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Posted on 08/17/2002 3:09:20 PM PDT by Swordmaker
MONDAY MORNING MEMORANDUM By Senator Ray Haynes August 12, 2002
When Only Government is Left
Last week I shared some thoughts on how hard it is to do business in this state. With the increased burdens coming out of Sacramento, it is a wonder anyone bothers to do business here at all. I have been contacted by several businesses in the last week, each one indicating that they just don't know how they are going to stay in business.
The Small Business Survival Index 2002 ranks the 50 states according to their respective policy environments for entrepreneurship. The Index can be accessed at
http://www.sbsc.org
It shows that California ranks a dismal 46th in the nation. And after this year, with the bills that are likely to pass in the legislature, I wouldn't be surprised if we fell even lower next year. We are near the bottom and still sinking fast.
The Employment Development Department has just put out its latest statistics. The current unemployment rate is 6.3 percent. That is down slightly from June, but it is a full percentage point higher than it was a year ago. The number of people unemployed is up 177,000 compared with July of last year. 152,400 were in Manufacturing. The other decreases were in mining, construction and transportation. Yet, the number of government employees increased by 74,800 (an increase of 3.1% from July 2001 through July 2002). As I pointed out last week, even though the State of California has been under a hiring freeze since late last Fall, they've managed to hire just about as many employees as they did the year before, when they weren't under a hiring freeze. Remarkable isn't it. You can access the EDD report at
http://www.calmis.ca.gov/file/indcur/cal$pr.txt
Yet in spite of our current situation, the State Legislature wishes to continue to tax and regulate businesses even further. One particularly onerous bill, SB 1661 (Kuehl) both regulates and creates a new tax. It may prove to be the straw that broke the camel's back.
SB 1661 mandates the establishment of a new 12 week paid leave entitlement program funded by billions of dollars in NEW TAXES levied on all California employers and their workers. SB 1661 creates two new taxes. It increases the current state disability insurance tax formula (so employers and EMPLOYEES will pay more by raising the ceiling on wages which can be taxed), and mandates a 14 percent administrative fee (another name for a tax) on large self insured employers. SB 1661 also establishes the new Family Leave Temporary Insurance tax that will be assessed in addition to the SDI tax contributions.
This bill also eliminates the size requirement instituted by the Federal Family Leave Act, so that it applies to all employers, not just ones with over 50 employees. Small businesses could be devastated.
Senator Kuehl continues to state that it will be such a small amount that no one will even miss it. The bill to employees and employers in 2004 will be $2 billion. In 2005 this number jumps to $2.22 billion. Even if the cost was 'small, or nonexistent' the costs to businesses in the rise in absenteeism, and thereby loss of production, could threaten many businesses.
Just one more burden which will force businesses to leave this state, taking their jobs with them.
I think the Small Business Survival Committee has hit the nail on the head. In a press release on July 30, 2002, Raymond J. Keating, Chief Economist for the SBSC states:
"The state of California needs to take the right steps in terms of dealing with its current budget problems. Tax increases would be grossly misguided, only serving to worsen the states competitive position both nationally and globally. Instead, fiscal stewardship dictates reducing the size of government, not placing additional burdens on California's businesses and consumers.
In fact, true economic responsibility dictates that lawmakers not only NOT raise taxes, but redress many of the burdens placed on consumers and businesses - from repealing misguided regulatory measures, including the new emissions mandates, to slashing the size of government and cutting already onerous taxes. These are the policy steps that will help restore economic vitality to the Golden State.
Otherwise, if state officials go ahead with imposing additional tax and regulatory burdens, California's taxpayers, consumers, and businesses, along with their employees, will pay a heavy price."
If Government continues to add new entitlements and taxes in their quest to create a worker's paradise, and chase out all of our employers in the process, whose going to pay the bill for their welfare state?
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Even Worse Budget Woes Predicted
http://www.latimes.com/news/local/la-me-budget7aug07.story?coll=la%2Dheadlin es%2Dcalifornia
08-07-02 As Assembly Democrats struggled to gain passage of an overdue budget by proposing a massive tobacco tax increase, a letter sent to state agencies warns that layoffs, program eliminations and agency overhauls may be necessary to balance next year's spending plan. The letter, prepared by officials at the state Department of Finance, underscores the gloomy fiscal conditions that have contributed to a $23.6-billion budget gap and to analysts' forecasts of five more years of multibillion-dollar budget shortfalls.
