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2015 Job Killers — CalChamber Releases Its Preliminary Report

The California Chamber of Commerce yesterday released a preliminary list of “job killer” bills to call attention to the negative impact that 16 proposed measures would have on California’s job climate and economic recovery, should they become law.

Although we will be opposing a number of bills throughout this year, the ‘job killer’ list represents the worst of the worst. These proposals will unnecessarily increase costs on California employers that will likely lead to a loss of jobs.

The list is preliminary. We expect to add more bills to the list in the coming weeks as legislation is amended, and we will periodically release “job killer” watch updates as legislation changes. Please track the status of “job killer” bills on www.cajobkillers.com or by following @CAJobKillers on Twitter. 

Here is the preliminary list of 2015 “job killer” bills:

Increased Labor Costs

AB 357 (Chiu; D-San Francisco) Predictable Scheduling Mandate/Protected Leave of Absence — Imposes an unfair, one-size fits all, two-week notice scheduling mandate on certain employers that perform retail sales activity, and penalizes these employers with “additional pay” for making changes to the schedule with less than two weeks notice, and additionally imposes an unlimited, protected leave of absence from work as well as a broad new protected class of employees who are receiving public assistance or have an identified family member receiving such assistance.

SB 3 (Leno; D-San Francisco/ Leyva; D-Chino) Automatic Minimum Wage Increase— Unfairly increases’ employers costs while ignoring the economic factors or other costs of employers by increasing the minimum wage by $3.00 over the next two and a half years with automatic increases tied to inflation.

SB 406 (Jackson; D-Santa Barbara) Significant Expansion of California Family Rights Act — Creates less conformity with federal law by dramatically reducing the employee threshold from 50 to less than 5 employees and expanding the family members for whom leave may be taken, which will provide a California-only, separate 12 week protected leave of absence on both small and large employers to administer, thereby increasing costs and risk of litigation.

Increased Fuel Costs

SB 350 (de León; D-Los Angeles) Costly and Burdensome Regulations — Potentially increases costs and burdens on all Californians by mandating an arbitrary and unrealistic reduction of petroleum use by 50%, increasing the current Renewable Portfolio Standard to 50% and increasing energy efficiency in buildings by 50% all by 2030 without regard to the impact on individuals, jobs and the economy.

Tax Increases

ACA 4 (Frazier; D-Oakley) Lowers Vote Requirement for Tax Increases — Adds complexity and uncertainty to the current tax structure and pressure to increase taxes on commercial, industrial and residential property owners by giving local governments new authority to enact special taxes, including parcel taxes, by lowering the vote threshold from two-thirds to 55%.

SB 684 (Hancock; D-Berkeley) Increased Tax Rate — Threatens to significantly increase the corporate tax rate on publicly held corporations and financial institutions up to 15% according to the wages paid to employees in the United States, and threatens to increase that rate by 50% thereafter, if the corporation or institution reduces its workforce in the United States and simultaneously increases its contractors.

SCA 5 (Hancock; D-Berkeley) Lowers Vote Requirement for Tax Increases — Adds complexity and uncertainty to the current tax structure and pressure to increase taxes on commercial, industrial and residential property owners by giving local governments new authority to enact special taxes, including parcel taxes, by lowering the vote threshold from two-thirds to 55%.

Increased Burdensome Environmental Regulation

AB 356 (Williams; D-Santa Barbara) Limits In-State Energy Development — Jeopardizes high paying middle class jobs in resource extraction fields by severely restricting wastewater injections sites and requiring unnecessary monitoring of those sites.

AB 1490 (Rendon; D-Lakewood) Limits In-State Energy Development — Drives up fuel prices and energy prices by imposing a de facto moratorium on well stimulation activities by halting the activity after an  earthquake of a magnitude 2.0 or higher.

SB 32 (Pavley; D-Agoura Hills) Halts Economic Growth — Increases costs for California businesses, makes them less competitive and discourages economic growth by adopting further greenhouse gas emission reductions for 2030 and 2050 without regard to the impact on individuals, jobs and the economy.

