As we await the new legislative session with an abundance of newly elected first-time legislators one cannot help but wonder if any of the new crop will dare to step away from the pack and forge new legislation that will protect businesses instead of continuing the anti-business legislation that has plagued past legislatures and made it so difficult to keep businesses in and attract new businesses to California. Will the attempts to increase costs on California businesses by adding onerous regulations and creating new grounds for litigation continue to permeate proposed legislation? Or, will there be serious consideration given to assisting businesses as a means to protect and improve jobs? Will labor unions, who exert tremendous influence on proposed legislation, get the message that reducing onerous regulations on business saves jobs and that today’s global economy provides a means for employers facing significant increases in labor related costs to eliminate jobs in favor of outsourcing to other states and countries? Or, will unions, jaded by the greed of a corrupt minority of employers ignore the fact that most business owners, if they could earn a reasonable profit, would prefer to use local labor (to maintain better control over their products) and not outsource to inconvenient locations with a potential of lost quality? Last year many bills were introduced into the legislature that would have resulted in tremendous additional costs to businesses and potentially had a significant negative affect on California’s economy had it not been for the prudent actions of Gov. Arnold Schwarzenegger and the assistance of astute business advocacy organizations such as the California Chamber of Commerce in Sacramento and our own San Fernando Valley’s premier business advocacy organization, the Valley Industry and Commerce Association (VICA). Business advocacy organizations met with legislators throughout the year negotiating amendments to bills to enable the legislators to achieve their primary goals without pushing more businesses out of the state and the governor vetoed those where negotiations were not successful. Here is a list of anti-business bills that passed the legislature in 2006 but were vetoed by the governor: – AB 1884: This bill would have increased the cost of doing business in California by forcing employers to subsidize a strike against their companies by providing unemployment insurance benefits to workers unemployed due to a strike. – AB 2209: This bill would have increased the cost of doing business in California by forcing employers to effectively subsidize a strike against their companies by being required to pay directly to all workers an amount equal to all wages and benefits lost due to the strike. It would not only have cost employers the amount of the lost benefits and wages but it would have provided an incentive for workers to strike longer and hold out for more, thereby costing the employer more in future payments and significant additional lost profits during the prolonged strike period. – SB 815: This bill would have rolled back recent workers’ compensation reforms by arbitrarily doubling the permanent disability payments over three years without having to base the increase on reliable data. – SB 840: This bill would have imposed a government-run health care system on all Californians mandating substantial contributions by employers. – SB 1414: This bill would have imposed a tax on employers with over 10,000 employees to spend the equivalent of 8 percent of their total payroll on health care or pay the equivalent amount to the state. – AB 1012: This bill could have disrupted California’s transportationfuels market by mandating the sale of scarce alternative fuel vehicles potentially resulting in significant gas price spikes. – SB 1523: This bill would have encouraged a multitude of investigations by the Attorney General under numerous statutes, including the Unruh Civil Rights Act and environmental laws, bymaking defendant companies pay all the investigation and lawsuit costs, including attorneys’ fees, if the Attorney General “prevailed” (the term “prevailed” could include settlements, changes in operation by a defendant or even a nominal monetary award). – SB 927: This bill would have increased the cost of exporting and importing goods in California by assessing a $60 user fee per container processed through the Los Angeles and Long Beach ports. Let’s hope that this year our legislators will concentrate on introducing legislation that is friendly to both labor and business thereby achieving maximum employment opportunities and enabling California’s businesses and economy to flourish. Gregory N. Lippe, CPA, is managing partner of the Woodland Hills-based CPA firm of Lippe, Hellie, Hoffer & Allison, LLP and Vice-chair of the Valley Industry and Commerce Assoc. (VICA).
