s legislative agenda.

  • Kabateck spoke at an October 6 small-business roundtable event in Costa Mesa organized by Petrie-Norris, where she asked him afterward for a future meeting to get to know NFIB better. Cottie-Norris is chair of the Assembly Small Business and Entrepreneurship Select Committee.

Good News on the State Budget

  • According to the Legislative Analyst’s Office, there will be an estimated windfall of $26 billion in tax revenue for the 2021?22 budget, which began July 1. And for the next budget year, 2022-2023? “Despite the ongoing global pandemic and its disparate health and economic impacts on Californians, revenues are growing at historic rates and the state likely will have another significant surplus (resources in excess of current law commitments) … under our revenue estimates the state would have a surplus of $31 billion to allocate in the upcoming budget process,” the LAO announced Wednesday, November 17.

A Swing Around the Data Dance Floor

  • Pew Research reports, “After South Dakota’s 6.1% annualized rate, the fastest growth in total personal income since the pandemic was in California (5.9%), Idaho (5.6%), Washington (5.4%), Nebraska (5.3%), Arizona and North Dakota (both 5.2%), and Georgia (5%).”

  • In the same report, it noted, “A comparison of estimated inflation-adjusted state personal income in the second quarter of 2021 with the second quarter of 2020, a period marked by a sharp decline in government assistance, shows California was the only state to record personal income growth (0.2%).”

  • It was a busy last week for Pew, in another story, There Are More Jobs Than Jobless People in 42 States, it reported, There are just eight states with more unemployed workers than job openings: Hawaii, followed by California, Connecticut, New York, Illinois, New Mexico, New Jersey and Nevada.

  • The research firm Morning Consult released its monthly consumer spending report Thursday, November 18. “Supply chain disruption persists across multiple categories, potentially driving more spending toward services rather than goods. Categories experiencing the most acute shortages, such as groceries, housing and cars, had some of the most pronounced reductions in spending last month.” The report tracks six categories of spending: housing, groceries and restaurants, cars and gas, health care, apparel and personal care, and alcohol.

  • “Almost 4 in 10 U.S. consumers say they will do the majority of their holiday shopping online: Another 36% plan to evenly split their holiday shopping between stores and online. Only 1 in 4 consumers will do the majority of their holiday shopping in stores,” according to the report.
  • Meanwhile, Canada’s Fraser Institute released its Economic Freedom of North America 2021 report last Tuesday, November 16. Unlike similar annual reports from ALEC, CNBC, and others, Fraser has two rankings: one showing California’s place in comparison to other states (subnational), and another (all government index) showing California’s place when 10 Canadian provinces and 32 Mexican states are thrown into the mix.

  • Not so good is California’s ranking against other states. It came into second-to-last at 49th place. New York came in last. But when the rest of North America was thrown in, California came in 43rd out of 92. Only the Canadian province of Alberta beat out some U.S. states.

  • Truth in Accounting released its Financial Transparency Score 2021 ranking of the states. “While there is a great deal of focus on state budgets, the results of those budgets are found in a government’s annual comprehensive financial report. This document is produced annually by governments and is audited by certified public accountants.” California is not the worst. Colorado is with a Total Transparency Score of 46. Utah has the best score at 88 and the Golden State comes in for a 72 ranking.

NFIB California in the Media

From NFIB’s D.C. Office

  • The U.S. House on Friday (November 19) passed the Build Back Better Act (H.R. 5376) with only seven votes to spare, 220-213.

  • “By passing the Build Back Better Act, the U.S. House has proposed saddling small businesses with significant tax increases, inflexible mandates, and unaffordable penalties,” said Kevin Kuhlman, NFIB Vice President of Federal Government Relations, in a news release. “Small businesses are facing numerous challenges right now, including the inflation tax, supply chain disruptions, worker shortages, and COVID-19 variants and restrictions. These additional burdens will severely hurt small businesses across the country, threaten the small business recovery, and punish Main Street.” 

  • Most troublingly, the Build Back Better Act: 
    • expands the 3.8% surtax on pass-through businesses with business income above $400,000 ($500,000 joint return).

    • the threshold is even lower for family businesses held as trusts, with the surtax applying to income above $13,000. When combined with the other surtaxes on certain pass-through businesses, these tax changes create a 48.8% federal effective tax rate on pass-through business income before even considering state and local taxes.

    • creates a four-week federal paid family and medical leave program for all workers without regard to employer size.

    • increases civil monetary penalties on small businesses with isolated errors when trying to comply with complicated federal employment law—maximum minimum wage and overtime violations are increased from $1,100 to $20,740 per violation, and the maximum tipped credit violation is increased from $1,100 to $11,620.

  • On November 17 and 19, NFIB hosted webinars titled,
    • Tax Preparation for 2022 with JJ the CPA”: PPP, EIDL, and ERC Considerations, and
    • The Federal Covid-19 Vaccine Mandates – What You Need to Know About the New OSHA and Federal Contractor Vaccine Rules.

      You can watch them here.

Next Main Street Minute November 29.

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