Increased Health Care Costs

SB 546 (Leno; D-San Francisco) Health Care Rate Regulation — Threatens employers with higher premiums and interferes with their ability to negotiate with health plans by imposing unnecessary and burdensome new reporting requirements on health plans and insurers in the large group market, and giving the Department of Managed Health Care and the Department of Insurance authority to modify or deny all rate changes in the large group market.

Economic Development Barriers

AB 359 (Gonzalez; D-San Diego) Costly Employee Retention Mandate — Inappropriately alters the employment relationship and increases frivolous litigation by allowing a private right of action and by requiring any successor grocery employer to retain employees of the former grocery employer for 90 days and continue to offer continued employment unless the employees’ performance during the 90-day period was unsatisfactory.

SB 576 (Leno; D-San Francisco) Stifles Mobile Application Technology Development — Stifles innovation and growth in the mobile application economy and creates unnecessary and costly litigation by mandating unnecessary, redundant and impractical requirements that will leave many current and future mobile applications unusable, with no benefit to the consumer.

Increased Unnecessary Litigation Costs

AB 244 (Eggman; D-Stockton) Private Right of Action Exposure — Jeopardizes access to credit for home mortgages, increasing the challenge to attract business to California because of high housing prices, by extending the homeowner’s bill of rights to others, thereby opening the door to more private rights of action.

AB 465 (Hernández; D-West Covina) Increased Litigation — Significantly drives up litigation costs for all California employers as well as increases pressure on the already-overburdened judicial system by precluding mandatory employment arbitration agreements, which is likely pre-empted by the Federal Arbitration Act.

SB 203 (Monning; D-Carmel) Lawsuit Exposure — Exposes beverage manufacturers and food retailers to lawsuits, fines and penalties based on state-only labeling requirements for sugar-sweetened drinks.

 president and CEO of the California Chamber of Commerce

Originally published by Fox and Hounds Daily

Water guzzlers would be punished under state proposal

As reported by the SF Chronicle:

California officials seeking to cut urban water use by 25 percent amid the punishing drought said Tuesday that the best way to get the job done is to spread the hurt unevenly, slapping the biggest guzzling communities with mandatory cuts up to 35 percent.

This means leafy towns on the Peninsula and a handful of faraway suburbs, where tall trees hover and big lawns rule, would have to make the Bay Area’s largest concessions. The plan is to go easier on places like San Francisco that already consume relatively little water on a per capita basis.

While warm Southern California enclaves such as Palm Springs and Beverly Hills, alongside Central Valley cities like Bakersfield, dominate the state’s list of heavy water users, Northern California spots such as Hillsborough, Atherton, Portola Valley, Woodside and Menlo Park also rank high in per capita water use. Consequently, they would be targeted for the strictest cuts on the state’s proposed 10- to 35-percent sliding scale of reductions.

Click here to read the full article

California Cannot Conserve or Over-Regulate Way out of Drought

This week Governor Jerry Brown proclaimed that “a historic drought calls for unprecedented action,” when handing down the latest executive order instating mandatory statewide water restrictions aimed at conserving 1.5 million acre feet of water over the next nine months.

This ambitious “first-time-in-state-history” action and goal is admirable, one I wish can be achieved. But do more laws or in this case, a set of 31-point executive directives, create or even free up more water?

ResevoirA suggested goal of 20 percent reduction of water use last year was never achieved, despite gallant efforts made by communities statewide.

So now, well into the fourth year of drought, the governor now ups the ante with a 25 percent statewide conservation mandate. In doing so, he has opened the door for a myriad of programs, restrictions and regulations to be administered by the bureaucratic, increasingly powerful and gubernatorial-appointed State Water Resource Control Board (SWRCB).

Heat index charts and pictures of empty reservoirs and barren Sierras emphasize the need for all of us to conserve; respecting the resource and what it does in our lives remains essential.

But the ongoing preoccupation on the rules, rule breakers and potential punishment is nothing more than a distraction. While treating the symptoms of drought are important, what must really occur is a concerted effort to cure the disease – in California this means dilapidated infrastructure, undersized reserves, ineffective water policy and dysfunctional, non-scientific environmental regulations.

