From your small-business-advocacy team in Sacramento
Welcome to the June 17-21 NFIB California Main Street Minute from your small-business-advocacy team in Sacramento.
State Budget
- We have a 2024-2025 state budget! Legislators won’t have to forego their paychecks, which we’re sure worried everyone the most.
- “Two days before its deadline, the Legislature on Thursday [June 13] passed a state budget, largely along party lines,” reports CalMatters. “But with negotiations with Gov. Newsom still ongoing, the final spending plan approved by the start of the fiscal year on July 1 will almost certainly look far different.”
- July 1 is not the end of it, either. Budget negotiations can last all the way through September with trailer bills — follow-up proposals that iron out specific programs in the main budget.
Small Business?
— suspend the net operating loss deduction
— limit the utilization of business tax incentives and credits, including the Research and Development Tax Credit
— require certain income to be excluded from a business apportionment factor when filing on a water’s-edge basis, among several other changes that would harm the state’s business climate.
- A letter of opposition to the bills from a coalition NFIB is part of can be read here.
The Political Machinations of Retail Theft
- Last week, in an environment rife with accusations of political grandstanding and poison-pill amendments, the Legislature advanced a package of 14 bills dealing with retail theft.
- In a nutshell, progressives want to tackle the issue without harming Proposition 47, which they consider sacrosanct and more inviolable than Fort Knox. A November ballot initiative, The Homelessness, Drug Addiction, and Theft Reduction Act, would do just that, rattle 47.
- So, the race is on. Can the measures, four of which NFIB supports (AB 1794, AB 1960, AB 2943, AB 3209), make it to the governor’s desk and be signed by him prior to the June 27 deadline for initiative proponents to request their measure be withdrawn from the November ballot?
- And what if the governor signs all the bills, which would take effect immediately, and the ballot measure also passes? One of so-called poison-pill amendments would have made all the retail theft bills passed by the Legislature null and void, but that doesn’t seem to be gaining any traction, even among some key Democrats.
- Stay tuned. The Sacramento Bee’s Lindsey Holden and Stephan Hobbs describe last week’s drama in this report. And, Politico reports the battle for retail theft solutions is having implications in some of the state’s congressional races as well.
- The package of 14 retail theft bills are: AB 1779 (Irwin), AB 1794 (McCarty), AB 1802 (Jones-Sawyer), AB 1960 (Soria), AB 1972 (Alanis), AB 2943 (Zbur/Rivas), AB 3209 (Berman), SB 1144 (Skinner), SB 1416 (Newman), SB 905 (Wiener), SB 982 (Wahab), SB 1242 (Min), SB 1320 (Wahab), and SB 1385 (Roth).
The Economy
- In a news release NFIB sent last Tuesday (June 11), Small Business Uncertainty Index Reaches Highest Level Since 2020, Chief Economist Bill Dunkelberg piqued quite a bit of media interest with his comment,”… for 29 consecutive months, small business owners have expressed historically low optimism and their views about future business conditions are at the worst levels seen in 50 years. Small business owners need relief as inflation has not eased much on Main Street.”
- NFIB’s research (Jobs Report, Small Business Economic Trends report, etc.) is national in focus, taking an aerial view of the Main Street economy. On the ground in California, last week’s report by the Public Policy Institute of California would seem to corroborate Dunkelberg’s assessment. “Close to seven in ten (68%) expect bad economic times in the next year … Overwhelming majorities of Republicans (85%) and independents (76%) hold this pessimistic view, compared to about half of Democrats (51%). Majorities across regions and demographic groups expect bad times. Pessimism is highest in the Central Valley and Orange/San Diego (72% each) and lowest in the San Francisco Bay Area (59%) … Three in four residents earning less than $80,000 (74%) say they expect bad economic bad times, a share that is higher than those with incomes over $80,000 (63%).
- “Californians also disapprove of the state legislature and the legislators representing their own assembly and senate districts, with a majority of adults and likely voters disapproving and about four in ten each approving. More than six in ten Democrats approve of both the legislature and their own legislators, while solid majorities of Republicans and independents disapprove. Majorities across regions of the state disapprove of both, with the highest disapproval in the Central Valley and Orange/San Diego.”
- Asked to comment on NFIB’s latest Small Business Economic Trends report, from which Dunkelberg’s observation came, State Director John Kabateck told the California Globe, “Before anyone wants to give Congress sole blame for NFIB’s finding that small business owners expecting future business conditions to be better at its worst level in 50 years, consider California’s role in making the opening and operating of a Main Street enterprise as hospitable as delivering mail to the Munsters or Addams Family.”
Is Your Workplace Violence Prevention Plan Written?
- We promised to harp on this in the last Main Street Minute and will again in next week’s Main Street Minute. Your state-mandated Workplace Violence Prevention Plan is to have been written and readable to anyone who requests to see it by July 1.
- More information can be found in this news release NFIB California sent out last Monday (June 3). If you haven’t published one, please don’t wait another day. This is a very time-consuming compliance headache. NFIB California invited an employment law expert with Fisher Phillips to give small-business owners an informative overview of what lies ahead for them, if they haven’t already produced their plans. The 49-minute webinar can be heard through this web story.
- NFIB and its coalition partners lobbied vigorously against the bill mandating the plan. For a quick reminder why, check out the first three paragraphs of our letter of opposition.
Virtual Small Business Day Set, June 27
- Please join us on Thursday, June 27, from 11 a.m. to Noon, for a Virtual Small Business Day from Sacramento.
- Now, more than ever, legislators need to hear your voice about the policies affecting your business. Special guests include State Sen. Republican Leader Brian Jones (San Diego) and State Assemblymember Juan Alanis (Modesto). Topics to be discussed include:
- Minimum wage
- Retail theft
- Unemployment benefits for striking workers
- Taxes
- the Private Attorneys General Act (PAGA)
- State budget
- Single-Payer Health Care
- State of California’s insurance market.
- The event is free but advanced registration is required. Register today. Register here.
The Big Dates
- June 27 deadline for ballot measure to qualify for November. Last day for proponents of a qualified ballot initiative to withdraw it.
- 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
- Last week, NFIB members flew into Washington, D.C. to meet with their elected officials to make the 20% Small Business Deduction permanent and to repeal the beneficial ownership requirements that went into effect on January 1, 2024. Read NFIB’s President Brad Close’s op-ed in The Washington Timesurging Congress to take action on important issues affecting Main Street:
- On June 13, NFIB released Episode 37of the “Small Business Rundown” podcast, featuring NFIB Research Center Executive Director Holly Wade and Federal Government Relations Vice President Jeff Brabant discussing the Main Street economy, why navigating inflation is challenging for small businesses, and highlighting the five steps that Congress and the White House can take to help reduce inflation.
- On June 11, the NFIB Research Center released the May SBET survey, which shows the Uncertainty Index rose to its highest reading since November 2020. Chief Economist Bill Dunkelberg said, “… for 29 consecutive months, small business owners have expressed historically low optimism and their views about future business conditions are at the worst levels seen in 50 years. Small business owners need relief as inflation has not eased much on Main Street.”
Next Main Street Minute June 24.
