Legislation has been introduced in Washington prohibiting employers from not hiring people who are not employed. Apparently there are a number of employers that are putting on their job information sheets that people should only apply if they are employed. New Jersey is the only state in the country at this time that prohibits this. As small business people how do you feel about this?
Lee Petillion has been elected to the Board of Small Business California. Lee is an attorney at Petillion Hiraide and Loomis with offices in LA and South Bay. He specializes in corporate financing for early and growth stages companies. He will be heading up the access to capital committee for Small Business California.
We are excited about having Lee on our Board as he has a great background in access to capital for small business. He also has experience in writing legislation to help small business and with his help Small Business California will be introducing legislation next year to help access capital.
Scott Hauge
President
Small Business California
2311 Taraval Street
San Francisco, CA 94116
shauge@smallbusinesscalifornia.org
415-680-2188
Thursday, July 28, 2011
Friday, July 22, 2011
FLASH: Getting Back To Basics
I don’t usually send information this lengthy but workers compensation is a big issue for employers. See below.
Combined loss ratios in workers compensation are running close to 130% and for most businesses they are beginning to see small premium increases. My guess is at some point these will escalate fairly dramatically. We also are going to be watching what develops as a result of court cases that could increase cost.
The increase in permanent disability benefits has been a concern for employers and they do need to be adjusted. It is good to hear from our good friend Christine Baker that she wants to see cost reductions along with changes on the PD benefit.
As all of you I think know Small Business California has worked closely with Christine in her tenure as ED of the Commission on Health Safety and Workers Compensation and were an early supporter of her for the Director of DIR.
Scott Hauge
President
Small Business California
2311 Taraval Street
San Francisco, CA 94116
shauge@smallbusinesscalifornia.org
415-680-2188
----------------------------------------------------------
Friday, July 22, 2011
FLASH REPORT!
DIR's Baker Says Cost Savings Will Accompany Any PD Increase
Share:
Employers have nothing to fear from an anticipated increase in permanent disability benefits for injured workers, but ancillary players in California's workers' comp system -- insurance carriers, attorneys and other vendors -- better look out.
Christine Baker, acting director of the Department of Industrial Relations (DIR), says the administration is ready to increase PD benefits but only after if finds cuts elsewhere in the system to pay for the increase.
"PD benefits were cut substantially but our system is still the fifth costliest system in the country. Somebody is getting all that money, but it's not the injured workers,"
Baker told a group of employers yesterday at the California Coalition on Workers' Compensation's annual meeting in Anaheim. "We believe we need to restore the balance in the system...that labor/management balance between the costs and the benefits."
She pointed out that PD benefits account for less than one-fifth of the total benefits paid,so an increase could easily be off-set by cost-savings elsewhere in the system.
"The very large fluctuations in the costs to employers and the benefits available to injured workers over the last 15 years are the result of many interest groups in a system originally designed to serve the two key stakeholders -- employers and injured workers," Baker pointed out. She noted that applicant attorneys, insurance carriers and medical providers should and will have a voice in the negotiations, but maintained that their voices are secondary.
"Applicant attorneys represent injured workers the same way that insurance carriers represent employers. So in the same way that insurance carriers should have a role so should the applicant attorneys. But the two key stakeholders are labor and management."
The message resonated with the employer dominated crowd, which is clearly on edge over potential changes in benefits as well as expected increase in premiums to account for past cost increases.
Baker maintains that there are different ways to address the PD issue.
If the administration can find enough cost-savings then a solution could be enacted through the PD schedule. "If we can't find enough things to off-set the costs then we have to do it legislatively," says Baker.
"That will be a tradeoff. Sure one could add dollars there, but can we find a dollar savings? I'm not sure. We don't want to have a tidal wave of costs coming in to the system without a measure of savings."
Operational Savings
One of the first areas mentioned for likely cost savings is eliminating the high direct and indirect cost of medical liens.
Baker pointed out that the backlog of liens is the system is delaying resolution of cases and adding unnecessarily to the overall cost of claims. She says the Workers' Compensation Appeals Board doesn't necessarily need more judges to hear cases, just a better way to triage cases.
"In Los Angeles, 85% of the work load is liens. The answer there is not more judges, it's eliminating the unnecessary liens," she says, maintaining that the long-term solution is to reduce the disputes that lead to liens.
"There has to be a better way to resolve fee schedule disputes than asking a workers' comp judge to decipher procedure codes and conversion factors...Authorization of treatment was in dispute in 7 out of 10 medical liens surveyed. Clarifying the extent of [Medical Provider Network] control could reduce the number of those disputes."