What is certain is that Governor Brown’s latest executive order clearly expands the authority of the SWRCB over all surface and ground water use, health, data, movement, pricing, program enforcement and punishment. Regional and community water authorities are now left scrambling to develop as yet unknown compliant water management criteria to avoid unknown penalties. But the most powerful tool for the SWRCB lies in its authority to determine beneficial use. This means the board gets to decide what water can be used where, when and how on a case by case basis.

The order imposes requirements on farm water users; ratcheting up farm water use reporting mandates, the failure of which is punishable by the state.

Suspending reality, environmental activists issued statements slamming the order for exempting agriculture from 25 percent conservation requirements. They ignore the fact that farmers have been hit hard repeatedly over the past four years and have met their conservation requirements.

Receiving zero percent of their water right last year, on farm conservation practices implemented during this historic drought included:

  • Fallowing approximately 800,000 acres of fields
  • Downsizing 17,100 employees
  • Increasing consumer prices on domestic produce by estimated 10-25 percent, and taking a 4% loss in production value.

Asking a farmer to conserve 25 percent of zero, while you can’t figure out what day to turn your sprinklers on, , is an insult to your intelligence, not theirs.

Zero from zero is zero.

All these orders and actions are like the proverbial image of rearranging deck chairs on the Titanic. You can’t put a bandage on a gashed jugular and expect to survive. Our crisis won’t be avoided by conserving, we must tackle the problem head-on if California is to provide equitable and reliable water supplies to families, farms and fish.

The real question is “what kind of future does California want to have?” One that continues the tradition of the last century, fostering innovation and growth or one that says the Golden State’s glory days are past, so simply maintain status quo. Establishing water supply reliability provides opportunity for prosperity and growth for all.

True power doesn’t come from regulation, but from solutions and commonsense.

To provide an equitable and reliable clean water supply to all water users – farm, urban and environmental – the state and federal officials must address:

1)    California’s grossly dilapidated and inadequate water infrastructure statewide – including storage, recycling, and access,

2)    Revamp our 50-year-old water and environmental protection policies to accurately identify and address our 21st century concerns. We need to employ 21st Century science, technology and modeling tools to achieve attainable and sustainable results for the health of all California.

Conservation and regulation sound good at a press event. But the reality is those approaches are woefully inadequate at solving California’s root problems.

Aubrey Bettencourt is Executive Director, California Water Alliance

Originally published by Fox and Hounds Daily

Mandatory water restrictions could be just the beginning

Faced with a crisis unprecedented in California’s history or his own tenure in office, Gov. Jerry Brown unveiled mandatory water restrictions at Phillips Station, a Sierra Nevada locale hit hard by this year’s meager snowfall. Cities and towns, he said, must now cut their water consumption by 25 percent from statewide urban usage in 2013; local agencies that failed to measure up faced fines of up to $10,000 a day, according to the Los Angeles Times.

After repeatedly signaling his reluctance to impose Draconian conservation measures, Brown’s announcement signaled not just the severity of California’s drought, but the intensity of the political test headed his way. After his last term in office, spent carefully navigating between his Republican opposition and frustrated Democrats to his left, Brown’s delicate balance threatened to come apart over the water crisis. Despite focusing almost exclusively during his re-election campaign on passing the state’s new water bond propositions — and marshaling bipartisan support for his most recent water aid package — Brown has found himself weathering criticism from conservatives and liberals alike.

Just the beginning

As the Times noted, although Brown’s new restrictions quickly received support from municipalities across California, officials have already indicated that the 25 percent cut was probably just a first step:

“Lester Snow, executive director of the California Water Foundation and former state secretary of natural resources, said even more restrictions may be necessary in the future, such as banning all outdoor water use. ‘We’re probably going to need more action before we’re through the summer,’ he said.”

Brown’s rhetoric matched the warnings. “People should realize we are in a new era,” he said at Phillips Station. “The idea of your nice little green lawn getting watered every day, those days are past,” the New York Times reported. A significant impact was expected not only on Californians’ yards but on their cleaning, drinking and showering habits as well.

Farm fight

One group of residents, however, escaped the cutbacks for now: large farmowners. Because they do not get their water through the local water agencies affected by Gov. Brown’s executive order, his 25 percent restriction did not apply to their significant consumption and use. Brown did, however, require the farmers “to offer detailed reports to state regulators about water use, ideally as a way to highlight incidents of water diversion or waste,” according to the New York Times.

