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NFIB California Main Street Minute, January 13-17

NFIB California Main Street Minute, January 13-17

January 12, 2025

"Once it has been contained, we will need to come together quickly and establish state policies that speed up the rebuilding process"

Wildfires, Governor unveils state budget, and more

Welcome to the January 13-17 edition of the NFIB California Main Street Minute from your small-business advocacy team in Sacramento.

Wildfires

“No news can compete with our state’s collective worry – first and foremost – for the safety of our fellow citizens caught in the Los Angeles-area wildfires,” said State Director John Kabateck in a news release to be sent this morning listing NFIB’s top eight legislative priorities. “It is beyond gut-wrenching to see the devastation. Once it has been contained, we will need to come together quickly and establish state policies that speed up the re-building process. In the meantime, all of us need to see what we can do to help family, friends, and our fellow citizens cope in this hour tragedy.”

Resources Links

NFIB has set up an Informational Resources for Southern California Wildfires web story, which will be continually updated with the places to go for financial help in rebuilding. Right now, we have the top four state and federal sites. Future updates will include city and county resources as well.

Who’s Manning the Gavel?

“The state’s troubled insurance marketplace could become a focus of lawmakers’ attention this year as Los Angeles recovers from what may be one of the nation’s most expensive natural disasters, with fires having charred at least 9,000 buildings,” reports the Los Angeles Times.

“Yet the committee that oversees insurance in the state Senate currently lacks a chairperson. [Senate leader Mike] McGuire, who has opened an account to run for state insurance commissioner next year, did not fill the post when he announced other leadership positions last week. The insurance committee chair last year was Democratic state Sen. Susan Rubio, who has been questioned by authorities in a sprawling corruption investigation in Baldwin Park.”

And They’re Off

Hope may spring eternal but reality strikes in an instant. It was too much to expect the Legislature to curb its passion for annoying legislation. An early candidate for NFIB’s opposition is Senate Bill 22, which affects our retail members.

“Existing law provides that a gift certificate, sold after January 1, 1997, is redeemable in cash or subject to replacement with a new gift certificate except that a gift certificate with a cash value of less than $10 is redeemable in cash for its cash value.

“This bill would instead make a gift certificate with a cash value of less than $25, adjusted annually for inflation based on the California Consumer Price Index and rounded to the nearest whole dollar amount, redeemable in cash for its cash value and would require an issuer of gift certificates to display at the cash register a notice of the right of the holder to redeem a gift certificate for cash pursuant to that provision.”

State Budget

As required by last Friday (January 10), Gov. Gavin Newsom presented to the Legislature his state budget for the 2025-2026 Fiscal Year. “The $322.3 billion fiscal plan provides for $228.9 billion in general fund spending and nearly $17 billion in combined reserves – including nearly $11 billion in the state’s Rainy Day Fund and an additional discretionary set-aside of $4.5 billion in the Special Fund for Economic Uncertainties,” according to a news release issued by the governor’s office.

Of interest – but not of comfort – in the budget summary, the Main Street Minute found this morsel on a very import issue: “Unemployment Insurance Trust Fund Loan Interest—$634.3 million one-time General Fund to pay the annual interest payment on the state’s Unemployment Insurance loan balance. The 2024 Budget Act included $50 million from the Employment Training Fund to pay a portion of this interest payment in 2025-26; however, it has since been determined that the Employment Training Fund is unable to support this payment without reductions to existing programs and the payment is not included in the Budget.”

Remember. This money is just to keep up with the interest on the $21 billion the state has borrowed from the federal government to keep its UI Trust Fund solvent. It doesn’t bring down the principal a bit.

“Since the pandemic ended, employer contributions have not been large enough to make progress toward repaying the federal loan,” reports the state Legislative Analyst’s Office. The “federal surcharge – technically referred to as the Federal Unemployment Tax Act (FUTA) tax credit reduction – will keep increasing by 0.3 percent each year (up to 5.4 percent in total) until the loan is repaid … employers will pay an additional 1.2 percent federal surcharge in 2025 (equivalent to $84 per workers).”

It needs pointing out that the $84 penalty is in addition to the average $250 per year per worker that employers pay into the UI Trust Fund.

And to think there were serious and nearly successful efforts last year to give striking workers UI benefits for walking off the job and discussions this year about raising benefit levels. How? By raising payroll taxes, of course. NFIB believes the state fumbled its opportunity to pay off, like 17 other states did, its UI loan when it was awash in Uncle Sam’s free pandemic cash.

Attention: Fresno-area Members

This Thursday, January 16, BizFed Central Valley Business Federation and CalMotion are hosting a Regional Stakeholder Meeting “to discuss the state’s regulations and mandates that impact our transportation fuel supply and costs, as well as its potential threats on economic activity and jobs.” Key findings from new economic research will be presented.

NFIB is a member of BizFed. The meeting will be held from Noon to 1:30 p.m., Thursday, January 16, at Pardini’s, 2257 W. Shaw Ave., Fresno. Email Christina@CapitolPA.com to reserve a seat and lunch. For more information, check out the Central Valley Business Federation’s Facebook page here.

National

Highlights from NFIB Federal Government Relations Principal Josselin Castillo’s weekly report

NFIB released Episode 52 of the “Small Business Rundown” podcast, featuring NFIB President Brad Close and Vice President of Federal Government Relations Jeff Brabant discussing the top small business policy priorities for the next two years.

ICYMI: A federal appeals court has indefinitely suspended the reporting requirements for beneficial ownership

— WATCH: NFIB’s latest webinar, “Small Business Tax Planning for 2025 – Essential Deductions and Savings Strategies,” features a tax expert sharing proposals the new administration has planned and tax savings strategies for 2025.

NFIB Filed a Comment Letter Opposing DOL Rule to Eliminate Subminimum Wage.

Next Main Street Minute January 20.

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