DIR and the WCAB are also preparing to cut down on the amount of paperwork associated with liens through electronic filing and cracking down on the filing of amended liens. Baker likened the amount of paperwork from amended liens alone to a tidal wave crashing down on the district offices. She promised that new procedures will be coming shortly from the WCAB to enact these changes.
Operational Changes Planned
Baker also promised to streamline DIR's internal operations while continuing beneficial programs, such as its crackdown on the underground economy. She indicated that there will also be changes in how anti-fraud dollars are spent.
"I'm not so sure it's so efficient to have enforcement dollars going to the DAs and labor standards enforcement. We will be reviewing this together with the [Department of Insurance] and the Fraud Assessment Commission," Baker said.
She later clarified to Workers' Comp Executive that she is not necessarily looking at eliminating anti-fraud funds for the District Attorney's but for a greater emphasis on the bigger fraud cases.
She notes that the data matching program between DIR and the Workers' Compensation Insurance Rating Bureau, which will be undergoing some refinements, allows the department to quickly and cheaply identify uninsured employers. DAs, she maintains, should be using the funds to go after the higher fruit on the tree.
One planned change to the data matching program will be to limit the employer samples to those with at least 5 employees. Baker noted that currently the approach of using employer lists from Employment Development Department and WCIRB that cover all employers is producing too many false positives.
It turns out that many of the employers initially identified as being uninsured are actually owner operators and thus exempt from coverage, so setting the bar at five employees or more is intended to better focus their efforts on the truly uninsured.
Filed by Brad Cain from the happiest place on earth
Combined loss ratios in workers compensation are running close to 130% and for most businesses they are beginning to see small premium increases. My guess is at some point these will escalate fairly dramatically. We also are going to be watching what develops as a result of court cases that could increase cost.
The increase in permanent disability benefits has been a concern for employers and they do need to be adjusted. It is good to hear from our good friend Christine Baker that she wants to see cost reductions along with changes on the PD benefit.
As all of you I think know Small Business California has worked closely with Christine in her tenure as ED of the Commission on Health Safety and Workers Compensation and were an early supporter of her for the Director of DIR.
Scott Hauge
President
Small Business California
2311 Taraval Street
San Francisco, CA 94116
shauge@smallbusinesscalifornia.org
415-680-2188
----------------------------------------------------------
Friday, July 22, 2011
FLASH REPORT!
DIR's Baker Says Cost Savings Will Accompany Any PD Increase
Share:
Employers have nothing to fear from an anticipated increase in permanent disability benefits for injured workers, but ancillary players in California's workers' comp system -- insurance carriers, attorneys and other vendors -- better look out.
Christine Baker, acting director of the Department of Industrial Relations (DIR), says the administration is ready to increase PD benefits but only after if finds cuts elsewhere in the system to pay for the increase.
"PD benefits were cut substantially but our system is still the fifth costliest system in the country. Somebody is getting all that money, but it's not the injured workers,"
Baker told a group of employers yesterday at the California Coalition on Workers' Compensation's annual meeting in Anaheim. "We believe we need to restore the balance in the system...that labor/management balance between the costs and the benefits."
She pointed out that PD benefits account for less than one-fifth of the total benefits paid,so an increase could easily be off-set by cost-savings elsewhere in the system.
"The very large fluctuations in the costs to employers and the benefits available to injured workers over the last 15 years are the result of many interest groups in a system originally designed to serve the two key stakeholders -- employers and injured workers," Baker pointed out. She noted that applicant attorneys, insurance carriers and medical providers should and will have a voice in the negotiations, but maintained that their voices are secondary.
"Applicant attorneys represent injured workers the same way that insurance carriers represent employers. So in the same way that insurance carriers should have a role so should the applicant attorneys. But the two key stakeholders are labor and management."
The message resonated with the employer dominated crowd, which is clearly on edge over potential changes in benefits as well as expected increase in premiums to account for past cost increases.
Baker maintains that there are different ways to address the PD issue.
If the administration can find enough cost-savings then a solution could be enacted through the PD schedule. "If we can't find enough things to off-set the costs then we have to do it legislatively," says Baker.
"That will be a tradeoff. Sure one could add dollars there, but can we find a dollar savings? I'm not sure. We don't want to have a tidal wave of costs coming in to the system without a measure of savings."
Operational Savings
One of the first areas mentioned for likely cost savings is eliminating the high direct and indirect cost of medical liens.