FarmFor some critics, that burden was not substantial enough. “According to the Public Policy Institute of California, about 9 million acres of farmland in California are irrigated, representing about 80 percent of the water used by people,” the Sacramento Bee reported. So-called big ag has garnered friends and enemies across California as a consequence of its muscular presence in Sacramento. “Politically,” the Bee noted, “agriculture occupies an influential rung in the hierarchy of industries lobbying – and contributing to – California’s elected officials. The $40 billion industry employs about 420,000 and has made California the nation’s top agricultural producing state, sustaining its image as the nation’s breadbasket.”
But all California farms were not created economically equal. Some analysts have already begun to predict that future cutbacks will fall more heavily on farmers with relatively less profitable, and more easily imported, crops.

Laying blame

Whatever the future might hold for water consumers, Brown’s own political situation has quickly soured. In a bitter irony, as the Washington Post pointed out, some of the Golden State’s current struggles traced back to the grandly liberal water policy adopted by Brown’s own father, former Gov. Pat Brown.

Political chickens have come home to roost on either side of Brown’s often self-consciously judicious brand of policymaking. To his left, frustrated liberals complained that agriculture must cut back far more. To his right, conservative critics like Assemblyman Tom Donnelly, R-Twin Peaks, blasted Brown for an infrastructure agenda that put high-speed rail above dams, desalinization and environmental regulatory reform.

And to add insult to injury, Brown’s efforts to liberalize California criminal law have indirectly contributed to the state’s growing marijuana consumption — which, in turn, has led to massive water consumption.

Originally published by CalWatchdog.com

EPA Regulation: Unjustified and Punitively Burdensome

Does anyone remember President Obama’s executive order requiring that regulations be justified and not unduly burdensome? It would be hard to find a better  example of the vast gap between requirement and reality than in Michigan v. EPA, before the Supreme Court Wednesday, March 25.

At issue is the EPA’s new nationwide rule slashing mercury and other emissions that would put coal- and oil-fired power plants in the cross-hairs of what industry representatives describe as the EPA’s “most costly rule” ever under The Clean Air Act. Unfortunately, the very political “science” behind the EPA’s claim of far greater benefits than the 10-digit annual compliance costs comes nowhere close to justifying the policy.

Power plants emit only a tiny fraction of the mercury released into America’s air. The EPA reported that in 1995, total U.S. emissions from all human activity (158 tons) was about 3 percent of all mercury released to the air from all sources (5,500 tons). And power plants are only part of that total. Eliminating so little mercury will not save many thousand lives, as the EPA asserts. But it will dramatically raise the cost of coal-powered electricity.

Perhaps most troubling has been the EPA’s use of selective science to transform small effects into massive benefit claims. For example, it ignored the fact that CDC surveys show blood mercury levels for American women and children falling and already below the levels found safe by both the EPA and FDA, and well below the standard set by the World Health Organization.

The EPA could have used evidence from a University of Rochester study of the Republic of the Seycheles, whose residents consume types of fish — the primary “carriers” of methylmercury from atmospheric deposition to humans — similar to American diets. But the Center for Science and Public Policy found that the study of high-dose exposure, which followed the same children from six months to nine years of age, found “no observable health effect effects associated with fish consumption in which methylmercury is present.”

Instead, the EPA based its criteria on a study of Faroe Islanders. Not only do they eat more fish, their diets include a great deal of pilot whale meat and blubber. That gives them not only far higher doses of mercury, but also of PCB. Further, they ingest little selenium (which limits conversion to methylmercury), or fruits and vegetables. Given that in epidemiology, one of the most basic rules is that “the dose makes the poison,” their circumstances are virtually irrelevant to Americans. As the Center for Science and Public Policy concluded, “The Faroe Islands study should not be the sentinel study upon which assessment of methylmercury inake via should be gauged.”

The proposed EPA mercury restrictions on power plants, despite a massive PR campaign to the contrary, would have very small effects on human exposure to mercury, at a very high price. And there is no need for a nationwide command and control “solution.” The EPA has found that only “between 1 and 3 percent of women of childbearing age (the group of most concern) eat sufficient amounts of fish to be at risk from methylmercury exposure.” And the FDA and most states already issue advisories for citizens to limit their intake of contaminated fish.

