From your small-business-advocacy team in Sacramento
Welcome to the July 1-5 edition of the NFIB California Main Street Minute from your small-business-advocacy team in Sacramento.
Legislatively and politically, the past two weeks were the busiest of the year so far, kicking off a season of activity that has now reached its cruising altitude and will slowly start its descent between August 31, the deadline for the Legislature to pass bills, and the September 30 deadline for Gov. Gavin Newsom to sign bills into law.
NFIB Victory: Bill Giving UI Benefits to Striking Workers Dead
- NFIB’s constant nagging against giving striking workers unemployment benefits contributed to the legislative death of Senate Bill 1116.
- “In the end, some lawmakers realized it’s extremely bad policy to give unemployment benefits to people who were never intended to be recipients of them from a fund that is essentially bankrupt and unable to pay the federal government back for the loans it borrowed to keep the state’s UI system solvent,” said NFIB California State Director John Kabateck in a news release NFIB sent last Thursday (June 27).
- “Yesterday’s vote in the Assembly Committee on Insurance to stop Senate Bill 1116 from advancing any further came less than a year after Gov. Gavin Newsom vetoed an identical measure granting striking workers unemployment benefits,” reported the release which also contained a link to a letter of opposition from a coalition NFIB was part of with other business groups.
- We’d like to think the matter is done and over but will not be surprised if it surfaces again next year.
Today is the Day Your Plans are Due
- Regular readers of the Main Street Minute can be forgiven for being sick of this reminder, but it is essential that businesses know their state-mandated Workplace Violence Prevention Plans are to have been written by today (July 1) and available to anyone who asks to see them.
- If you’re racing to come up to speed with this, check out the ‘First Things First’ section of last week’s Main Street Minute. There is some wonder, given the lack of awareness about the plans, if policymakers might have to extend the deadline—but NFIB urges our members not to bank on that.
2024-2025 State Budget Approved
- State government now has a spending plan for the fiscal year that begins today (July 1) and will run up to June 30 of next year.
- The Legislature and governor leaped their constitutional hurdles, but, alas, that’s not the end of the story. A series of so-called ‘budget trailer bills,’ tweaks and fine tuning of the new state budget, can last all the way up to September 30.
- These trailer bills must have at least a thin veneer of fiscal gloss on them. Here’s an example of how one works, as reported by The Sacramento Bee. “California lawmakers plan to expedite construction for a $1.1 billion revamp of the state Capitol annex by exempting it from state environmental law … Courts have dinged the Department of General Services for failing to provide proper analysis of the project during its environmental review and for not providing the public an adequate chance to comment on its proposed design. A new trailer bill would circumvent those hurdles by exempting the project from the California Environmental Quality Act, or CEQA, altogether.”
- Now, back to the main budget, a $298 billion spending plan that closes a $47 billion deficit, and its winners and losers. Reports The Bee’s Lindsey Holden, “The spending agreement between legislative leaders and Newsom provides funding for a sixth round of local homelessness grants, in-home supportive services for undocumented immigrants and pay increases for health care providers who serve patients enrolled in Medi-Cal, the state’s version of the federal Medicaid program.
- “To offset the spending, lawmakers and the governor plan to cut California Department of Corrections and Rehabilitation spending by $750 million. They will also dip into reserves, cut state operations by nearly 8% and delay a health care worker minimum wage that was to start this summer.”
- Hold on, small business owner! You knew you couldn’t escape without contributing something. You’ll contribute by losing. According to the Senate analysis of The Budget Act of 2024, “The budget plan starts a three-year suspension of corporate net operating loss (NOL) deductions and various business tax credits in 2024—one year earlier than the Governor proposed.”
- The governor signed the new state budget into law on Saturday, June 29.
Ballot Initiatives Set for 2024 General Election
- Secretary of State Shirley Weber announced on the June 27 deadline for proponents to remove their measures for voter consideration that nine initiatives will be on the November 5 General Election ballot.
- But wait. There are deadlines for us common folk, and there are deadlines for the Legislature. By statute, the Legislature can essentially waive the June 27 deadline and direct the Secretary of State to place a constitutional amendment, bond measure, etc. on the November 5 ballot.
- Reports CalMatters on the June 27 deadline, “that isn’t stopping supporters of climate action and school construction from trying to get bond issues on the November ballot — and they say by waiving state election law, they have a little more time than Thursday’s deadline for other ballot measures. Senate leader Mike McGuire, in a Monday statement: ‘We’ve been working like hell on the issue of bonds, and we’re in the home stretch. We do have a little bit of wiggle room — bond measures can be added to the November ballot until July 3.’”
- As reported in last week’s Main Street Minute, Two November Ballot Initiatives Already Decided, two proposals NFIB had its eyes on, including one endorsed by NFIB, have been removed from the ballot either through negotiations or by a State Supreme Court decision.