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Bullet Tax Misses Opportunity For This Year's Ballot
http://www.bayarea.com/mld/cctimes/news/state/3821924.htm
08-08-02 A proposed constitutional amendment to levy a nickel tax on every bullet sold in California will not be considered this year, meaning the first-in-the-nation measure would not reach voters until at least 2004. The measure cleared one Senate committee, but was pulled from consideration Wednesday before it was to be heard in a second committee. Sen. Don Perata, D-Oakland, ran out of time to get it on November's ballot, said Erin Niemela, his chief of staff. The measure had already missed one ballot deadline and had two more Senate committees to clear before it reached the Senate floor.
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Senate Approves Saban, Blum As UC Regents http://sfgate.com/cgi-bin/article.cgi?f=/c/a/2002/08/09/BA192165.DTL
08-09-02 Wealthy San Francisco financier Richard Blum and entertainment mogul Haim Saban -- one of Gov. Gray Davis' top campaign donors -- were unanimously approved Thursday by the state Senate to serve as University of California regents. Blum, 66, is the husband of U.S. Sen. Dianne Feinstein and holds bachelor's and master's degrees from UC Berkeley. Saban, 57, who created the Mighty Morphin Power Rangers, has given more than $400,000 to Davis since 1998.
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PETER SCHRAG COLUMN California's 40,000 New 'Highly Qualified' Teachers
http://www.sacbee.com/content/opinion/story/3884224p-4909966c.html
08-07-02 By a miraculous laying-on of bureaucratic hands, state education officials have redesignated tens of thousands of inexperienced California teachers as "highly qualified." Under the new definition, quietly adopted by the state Board of Education late in May, a teacher can be listed as "highly qualified" even though he or she has never earned a California teacher credential. In fact those "highly qualified" people need never to have been in a classroom at all. This was not just oversight, a bureaucratic goof. It was a deliberate attempt to satisfy the terms of the new federal education act, and thus continue to get a large chunk of federal education money, with a wave of that wand.
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A Terrible Idea, But...
http://www.sacbee.com/content/opinion/story/3896534p-4922239c.html
08-08-02 What's wrong with Assembly Speaker Herb Wesson's proposal to balance the state budget by raising the cigarette tax to $3 a pack? Take your pick: -- The proposal would replace a stable revenue source (reinstating the vehicle license fee) with an uncertain one (cigarette taxes). A higher tax would cut the number of taxed cigarettes sold in California (although not necessarily the number of smokers; see below.) So no one really knows how much money a higher cigarette tax will bring in. The current tax is 87 cents a pack.
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State plans to tap special phone funds
http://www.signonsandiego.com/news/uniontrib/mon/news/news_1n12budget.html
Ed Mendel 08-12-02 A stalled state budget would take $278 million from two funds financed by fees on monthly telephone bills, a shift that alarmed phone companies and prompted a consumer group to call the plan "stealing." Sacramento Bee
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State Panels A Trove For Davis
http://www.sacbee.com/content/politics/story/3939928p-4965423c.html
08-12-02 Gov. Gray Davis' record-breaking effort to secure campaign cash has been aided by a network of people he has appointed to state boards and commissions, some of whom raise money from businesses and individuals they regulate. A Bee analysis of campaign contributions and the activities of about 100 Davis appointees to state panels found more than a dozen who have sponsored or organized campaign fund-raisers for the Democratic governor. At one 90-minute lunch, the chairman of the board that sets wage regulations solicited a total of $100,000 for Davis' campaign from 10 retail giants affected by those rules.
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Full legislative text, analyses and votes are available on the State Senate web server at:
ttp://www.sen.ca.gov/~newsen/legislation/legislation.htp
Senator Haynes' office can be reached at (909)782-4111 in Riverside or in the capitol at (916)445-9781 To subscribe to this Memorandum by e-mail, please send a request to:
Senator.Haynes@sen.ca.gov
Redistribution or reproduction of this Memorandum with attribution is permitted and encouraged!
California: 2003 leading nominee for newest 3rd world country.
calgov2002:
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There are a lot of excellent, smart, conservative state legislators. But they need more like them to become a majority in many states -- California being a glaring example. Are some FReepers willing to run for the state legislature, there or elsewhere around the country?
You need to get mad. The anti-tax revolt in Tennessee has already cost 16 members of a 99 member State Assembly their jobs, and more will certainly be defeated in the general election in November. Click the second link below for more information.
Congressman Billybob
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