Mandating massively expensive policies on everyone is not justified because a small fraction of women of childbearing age are potentially at risk from mercury ingestion, out of fear some of them may not sufficiently heed existing warnings. That is particularly so when there is so little evidence that substantially higher exposures than in America impose measurable damage. Rather than being “justified and not unduly burdensome,” the EPA mercury rule is unjustified and punitively burdensome.

Gary Galles is a Professor of Economics at Pepperdine University

California Chemical Laws Fail Science Test

Every day, we make choices that carry a degree of risk. Car crashes are the leading cause of death for those under 44, but that doesn’t stop us from getting behind the wheel. While we can’t completely reduce our risk of a crash, we can lower it by avoiding risky behaviors like speeding recklessly or texting.

Yet despite the potential deadliness of an automobile crash, car makers aren’t required to put a safety label on vehicles. And even if they did, it’s unlikely that we’d see a dramatic decline in the number of car crashes. It’s curious then that California law requires warning labels on products that pose dramatically less risk.

When California citizens went to the polls in 1986, it probably seemed like a no-brainer to vote for a law that required manufacturers and businesses to warn consumers when they might be exposed to chemicals that could cause cancer or developmental defects. The law, known as Proposition 65, sounds like an excellent public health initiative in theory. In execution, however, the law has created warning label overload.

There are myriad problems with the law. But in a new paper on Proposition 65, I’ve identified two fatal flaws with Proposition 65’s procedures: the threshold for determining whether a chemical poses a health risk is incredibly low, with no way of explaining to consumers the degree of risk exposure to the chemical poses, and the process for determining which chemicals require warning labels is alarmingly unstandardized.

For starters, a chemical earns a place on the state’s list of dangerous chemicals if California regulators find that exposure causes one excess case of cancer in 100,000 individuals over a 70 year period.

To put that in perspective, roughly one in 100,000 people will die from running or playing soccer. At the same time, research has shown that exercise can lower the risk of heart disease, cancer, diabetes, and a number of deadly health ailments.

This is precisely why Proposition 65 warning labels are ridiculous — there’s no context for what level of exposure poses an actual risk and when a chemical might actually have health benefits.

Take seafood for example. Researchers have suggested that consuming fish and shellfish has numerous health benefits. They contain a number of essential nutrients, including omega-3 fatty acids, but almost all fish contains at least a small amount of mercury. In fact, recent research suggests that consumption of fish by pregnant mothers might actually boost brain development and has no impact on prenatal development.

Mercury is listed as a carcinogen under Proposition 65. Therefore fish in California comes with a warning label.

Scaring consumers away from fish flies directly in the face of U.S. Food and Drug Administration’s advice that “Fish and shellfish are an important part of a healthy diet.” According to the FDA, “for most people, the risk from mercury by eating fish and shellfish is not a health concern.” Yet California’s Proposition 65 warnings indicate otherwise to consumers — research suggests the prominent warning labels in restaurants and markets where fish is sold have resulted in a dramatic decline in fish consumption.

This begs the question: How are California’s regulators determining which chemicals are harmful? Unfortunately, as I’ve explained in my new paper, there appears to be no consistent or standardized testing protocols for what constitutes sufficient evidence to label a chemical as either carcinogenic or causing developmental harm. That’s why the state’s chemical decisions can contradict opinions rendered by the FDA, EPA, and other regulatory agencies across the globe. Chemicals are listed even if the scientific consensus isn’t on the state’s side.

To truly make Californians healthier, the state needs to develop a standardized process, ideally with input from outside experts, for determining which chemicals should be listed and explaining the actual risk to consumers. After all, it’s more likely that taking car rides will have you swimming with the fishes than eating fish will put you six feet under.

Dr. Joseph Perrone, Sc.D., is the Chief Science Officer at the Center for Accountability in Science, a project of the nonprofit Center for Organizational Research and Education. CORE is supported by a wide variety of businesses and foundations, including those in the hospitality, agriculture, and energy industries.

Pain-Pill Abuse Can Be Curbed Through Private-Sector Innovation

Picking the proper medication for our patients is a delicate nuance that is part of the art of medicine.  Cook book medicine does not often make a very good cake. Of late, government regulations have made it more difficult to find the right recipe for our patients particularly when they need pain relief.

