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NFIB California Main Street Minute, May 15-19

NFIB California Main Street Minute, May 15-19

May 15, 2023

NFIB California Main Street Minute, May 15-19

Welcome to the May 15-19 edition of the NFIB California Main Street Minute from your NFIB small-business-advocacy team in Sacramento.
Governor Issues May Budget Revise
  • Last week’s Main Street Minute asked the question: Will the budget revise tackle the UI debt? This week’s Main Street Minute has the answer: No.
  • On Friday (May 12), Gov. Gavin Newsom produced the May revise of his proposed state budget for the 2023-2024 Fiscal Year, which the Legislature must pass by midnight on June 15. “California is now facing a $31.5 billion shortfall,” said his May revise. “Further, the federal and state tax filing deadline delays—imposed as a result of severe winter storms across the state—insert greater uncertainty in the state’s projected revenues.”
  • The state will still owe the federal government nearly $20 billion for loans it took out to keep its unemployment trust fund solvent—and unemployment benefits going to those in need of them. Newsom had dangled some hope that a significant dent in that debt would be made—but, alas, not.
  • As a result of leaving the UI loan unpaid, or not paid down, employers can expect to pay this much more in payroll taxes in the coming years, according to this chart produced by the Legislative Analyst’s Office.

  • The interest on the UI loan must still be paid, however, and will be (but nothing more) as Page 83 of the revise notes: “The May Revision proposes a one-time loan of $306 million from the Unemployment Compensation Disability Fund to the General Fund to pay the annual interest payment on the state’s Unemployment Insurance loan balance for the 2023 calendar year. The loan provision will include language to prevent the State Disability Insurance contribution rate from increasing because of the loan.”
  • Only employers pay into the trust fund. California remains one of only four states still in hock to the federal government for UI loans, and it looks like it will stay that way for a while longer. Eighteen other states that also took out loans to cushion the effects of the pandemic have paid them back.
It’s Suspense Week in the Legislature
  • “Twice a year, the two appropriations committees bulldoze their way through hundreds of bills that include more than negligible spending and that they must consider before the end of the legislative session,” reports CalMatters.
  • “In May, the committees go rapid-fire through bills from their own house. In August, legislators will cull bills that have passed from the other house. Last year, they killed about 200 on each day of marathon hearings. Holding a bill in the suspense file is a convenient way for lawmakers to essentially kill a bill, without a recorded vote or explanation. That’s particularly useful on controversial measures, where a public vote or comment could be weaponized against legislators in campaign ads.”
  • The 2023 session of the California State Legislature is deciding 2,920 bills. From that, NFIB California has whittled down to 47 the number of proposals helpful or harmful for small businesses, and from that list further refined it to 14 Good, Bad, and Ugly measures, some of which are on the suspense file.
What Retail Theft?
  • “A Downtown San Francisco Target store sees at least 10 thefts a day, according to employees who said products from cereal to nail polish and aluminum foil are regularly taken,” reported The San Francisco Standard.
  • “It comes as the city deals with the impending loss of two nearby Nordstrom stores closing due to “unsafe conditions” and the recent news of Whole Foods shutting down at Market and Eighth streets.
  • “’I’d say 10 thefts a day,’ said one worker at the Target inside the Metreon, a mall near San Francisco’s Union Square. … ‘Every 10 minutes you see it,’ another worker said who also did not wish to be named.’”
Prop. 13 Redux?
  • A quote attributed to Mark Twain says, “History does not repeat itself, but it rhymes.” Next month, on June 6, will mark 45 years since the passage of Proposition 13, the great rebellion of homeowners against property tax assessments run amok by uncaring and arrogant local governments.
  • Has anything been learned since then? No, if the failure of Senate Constitutional Amendment 4 to make it out of the Senate Governance and Finance Committee last Wednesday (May 10) is any indication.
  • Although Prop. 13 dealt with property taxes and SCA 4 deals with inheritance taxes, they both have a central thread running through them—home ownership.
  • “’It’s unfortunate that this Senate committee was not willing to protect California families from being taxed out of their property when a parent dies,’ said HJTA [Howard Jarvis Taxpayers Association] President Jon Coupal in a statement,” reported by The Sacramento Bee. “’We will be filing an initiative with the attorney general’s office very soon to restore the protections that Proposition 19 [passed in 2020] took away,’ Coupal said.”
  • Coupal will be a guest on an upcoming NFIB California Podcast
ATTN: Sacramento/Folsom-Area Members
  • Come meet Assemblyman Josh Hoover at an NFIB Small Business Roundtable, Friday, May 26, from 2 p.m. to 3 p.m. The event will be held at NFIB-member business Leslie Roper Day & Associates, 950 Glenn Dr. Ste. 230, Folsom. A reservation is required and can be made here. For more information, call or email NFIB Grassroots Manager Taylor Criddle at 916-448-9904, Taylor.Criddle@nfib.org.
National Highlights from NFIB Legislative Program Manager Caitlin Lanzara’s weekly report
  • On May 2, NFIB sent a letter to the Senate Committee on Health, Education, Labor, & Pensions in support of provisions under consideration in S. 1339, the Pharmacy Benefit Manager Reform Act, which would increase transparency in the pharmacy benefit manager market.

On May 11, the bill was considered and approved by the Senate HELP Committee. The Senate may combine it with other healthcare bills (some of which NFIB may oppose) and consider it later this year.

  • On May 5, NFIB signed a coalition letter supporting H.R. 1163, the Protecting Taxpayers and Victims of Unemployment Fraud Act, which provides states with dedicated funding and authority to effectively avoid payment of fraudulent unemployment claims, improve the collection of outstanding overpayments, and enable prosecution of individuals in fraud rings that have stolen tens of billions of dollars from unemployment funds intended for individuals who became unemployed through no fault of their own. The letter is attached.

On May 12, the bill passed the House by a vote of 230-210. It was introduced in the Senate this week, as well, though it is unlikely to receive consideration. The President threatened to veto the legislation.

  • On May 11, NFIB sent a press release disappointed with the U.S. Supreme Court’s decision in National Pork Producers Council v. Ross, which “will not only affect every small, family-run farm in the nation, but it changes how state governments impose regulatory burdens on businesses and consumers outside of that state,” said Beth Milito, Executive Director of NFIB’s Small Business Legal Center. “Proposition 12 will have a staggering impact on pork farmers, consumers, and interstate commerce as a whole. Today’s decision sets a dangerous precedent, and small businesses will bear the consequences.”
Next Main Street Minute May 22.
Photo snip courtesy of the California State Senate web site
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