Baker pointed out that the backlog of liens is the system is delaying resolution of cases and adding unnecessarily to the overall cost of claims. She says the Workers' Compensation Appeals Board doesn't necessarily need more judges to hear cases, just a better way to triage cases.
"In Los Angeles, 85% of the work load is liens. The answer there is not more judges, it's eliminating the unnecessary liens," she says, maintaining that the long-term solution is to reduce the disputes that lead to liens.
"There has to be a better way to resolve fee schedule disputes than asking a workers' comp judge to decipher procedure codes and conversion factors...Authorization of treatment was in dispute in 7 out of 10 medical liens surveyed. Clarifying the extent of [Medical Provider Network] control could reduce the number of those disputes."
DIR and the WCAB are also preparing to cut down on the amount of paperwork associated with liens through electronic filing and cracking down on the filing of amended liens. Baker likened the amount of paperwork from amended liens alone to a tidal wave crashing down on the district offices. She promised that new procedures will be coming shortly from the WCAB to enact these changes.
Operational Changes Planned
Baker also promised to streamline DIR's internal operations while continuing beneficial programs, such as its crackdown on the underground economy. She indicated that there will also be changes in how anti-fraud dollars are spent.
"I'm not so sure it's so efficient to have enforcement dollars going to the DAs and labor standards enforcement. We will be reviewing this together with the [Department of Insurance] and the Fraud Assessment Commission," Baker said.
She later clarified to Workers' Comp Executive that she is not necessarily looking at eliminating anti-fraud funds for the District Attorney's but for a greater emphasis on the bigger fraud cases.
She notes that the data matching program between DIR and the Workers' Compensation Insurance Rating Bureau, which will be undergoing some refinements, allows the department to quickly and cheaply identify uninsured employers. DAs, she maintains, should be using the funds to go after the higher fruit on the tree.
One planned change to the data matching program will be to limit the employer samples to those with at least 5 employees. Baker noted that currently the approach of using employer lists from Employment Development Department and WCIRB that cover all employers is producing too many false positives.
It turns out that many of the employers initially identified as being uninsured are actually owner operators and thus exempt from coverage, so setting the bar at five employees or more is intended to better focus their efforts on the truly uninsured.
Filed by Brad Cain from the happiest place on earth
Wednesday, July 20, 2011
Amazon Ballot Measure
Small Business California has been a strong supporter of requiring Amazon to collect sales tax. We feel that our brick and mortar stores deserve to be on a level playing field with out of state Internet companies. It is a simple fairness issue.
Amazon is in the process of circulating a petition to put this on the ballot. See below the wording of this. It will take about 505,000 signatures to put this on the ballot June 2012.
I don’t know if we can prevent this from getting on the ballot as Amazon has a lot of money to pay for signatures. I do think however we should be talking to our employees, customers and friends about this asking them not to sign.
Even if we fail we will have laid the groundwork to defeat the measure when it comes up on the ballot. What do you think?
Scott Hauge
President
Small Business California
2311 Taraval Street
San Francisco, CA 94116
shauge@smallbusinesscalifornia.org
415-680-2188
The Attorney General of California has prepared the following title and summary of the chief purpose and points of the proposed measure:
REFERENDUM TO OVERTURN LAW REQUIRING INTERNET RETAILERS TO COLLECT SAME SALES OR USE TAXES AS OTHER RETAILERS.
If signed by the required number of registered voters and filed with the Secretary of State, this petition will place on the statewide ballot a challenge to an existing state law. The law must be approved by voters at the next statewide election to remain in effect. The law expands the definition of retailers
considered “engaged in business” in California to include certain Internet retailers selling toCalifornia consumers, so that out-of-state Internet retailers also collect existing sales or use taxes. (11-0019)
Amazon is in the process of circulating a petition to put this on the ballot. See below the wording of this. It will take about 505,000 signatures to put this on the ballot June 2012.
I don’t know if we can prevent this from getting on the ballot as Amazon has a lot of money to pay for signatures. I do think however we should be talking to our employees, customers and friends about this asking them not to sign.
Even if we fail we will have laid the groundwork to defeat the measure when it comes up on the ballot. What do you think?
Scott Hauge
President
Small Business California
2311 Taraval Street
San Francisco, CA 94116
shauge@smallbusinesscalifornia.org
415-680-2188
The Attorney General of California has prepared the following title and summary of the chief purpose and points of the proposed measure:
REFERENDUM TO OVERTURN LAW REQUIRING INTERNET RETAILERS TO COLLECT SAME SALES OR USE TAXES AS OTHER RETAILERS.