Pain is a common problem.  Pain may be chronic or acute and may take on a life of its own particularly if it is not managed properly   I have seen patients with the kind of pain that makes living a normal life nearly, if not completely, impossible. Simple daily functions that most of us take for granted, such as walking or sleeping, can become insurmountable tasks.  Many of these patients unquestionably require the use of pain medication.  For them it is not a choice, it is a necessity.

Opioid pain relievers are almost never a first choice. The side effects are overwhelming particularly for the elderly. But, they can literally be lifesaving for these patients.  Unfortunately, the opioid abuse is a billion dollar industry and the government has decided to come in with an iron fist and impose regulations that neither curb the abuse or establish a means of reasonable accessibility for those who need the medication.

More than 60 people die every day in the United States from prescription drug overdoses.  6.5 million people abused prescription drugs in 2013, more than double that of heroin, cocaine and hallucinogens, combined.

According to a 2010-2011 government survey almost 1.5 million Californians, ages 12 and over, were estimated to have abused painkillers in the previous year. Seven percent of adolescents ages 12 to 17 in California used pain relievers for nonmedical reasons in the previous year, according to 2009-2010 figures.

Taxpayers are left on the hook for increased medical and policing costs, and abuse can also wreak economic devastation by reducing productivity.  Misuse and abuse of opioids is estimated to cost the U.S. $56 billion annually.

The opportunity to find a better means of administering opiods opened the door to the American entrepreneurial spirit and private industry has answers. By utilizing “abuse deterrent formulations” for opioid painkillers, we can significantly reduce the abuse of these drugs.

Breakthrough abuse deterrent formulations provide patients with the same pain relief as conventional opioid medications, but protect against abuse by making crushing, cutting and dissolving for injection extremely difficult and blocking the euphoric effect of the pills when manipulated.

While there are many contentious issues among those in the healthcare field, the facts in this situation are clear: pain management is a necessity for millions of people and non-medical use of these drugs is a medical, ethical and public safety problem that must be addressed.

The Food and Drug Administration considers the development of abuse deterrent formulations a high public health priority, and those of us in the medical community, along with policymakers in the Capitol, should as well.

Research on the relatively new abuse deterrent formulation of OxyContin, the first opioid approved by the FDA to make abuse deterrent claims, found that inhalation and injection abuse dropped from 70 percent to 40 percent, and poison control center calls declined by 32 percent.

It is estimated that utilizing abuse deterrent formulas can save hundreds of millions of dollars in medical and criminal justice costs.   These are dollars that would be far better spent elsewhere, as we struggle to rebound from the worst economic downturn most of us have ever seen.

Abuse deterrent formulations have received widespread support as part of a comprehensive effort to combat prescription drug abuse and promote appropriate pain management, including from the Office of National Drug Control Policy, the Community Anti-Drug Coalitions of America, members of Congress and the National Association of Attorneys General.

The California Medical Association approved a resolution in December 2014, supporting the FDA’s ongoing efforts to evaluate and label abuse deterrent technology and opposing the imposition of administrative deterrents that decrease access to and coverage of prescription drugs with abuse deterrent properties.

Our regulators need to open the doors for these new formulations rather than developing regulations that only hurt those patients who legitimately need these meds.  It is time that healthcare professionals, patient advocates, stakeholders and policymakers move forward to improve access to this new technology.  I welcome this rare opportunity where private industry can work productively with government to help America’s patient find a productive pain-free day.

Marcy Zwelling, MD, is Vice Chair, American College of Private Physicians 

New Studies: CA Has 4th-Highest Taxes and 3rd-Worst Business Climate

The newest figures just released by the Tax Foundation show California continues to be one of the highest-taxes states in the country. According to “Facts & Figures 2015: How Does Your State Compare?” the Golden State now ranks fourth-highest for taxation. The only states with higher taxes are Connecticut and New Jersey, tied for the highest; and New York in third place.

A big problem was pointed out to CalWatchdog.com by Esmael Adibi, A. Gary Anderson Center for Economic Research and Anderson Chair of Economic Analysis at Chapman University: Three of our Western States competitors make the Top Ten list of the least-taxed states: Nevada in third place, Utah in 9th and Texas in 10th.