- Following last Wednesday deadline that leaves four of the nine initiatives NFIB is gauging its members on for consideration to endorse or oppose. They are:
— ACA 13 on voter thresholds on tax initiatives [Important Note: Should Assembly Bill 440 pass this week, this measure would move to the 2026 General Election ballot]
— The Living Wage Act of 2022 on raising the state’s minimum-wage rate
— The Justice for Renters Act on rent control
— The Homelessness, Drug Addiction, and Theft Reduction Act on retail theft.
Governor’s State-of-the-State Address
- Last Tuesday (June 25), Governor Newsom finally delivered his months’-delayed State-of-the-State address. By now, media analysis of it has reached a saturation point, so the Main Street Minute will resist adding too much more.
- As a piece of political stagecraft, the video (it was not a live address) was well-produced and well-delivered, except for two remarks the governor made that had small business owners dropping their jaws, widening their eyes, and scratching their heads: “California is not a high tax state” and “California is a tentpole of the American economy.”
- We don’t want to dwell too much on the richness of those remarks. A beast the size of the California economy is not the governor’s alone to manage. The Legislature has just as big a role, leave aside the daily tinkering state agencies do. At best, our state’s economy can be graded ‘Improvement needed.’ We’re not alone in thinking that. Here are rankings California has among other states in economic performance as measured by the following media and institutes:
— 25–CNBC’s America’s Top States for Business
— 37–Forbes Best States to Start a Small Business (2024)
— 37–US News’ Best States 2023
— 42–Truth in Accounting’s Financial State of the States 2023
— 47–American Legislative Exchange Council’s Rich States Poor States
— 48–Fraser Institute’s Economic Freedom Index
— 48–Tax Foundation’s 2024 State Business Tax Climate Index
NFIB Co-Signs Letter to Governor on Insurance Rates
- Speaking of the governor, NFIB joined with other groups in co-signing a letter to him supporting his proposal to streamline the insurance rate review process.
- “California’s insurance market is in crisis – with millions of consumers and businesses struggling to find access to the coverage they need,” said the letter. “Long delays in the rate review process are a primary driver of the current crisis. Rate reviews can take a year or longer on average to complete. In fact, by the time rates are approved, they are outdated and no longer reflect market conditions.”
Small Business Day
- NFIB California thanks its members who attended our first Small Business Day of the year, a virtual one, last Thursday (June 27), and we thank Assemblymembers Juan Alanis and Josh Hoover for joining us.
- The next NFIB event is a Day at the Capitol, Tuesday, August 13. Hope you can make it. The more members who attend, the louder we speak, and the better our message is heard. Invitations will be mailed to all NFIB members in California. For any question, call or email Grassroots Manager Taylor Criddle at 916-448-9904, [email protected].
Of Note …
- The state tax on a gallon of gas goes up today (July 1). “In California,” reports Nerdwallet, “the state’s excise tax on gas will rise from 57.9 cents per gallon to 59.6 cents per gallon, according to the California Department of Tax and Fee Administration. When other state taxes and fees are taken into account, the state tax on a gallon of fuel in California will rise from about 68 cents to about 70 cents.”
Also of Note …
- “A handful of federal judges cannot begin to ‘match’ the collective wisdom the American people possess in deciding ‘how best to handle’ a pressing social question like homelessness.” – Supreme Court Justice Neil Gorsuch on upholding cities’ rights to ban homeless from sleeping outdoors.
Calendar
- July 3 (upon adjournment)-August 5 Legislature in summer recess
- August 31 deadline for bills to have passed Legislature and sent to governor
- September 30 deadline for governor to sign bills into law
- November 5, General Election Day
National
Highlights from NFIB Legislative Program Manager Caitlin Lanzara’s weekly report
- On June 24, NFIB President Brad Close spoke with Sydney Ember of The New York Times regarding the outlook of small business owners toward the current administration: “I think the regulatory agenda that we’ve seen in some areas in the current administration has been troubling.”
- On June 25, Vice President of Federal Government Relations Jeff Brabant was quoted by CNN following a federal judge’s rejection of the preliminary swipe-fee settlement between Mastercard, Visa, and retailers: “Still, the National Federation of Independent Business viewed it as ‘temporary relief’ for small businesses and not a long-term solution, Jeff Brabant, Vice President of Federal Government Relations at NFIB, told CNN in a statement.”
- On June 28, NFIB Small Business Legal Center sent the following update: Today, we celebrate a landmark decision from the U.S. Supreme Court overruling Chevron deference. This opinion, in the case Loper Bright Enterprises v. Raimondo, significantly diminishes federal agency power and makes regulations far more susceptible to court challenges. NFIB’s amicus brief and press release are here.
- Wednesday’s (July 3) webinar will offer tips to help small businesses handle inflation and discuss best practices for reducing labor costs, strategic pricing, and budget-friendly marketing. Register here.
We wish you and yours a Happy Fourth of July as we celebrate our independence.
Next Main Street Minute July 8.