If signed by the required number of registered voters and filed with the Secretary of State, this petition will place on the statewide ballot a challenge to an existing state law. The law must be approved by voters at the next statewide election to remain in effect. The law expands the definition of retailers
considered “engaged in business” in California to include certain Internet retailers selling toCalifornia consumers, so that out-of-state Internet retailers also collect existing sales or use taxes. (11-0019)
Tuesday, July 19, 2011
The results of our survey are a follows.
When small businesses were asked about what they are thinking about the future of their business.
1. 32 said they would move out of state
2. 63 said they wouldn’t move
3. 32 said they would move if they could but my type of business can’t
4. 20 said they plan on moving
San Francisco is implementing a new registration fee for Point of Sale Stations. As I understand it this was authorized by the state for local jurisdictions. Are any of you seeing this from your Cities or Counties.
If you have not seen this it might be coming. See letter from SF below. Click on the letter to enlarge the document.
For those of you in SF were you aware of this?
Scott Hauge
President
Small Business California
2311 Taraval Street
San Francisco, CA 94116
shauge@cal-insure.com
415-680-2188
When small businesses were asked about what they are thinking about the future of their business.
1. 32 said they would move out of state
2. 63 said they wouldn’t move
3. 32 said they would move if they could but my type of business can’t
4. 20 said they plan on moving
San Francisco is implementing a new registration fee for Point of Sale Stations. As I understand it this was authorized by the state for local jurisdictions. Are any of you seeing this from your Cities or Counties.
If you have not seen this it might be coming. See letter from SF below. Click on the letter to enlarge the document.
For those of you in SF were you aware of this?
Scott Hauge
President
Small Business California
2311 Taraval Street
San Francisco, CA 94116
shauge@cal-insure.com
415-680-2188
Monday, July 18, 2011
Doing Business In California
We hear consistently California is a difficult place to do business. I would like to know your answers to the following questions about your business.
I would appreciate your answering the following questions.
1 I would move out of state if I could
2. I wouldn't move
3. I would move if I could but my type of business can’t
4. I plan on moving.
Comments
Small Business California may do a press release on this so I would appreciate as many responses as possible. All responses will be confidential.
Scott Hauge
President
Small Business California
2311 Taraval Street
San Francisco, CA 94116
shauge@smallbusinesscalifornia.org
415-680-2188
I would appreciate your answering the following questions.
1 I would move out of state if I could
2. I wouldn't move
3. I would move if I could but my type of business can’t
4. I plan on moving.
Comments
Small Business California may do a press release on this so I would appreciate as many responses as possible. All responses will be confidential.
Scott Hauge
President
Small Business California
2311 Taraval Street
San Francisco, CA 94116
shauge@smallbusinesscalifornia.org
415-680-2188
Friday, July 15, 2011
Moving On to the Next Big Thing
Many of you know Marty. Please note he is leaving but I thought you would find his accomplishments interesting.
Marty we wish you well.
Scott Hauge
President
Small Business California
2311 Taraval Street
San Francisco, CA 94116
shauge@smallbusinesscalifornia.org
415-680-2188
------------------------------------------------------------
From: Marty Keller [mailto:Marty.Keller@OPR.CA.GOV]
Subject: Moving On to the Next Big Thing
Dear friends and colleagues,
It is with a sense of accomplishment and gratitude that I write to let you know of my decision to resign as the state’s Small Business Advocate effective July 31, 2011.
I am leaving this great job in order to work directly for small business owners. Come the beginning of August, I will be embarking on a different course of advocacy, one that will not be shackled by the restrictions of political appointment. I look forward to sharing the details of this new and exciting adventure in two weeks’ time. You can be sure I will be inviting you to join me.
In the meantime I want you to know how much it has been my privilege over the past four years to serve California’s 3.5 million small business owners as their principal advocate in state government. In this capacity I was happy to advocate on behalf of our state’s thousands of Disabled Veteran Business Enterprise (DVBE) owners as well.
For most of that time the office comprised just me and Michael Gonzalez as my deputy—and Michael has been gone for almost a year. The disparity between our meager resources and the sheer number of small businesses was extremely daunting, and became more so when the financial system collapsed in 2008. In order to accomplish anything of value we had to build and empower a “network of networks” to leverage the immense talents and insights of all those committed to the central contribution of small business to a strong, vibrant, and innovation-centric state economy.