Overall, the state with the least taxes is Louisiana, followed by Mississippi, South Dakota and Tennessee.

Adibi pointed out that California’s high rank derives largely from it having the highest personal income tax in the country, 13.3 percent at the top marginal rate after voters passed Proposition 30 in 2012. “Prop. 30 really pushed us over,” he said.

He added that, despite the Proposition 13 tax limitation measure, California ranked only 14th-best for property-tax collections. If property here cost less, then California would rank much higher. “But property is so expensive, the taxes paid equal the tax rate times the amount you pay for the property,” he calculated.

California also scored low on the overall 2015 State Business Climate Index, with third-worst business climate. Worst of all was New Jersey, followed by Connecticut.

That’s similar to the finding of CEO Magazine’s survey of CEOs, who have ranked California the worst state in which to do business for eight straight years.

And the Kosmont-Rose Institute Cost of Doing Business Survey found, “California dominates the list of the most expensive cities, with a total of 12 cities – nine in Southern California and three in the San Francisco Bay Area. Los Angeles and the San Francisco Bay Area are the two most expensive metropolitan areas in the western United States.”

Leaving the Golden State

California net population outflow“There’s no question high taxes at least affect some people on whether to stay in California or move to a state with lower taxes,” Adibi pointed out. He provided CalWatchdog.com a chart showing “Net Population Outflow and Destination” for California. “Net” means both those coming into the state and those leaving.

From 2005 to 2013: 279,000 Californians left for Texas, 222,500 for Arizona, 157,200 for Oregon, 153,200 for Nevada, 98,300 for Washington State, 76,900 for Colorado and 59,500 for Utah; all other states were 217,500.

Rankings

Some other rankings from the Tax Foundation “Facts & Figures”:

  • Sources of California state and tocal tax collections: 28.1 percent from property tax, 22.3 percent general sales tax, 30 percent individual income tax, 4.3 percent corporate income tax and 15.3 percent all other taxes.
  • Federal aid as a percentage of general state revenue: 25 percent. The national average is 30 percent. That is, California is a “donor state,” it pays more into the federal government than it gets back.
  • State individual income tax receipts per capita: $1,750, ranking fourth; Connecticut was highest, at $2,174.
  • State and local sales tax rate: 7.5 percent, highest of any state. (Some local governments add to that.)
  • State gasoline tax rate per gallon: 45.39 cents, second highest. Pennsylvania is highest, at 50.50 cents.
  • State spirits excise tax rate, per gallon: $3.30, 39th highest; California is Wine Country. The highest was Washington State, at $35.22.
  • Like most states, California exempts groceries from the sales tax. The highest grocery sales tax is Tennesse’s, at 5 percent.
  • California does not have a state inheritance tax, or “death tax.” The highest state rate is Washington State, at up to 20 percent.
  • California state and local debt is $11,094 per capita, 8th highest. At the top is New York, at $17,405.

Originally published by CalWatchdog.com

4 Online Poker Bills Square Off in CA Legislature

This year could bring gambling to Internet users in California. For years, online poker has been legal in the United States, but not in the Golden State. Now, amidst a host of competing interests, a spate of new bills has emerged in the hope of changing that.

Four pieces of legislation have been put into play: AB9AB167, and two identical bills, AB431 and SB278. Of these, AB9 and AB167 have attracted the most attention.

Lawmakers have hesitated to act boldly, unsure which constituencies should be treated most favorably. But after so much wrangling, some kind of consensus has seemed inevitable: as analysts have agreed, the money in online gambling is too big to ignore.

Tough choices

The market for Internet poker has grown large enough that its would-be masters haven’t hesitated to push and pull for influence in Sacramento. As U-T San Diego reported, legislators still disagree strongly, however, about how to choose among “card clubs, Indian tribes, race tracks and out-of-state gaming companies,” all of which want to play a leading role:

“Lawmakers and these groups have failed for nearly a decade to craft rules for who should control state-regulated poker sites and how much they should pay to do so. During this time, thousands of California poker players have migrated to playing online through unauthorized, often untrustworthy sites based overseas, letting industry and tax money slip away.”

