September 17, 2023
NFIB California Main Street Minute, Sept. 18-22
Welcome to the September 18-22 edition of the Main Street Minute from your small-business-advocacy team in Sacramento.
Legislature Ends its 2023 Session- The reviews are in.
— “All told, it’s shaping up to be a banner year for SEIU’s clout at the Capitol.” — Politico.
— The most significant agreements are also big wins for Big Labor … it’s clear that unions had the upper hand this session.” — CalMatters
- It also helped when a couple of business industry groups went weak in the knees and cut some deals.
- Of immediate importance to small businesses, given new unemployment insurance (UI) tax rates will be announced in December, is the passage of Senate Bill 799, which not only did nothing to reduce our state’s $18 billion UI trust fund loan it has outstanding with the federal government but also threatens to turn a red-ink gusher into a tsunami by allowing workers who willingly go out on strike to collect unemployment benefits. Well before the passage of SB 799, the Legislature’s own chief analyst called the current condition of California’s UI trust fund “technically insolvent.”
— Glimmer of hope? To those thinking SB 799 must be a slam dunk for Gov. Gavin Newsom’s signature into law, Politico offered this food for thought. “Newsom said he was familiar with the proposal ‘broadly,’ but brought up concerns about a deficit in the state unemployment insurance fund. ‘One has to be cautious about that, as you enter the conversation about expanding its utilization,’ he said. Translation: He’s not jazzed on the idea, but isn’t going to dash hopes — yet. Newsom has signaled fiscal prudence repeatedly over the past year as the state grapples with a downturn in revenue and could use that as a reason to veto the measure if it lands on his desk.”
- NFIB wasted no time in signing two veto-request letters to Governor Newsom, one spearheaded by the California Business Roundtable and 16 other business associations, the other written by the California Chamber of Commerce and co-signed by 109 other business groups.
— From the first letter. “While the federal government provided ample money to pay off the debt through two of the federal pandemic assistance bills, California unlike almost every other state chose to spend that money on other programs, leaving the business community to ‘pay back’ the debt through increased taxes on employers. … The ‘looking for work requirement is mandated by the federal [UI] program. Should this legislation pass, our fund would no longer be in compliance with the federal program, jeopardizing our ability to continue to participate in that program.”
— From the second letter. “SB 799 creates a fundamental unfairness by forcing employers with absolutely no involvement in any strikes to pay for labor disputes they they have no involvement in. UI Fund loans from the federal government are paid off via tax increases on all employers across the state—not just employers who have striking workers.”
Now, back to those deals.- Foremost among the deals is the one the fast-food franchise industry cut with legislative leaders to pass Assembly Bill 1228, which, among other things, removes its 2024 ballot-qualified referendum that would have rightfully overturned a law that had seized control of all wage and workplace decisions away from franchisees and given it to a newly created, non-elected council to make. In the end, the council was allowed to remain, although some of its original power was neutered, and minimum wage rates were boosted. This Los Angeles Times story provides background.
— “Quite frankly, we were looking forward to the fight for passage of the 2024 ballot referendum that we believe would have reversed the wholesale seizure of one segment of the California economy. A government seizure no other state in the nation has ever tried,” said NFIB California State Director John Kabateck in a news release The Sacramento Bee used for its Quote of the Day.
- Another deal cut was the one the health-care industry struck with the SEIU over Senate Bill 525 to boost the minimum-wage rate to $25 an hour for health-care workers. These workers, however, don’t include just doctors and nurses but also a “janitor; housekeeping staff person; groundskeeper; guard; clerical worker; nonmanagerial administrative worker; food services worker; gift shop worker; technical and ancillary services worker; medical coding and medical billing personnel; scheduler; call center and warehouse worker; and laundry worker, regardless of formal job title … Any work performed in the public sector where the primary duties performed are not health care services,” according to the bill’s analysis.
- Other bills that made it to the governor’s desk, which NFIB and its coalition will request a veto of, include measures:
— Prohibiting employment discrimination based on family caregiver status — Requiring successor grocery employers to hire from a list — Limiting the ability of employers to talk to their employees in their own places of business — Modifying sick leave accrual — Redefining a laid-off employee
- A brief description of the above bills, ones NFIB helped defeat, and a few pro-small-business measures that squeaked by can be found in this updated bill list of 57 proposals from the 3,030 measures introduced this year that affected small businesses the most. Unlike the bill list in prior Main Street Minutes, this one leads off with two of the 57 bills the governor has already signed into law, followed by the tranche of measures just sent him at the close of session.
- As a reminder why NFIB chooses some bills and not others, check out this one-page explanation, Why Doesn’t NFIB Take a Position on This Issue?
- This week, the Senate may consider the Credit Card Competition Act as an amendment to government funding legislation. Also, this week, the House may consider health-care legislation to bring transparency to Pharmacy Benefit Managers (PBMs). NFIB is preparing grassroots and Key Votes accordingly.
- On September 13, NFIB Research Center Executive Director Holly Wade testified before the U.S. House Committee on Small Business Subcommittee on Economic Growth, Tax, and Capital Access, watch the hearing here. Read NFIB’s press release.
— Wade said, “Small businesses need certainty to successfully invest, grow, and operate their business. Congress can help mitigate the many economic challenges facing small businesses by providing relief from burdensome regulations and eliminating the threat of tax increases. I appreciate your time and attention to these concerns. Thank you for the opportunity to testify today on behalf of small businesses.”
- On September 12, the NFIB Research Center released the August SBET survey, which showed the Small Business Optimism Index decreased 0.6 of a point in August to 91.3, the 20th consecutive month below the 49-year average of 98.
— Chief Economist Bill Dunkelberg said, “With small business owners’ views about future sales growth and business conditions discouraging, owners want to hire and make money now from strong consumer spending. Inflation and the worker shortage continue to be the biggest obstacles for Main Street.”
Next Main Street Minute September 25.
NFIB is a member-driven organization advocating on behalf of small and independent businesses nationwide.
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