And so from the beginning of my tenure I was able to rely on hundreds of business owners, association leaders, government officials, and technical support professionals, not just in California but across the country. Together we accomplished a number of useful and powerful results that, especially in light of the financial downturn and the current sluggish and fitful rebound, offer our state’s small businesses and DVBEs some tools for profitability and expansion.
• Governor’s Conferences on Small Business: We produced two highly successful Governor’s Conferences on Small Business & Entrepreneurship—the first in Los Angeles in November of 2008 and the second in Oakland in May of 2010. These conferences provided amazing connectivity to information and decision-making not only for those who attended but for the networks to which we all belong. That first conference produced a collaborative list of eleven recommendations to state officials for improving the small business climate; more than 2/3 of them have been implemented partially or completely.
• The Small Business Network: We created an information distribution network, one that regularly sends our items of interest to small business owners and supporters, which are in turn forwarded to greater numbers through network connectivity.
• Small Business Website: We created the state’s first small business website, initially through the Governor’s Office of Planning and Research, where OSBA statutorily resides, and then after April of 2010 through the Governor’s Office of Economic Development. We created a centralized small business/DVBE events calendar on the GOED web page.
• Interagency working group: We initiated an interagency working group which, meeting bi-weekly, provides every agency of state government with a small business mission the opportunity to share information and create collaborations to benefit small businesses.
• Small Business/DVBE Procurement Goals: I had the privilege of working with the state’s 250+ small business/DVBE advocates, thorough professionals dedicated to helping small businesses and disabled vet business owners do business with their particular state departments. During my four years the state has managed on average to place 25% of its procurement with small businesses, and has steadily increased its DVBE placement to just shy of the statutorily-mandated 3%.
• Outreach Programs: We partnered with the state’s remarkable Small Business Development Centers (SBDCs) and Business Matchmaking to sponsor ten outreach events both last year and in the current year, to bring to the far reaches of the state the kind of information and networking offered at the Governor’s Conferences.
• Legislation: We worked on legislation to make it easier for small businesses to succeed in California. AB 31 by Sen. Curren Price expanded procurement opportunities, and last year’s budget brought significant money to our SBDCs and various small business loan programs. My greatest disappointment is the total refusal by the legislature to effect meaningful regulatory and tax reform.
• Small Business Ombudsman: While working on these big picture items, we also worked daily with individual small business owners, connecting them to resources or potential collaborators, collecting unpaid bills from the state, helping them deal with officious bureaucrats, and giving them advice on how to solve their particular problems.
All in all, I believe we made state government a better partner for small businesses than it was when I got here.
But we have still a long way to go.
Small businesses are still, by and large, patronized rather than vigorously supported by our state leadership. While legislators love to give speeches about the importance of small businesses to our economy, they continue to impose onerous and/or petty mandates, while blocking effective reforms. This neglect is no longer sustainable.
In closing, I want to thank every small business owner that I have been privileged to work with, and the leaders of the various small business advocacy organizations across the state, along with my colleagues in local, state, and federal governments. You have shown me universal kindness in our dealings together, and you have put up with all my shortcomings with great forbearance. I look forward to continued collaboration.
Although the economy is tough now, and signs continue to suggest a long slog to recovery, I remain confident that the next wave of prosperity will exceed the expectations of most of us. The explosion of creative ideas, universally supported by the amazing tools and low costs of the network, and proceeding from the new era of abundance that the elimination of bottlenecks that the Internet has facilitated, means that in the near future everyone will be a potential entrepreneur.
We are Californians. “Grateful to almighty God for our freedom,” as we say in the preamble to our constitution, we created our government “in order to secure and perpetuate freedom’s blessings.” It is now up to us to ensure that government does this job we set for it, and stops overstepping its bounds. See you in August.
Yours for an abundant and profitable future,
Marty Keller
Director, Office of Small Business Advocate
Marty we wish you well.
Scott Hauge
President
Small Business California
2311 Taraval Street
San Francisco, CA 94116
shauge@smallbusinesscalifornia.org
415-680-2188
------------------------------------------------------------
From: Marty Keller [mailto:Marty.Keller@OPR.CA.GOV]
Subject: Moving On to the Next Big Thing
Dear friends and colleagues,
It is with a sense of accomplishment and gratitude that I write to let you know of my decision to resign as the state’s Small Business Advocate effective July 31, 2011.
I am leaving this great job in order to work directly for small business owners. Come the beginning of August, I will be embarking on a different course of advocacy, one that will not be shackled by the restrictions of political appointment. I look forward to sharing the details of this new and exciting adventure in two weeks’ time. You can be sure I will be inviting you to join me.