Much of the uncertainty in the Legislature revolved around the way the law should treat California’s Indian tribes, some of which have proven especially eager to get in on the action. That question, in turn, has long been tangled up with controversies over federal policy.

Attention has focused around America’s biggest online poker website, an out-of-state business called Pokerstars. Because it has been working with California’s Morongo Band of Mission Indians and San Manuel Band of Mission Indians, Pokerstars has a vested interest in taking a robust share of the online poker business under a new regulatory regime.

But as the Sacramento Business Journal noted, a rival group of Indian interests, including the Pechanga Band of Luiseno Indians and the Agua Caliente Band of Cahuilla Indians, has accused Pokerstars of raking in illegal profits between 2006 and 2011, when Congress briefly had outlawed online poker as a matter of federal law.

Rival tribes, rival bills

As a result, divisions on legislation have gathered around the battle lines set by the tribes. Pechanga and Agua Caliente have sided with AB9 — authored by Assemblyman Mike Gatto, D-Glendale — because it contains a so-called “bad actor” clause, barring Pokerstars from entering California’s online gambling market.

Morongo and San Manuel, meanwhile, have rallied around AB167, introduced by Assemblyman Reggie Jones-Sawyer, D-Los Angeles. In lieu of a bad actor clause, that bill would punt to the state Department of Justice on which companies could and couldn’t participate.

In an effort to break the impasse, yet another alternative was recently introduced by State Sen. Isadore Hall, D-South Bay, and Assemblyman Adam Gray, D-Merced. Their identical bills are AB 431 and SB 278.

In a statement, the two allies played up their potential to reach a consensus through their legislative authority:

“Hall and Gray serve as Chairmen of each legislative house’s policy committee that oversees gaming within the state and are best positioned to lead a productive dialogue on an iPoker regulatory framework. By working together, their legislation seeks to build consensus on a public policy matter that has eluded California for years.”

Persistent challenges

Despite the substantial market, the lack of movement on online gambling has been attributed to several stubborn factors. As Gatto explained at the recent iGaming Legislative Symposium, legislators have proven risk-averse, and Californians haven’t exactly pushed them to action:

“If we pass a great bill, this isn’t going to make my career in terms of the voting public, and if we don’t pass a bill it’s not going to break anyone’s career. If you went to the average person on the street, I don’t think they’d even have an opinion on this and they would just want to know am I going to see some tax dollars go to my school and my neighborhood.”

Last year, Gatto noted, no more than five constituent emails out of 57,263 sent to him concerned online poker.

Originally published on CalWatchdog.com

Get Ready for Higher Electricity Bills

Is Kevin de León trying to kill off what’s left of California’s manufacturing?

He must. The leader of the California Senate a couple of weeks ago introduced a package of bills that call for a 50 percent reduction in petroleum use by cars and trucks and a 50 percent increase in energy efficiency in buildings, and demands that 50 percent of the electricity generated in the state must come from renewable sources, all by 2030.

All this earns him the warm applause of his base – he was accompanied by environmentalists, union folks and renewable energy entrepreneurs at his press conference – as he pushes the state’s businesses out into the cold.

Look, Californians already pay 50 percent more than the national average for electricity. Industrial customers, including many manufacturers, pay 79 percent more. As a result of that and California’s other high costs, the state has languished with about 1 percent annual growth in manufacturing jobs since the recession while the rest of the country has boomed at close to 7 percent.

And if these bills pass, electricity rates are bound to become shocking, making the state look even uglier to manufacturers. Of course, the effect doesn’t stop with much higher electricity costs.

“This proposal…is an attack on the petroleum industry,” said Tupper Hull of the Western States Petroleum Association. “It will be extraordinarily expensive and coercive. I mean crushingly expensive.”

How expensive no one seems to have calculated. (Why isn’t legislation like this required to submit an economic impact statement?) But whatever the cost is, Californians may well be all alone in bearing these self-inflicted shots.

“We’re going to oppose this very vigorously and not be apologetic about it,” Hull said.

California already has the highest gasoline prices in the continental United States but hey, maybe we can be twice as high as No. 2. Or three times as high. That’d be great for the economy, no?

Originally published by Fox and Hounds Daily