In the meantime I want you to know how much it has been my privilege over the past four years to serve California’s 3.5 million small business owners as their principal advocate in state government. In this capacity I was happy to advocate on behalf of our state’s thousands of Disabled Veteran Business Enterprise (DVBE) owners as well.
For most of that time the office comprised just me and Michael Gonzalez as my deputy—and Michael has been gone for almost a year. The disparity between our meager resources and the sheer number of small businesses was extremely daunting, and became more so when the financial system collapsed in 2008. In order to accomplish anything of value we had to build and empower a “network of networks” to leverage the immense talents and insights of all those committed to the central contribution of small business to a strong, vibrant, and innovation-centric state economy.
And so from the beginning of my tenure I was able to rely on hundreds of business owners, association leaders, government officials, and technical support professionals, not just in California but across the country. Together we accomplished a number of useful and powerful results that, especially in light of the financial downturn and the current sluggish and fitful rebound, offer our state’s small businesses and DVBEs some tools for profitability and expansion.
• Governor’s Conferences on Small Business: We produced two highly successful Governor’s Conferences on Small Business & Entrepreneurship—the first in Los Angeles in November of 2008 and the second in Oakland in May of 2010. These conferences provided amazing connectivity to information and decision-making not only for those who attended but for the networks to which we all belong. That first conference produced a collaborative list of eleven recommendations to state officials for improving the small business climate; more than 2/3 of them have been implemented partially or completely.
• The Small Business Network: We created an information distribution network, one that regularly sends our items of interest to small business owners and supporters, which are in turn forwarded to greater numbers through network connectivity.
• Small Business Website: We created the state’s first small business website, initially through the Governor’s Office of Planning and Research, where OSBA statutorily resides, and then after April of 2010 through the Governor’s Office of Economic Development. We created a centralized small business/DVBE events calendar on the GOED web page.
• Interagency working group: We initiated an interagency working group which, meeting bi-weekly, provides every agency of state government with a small business mission the opportunity to share information and create collaborations to benefit small businesses.
• Small Business/DVBE Procurement Goals: I had the privilege of working with the state’s 250+ small business/DVBE advocates, thorough professionals dedicated to helping small businesses and disabled vet business owners do business with their particular state departments. During my four years the state has managed on average to place 25% of its procurement with small businesses, and has steadily increased its DVBE placement to just shy of the statutorily-mandated 3%.
• Outreach Programs: We partnered with the state’s remarkable Small Business Development Centers (SBDCs) and Business Matchmaking to sponsor ten outreach events both last year and in the current year, to bring to the far reaches of the state the kind of information and networking offered at the Governor’s Conferences.
• Legislation: We worked on legislation to make it easier for small businesses to succeed in California. AB 31 by Sen. Curren Price expanded procurement opportunities, and last year’s budget brought significant money to our SBDCs and various small business loan programs. My greatest disappointment is the total refusal by the legislature to effect meaningful regulatory and tax reform.
• Small Business Ombudsman: While working on these big picture items, we also worked daily with individual small business owners, connecting them to resources or potential collaborators, collecting unpaid bills from the state, helping them deal with officious bureaucrats, and giving them advice on how to solve their particular problems.
All in all, I believe we made state government a better partner for small businesses than it was when I got here.
But we have still a long way to go.
Small businesses are still, by and large, patronized rather than vigorously supported by our state leadership. While legislators love to give speeches about the importance of small businesses to our economy, they continue to impose onerous and/or petty mandates, while blocking effective reforms. This neglect is no longer sustainable.
In closing, I want to thank every small business owner that I have been privileged to work with, and the leaders of the various small business advocacy organizations across the state, along with my colleagues in local, state, and federal governments. You have shown me universal kindness in our dealings together, and you have put up with all my shortcomings with great forbearance. I look forward to continued collaboration.
Although the economy is tough now, and signs continue to suggest a long slog to recovery, I remain confident that the next wave of prosperity will exceed the expectations of most of us. The explosion of creative ideas, universally supported by the amazing tools and low costs of the network, and proceeding from the new era of abundance that the elimination of bottlenecks that the Internet has facilitated, means that in the near future everyone will be a potential entrepreneur.
We are Californians. “Grateful to almighty God for our freedom,” as we say in the preamble to our constitution, we created our government “in order to secure and perpetuate freedom’s blessings.” It is now up to us to ensure that government does this job we set for it, and stops overstepping its bounds. See you in August.
Yours for an abundant and profitable future,
Marty Keller
Director, Office of Small Business Advocate
Wednesday, July 13, 2011
Consultants/Health Reimbursemetn Accounts in San Francisco
I have heard complaints from small business owners about consultants. As most of you know many consultants are not licensed and there really is no oversight of their activities. It has been suggested to me actually by a consultant that these people obtain some form of licensing provided by the state.
Have you had problems with consultants?
What were they doing for you?
Do you think there should be some form of state oversight?
For those of you in San Francisco Thursday at 10 in the GAO committee there will be a hearing on legislation by David Campos requiring businesses with 20 or more employees to pay I believe quarterly into their Health Reimbursement Account at the prescribed $1.36 per hour or $2.07. But it is estimated the cost for businesses affected is about $50 million. While the Economic Report is not yet completed we are being given indications this cost about 1000 jobs.
It will be in either room 250 or 278 at City Hall. It is expected labor will have a big turnout for this.
For those interested I encourage you to attend. If you have any questions please let me know.
Scott Hauge
President
Small Business California
2311 Taraval Street
San Francisco, CA 94116
shauge@smallbusinesscalifornia.org
415-680-2188
Have you had problems with consultants?
What were they doing for you?
Do you think there should be some form of state oversight?
For those of you in San Francisco Thursday at 10 in the GAO committee there will be a hearing on legislation by David Campos requiring businesses with 20 or more employees to pay I believe quarterly into their Health Reimbursement Account at the prescribed $1.36 per hour or $2.07. But it is estimated the cost for businesses affected is about $50 million. While the Economic Report is not yet completed we are being given indications this cost about 1000 jobs.
It will be in either room 250 or 278 at City Hall. It is expected labor will have a big turnout for this.
For those interested I encourage you to attend. If you have any questions please let me know.
Scott Hauge
President
Small Business California
2311 Taraval Street
San Francisco, CA 94116
shauge@smallbusinesscalifornia.org
415-680-2188
Tuesday, July 05, 2011
Bank of America/ SB Cal seeking new Board member
I previously sent an email on Bank of America increasing their interest rate on late payments to nearly 30%. In the interest of fairness please find response by B of A to Kurt Chilcott a CDC lender who is a member of Small Business California.
Small Business California is looking for a new board member in the San Diego area. If you or someone you know is interested please let me know. The ideal board member would have a knowledge of the small business community in San Diego and a desire to shape small business policy in Sacramento and Washington.
Hope you had a great 4th.
Scott Hauge
President
Small Business California
2311 Taraval Street
San Francisco, CA 94116
shauge@smallbusinesscalifornia.org
415-680-2188
On June 25, new guidelines for consumer cards went into effect; customers were notified of these changes in April. If a customer is late with a payment, an interest rate increase is possible. Please note that last word. The bank would first review the account to determine if it is appropriate to raise the rate on future transactions. If there is a penalty for late payments, the maximum the new rate could be is 29.99%, and the customer would be notified at least 45 days in advance. Again, this is for consumer cards, and please note that most other major issuers already had a penalty rate. We also constantly work with our customers to help them understand and manage their accounts, using such tools as free automatic alerts for payment due dates.
As for small business cards, Bank of America eliminated many punitive fees and practices last year:
o Unlike most other issuers, we no longer charge over-limit fees.
o We no longer increase APRs on existing balances.
o We allocate payments above the minimum payment to higher-rate balances first.
o We provide a minimum of 25 days from statement closing date to payment due date.
Also, here is the link to the release last month on our new Small Business Charge Cards: http://mediaroom.bankofamerica.com/phoenix.zhtml?c=234503&p=irol-newsArticle&ID=1563962&highlight=
Kurt, thanks again for keeping us informed of talk out in the field. Hopefully this information will improve others’ understanding, and please let me know if I can provide anything else.
Enjoy the 4th!
Susan
Susan Povak | SVP/CSR National Program Manager | Community Affairs
Bank of America 100 Federal Street MA5-100-10-09 Boston MA 617.434.7333
Small Business California is looking for a new board member in the San Diego area. If you or someone you know is interested please let me know. The ideal board member would have a knowledge of the small business community in San Diego and a desire to shape small business policy in Sacramento and Washington.
Hope you had a great 4th.
Scott Hauge
President
Small Business California
2311 Taraval Street
San Francisco, CA 94116
shauge@smallbusinesscalifornia.org
415-680-2188
On June 25, new guidelines for consumer cards went into effect; customers were notified of these changes in April. If a customer is late with a payment, an interest rate increase is possible. Please note that last word. The bank would first review the account to determine if it is appropriate to raise the rate on future transactions. If there is a penalty for late payments, the maximum the new rate could be is 29.99%, and the customer would be notified at least 45 days in advance. Again, this is for consumer cards, and please note that most other major issuers already had a penalty rate. We also constantly work with our customers to help them understand and manage their accounts, using such tools as free automatic alerts for payment due dates.
As for small business cards, Bank of America eliminated many punitive fees and practices last year:
o Unlike most other issuers, we no longer charge over-limit fees.
o We no longer increase APRs on existing balances.
o We allocate payments above the minimum payment to higher-rate balances first.
o We provide a minimum of 25 days from statement closing date to payment due date.
Also, here is the link to the release last month on our new Small Business Charge Cards: http://mediaroom.bankofamerica.com/phoenix.zhtml?c=234503&p=irol-newsArticle&ID=1563962&highlight=
Kurt, thanks again for keeping us informed of talk out in the field. Hopefully this information will improve others’ understanding, and please let me know if I can provide anything else.
Enjoy the 4th!
Susan
Susan Povak | SVP/CSR National Program Manager | Community Affairs
Bank of America 100 Federal Street MA5-100-10-09 Boston MA 617.434.7333
Friday, July 01, 2011
Please see below changes in IRS Gas Mileage Rate and Sales Tax rates effective July 1. Thanks to our member Burr Pilger and Mayer for sending this.
The year is half over. Small Business California has been active this year in Sacramento and Washington. We have become a go to organization in Sacramento for legislators looking to pass legislation that helps small business.
Our lobbyist Lori Kammerer has testified on dozens of bills and usually is the only representative from the small business community.
We are sponsoring two bills [Buy California and Claims Administrator Reporting of Workers Compensation claims] and have gotten amendments on numerous bills. We also have been a major force in having out of state Internet companies collect sales tax on purchases.
Hank Ryan has continued to expand On Bill Financing in California and is working to expand small business use of energy efficiency vehicles. He frequently gives comments to the CPUC and over the last 6 months SB Cal has met with two CPUC Commissioners and many staff members.
In Washington we were a player in repeal of the 1099 requirement and getting a continuing resolution for the Small Business Innovative Research program.
We continue to be a resource for the media around the country. We provide comments regarding small business positions but more importantly we give them small business owners they can talk to. In the last couple of days our members have talked to the LA Times, SF Chronicle and the Sacramento Business Journal.
If you haven’t joined Small Business California I hope you will consider doing so. The cost is $150 for businesses with less than $1 million receipts and $300 for those $1 million or more.
You can join on line by going to: www.smallbusinesscalifornia.org
Have a great 4th of July weekend!
Scott Hauge
President
Small Business California
2311 Taraval Street
San Francisco, CA 94116
shauge@smallbusinesscalifornia.org
415-680-2188
Beginning July 1, 2011, Two Changes Set to Take Place
IRS Increases Mileage Rate to 55.5 Cents Per Mile
Due to recent increases in the price of fuel, the IRS has revised the optional standard mileage rates for computing the deductible costs of operating an automobile for business, medical, or moving expense purposes and for determining the reimbursed amount of these expenses that is deemed substantiated.
The revised standard mileage rates are:
• 55.5 cents per mile for business use of an automobile.
• 23.5 cents for use of an automobile as a medical or moving expense.
• For automobile use as a charitable contribution, the mileage rate is fixed by statute and will remain at 14 cents.
These revised rates will become effective for mileage allowances that are paid both (1) to an employee on or after July 1, 2011, and (2) for transportation expenses an employee pays or incurs on or after July 1, 2011.
State Reduces Sales Tax Beginning July 1, 2011
Sales tax rates in the State of California will be reduced on July 1, 2011, by 1% due to the expiration of the temporary extension put in place by then Governor Schwarzenegger. The new effective rate for San Francisco will be 8.5%. In Oakland, the new rate will be 8.75%.
For other jurisdictions, see the pdf published by the State Board of Equalization:
http://www.boe.ca.gov/sutax/pdf/Pending_Rates-07-11.pdf
If you have further questions, please contact your BPM advisor or email us at bpm@bpmcpa.com.
The year is half over. Small Business California has been active this year in Sacramento and Washington. We have become a go to organization in Sacramento for legislators looking to pass legislation that helps small business.
Our lobbyist Lori Kammerer has testified on dozens of bills and usually is the only representative from the small business community.
We are sponsoring two bills [Buy California and Claims Administrator Reporting of Workers Compensation claims] and have gotten amendments on numerous bills. We also have been a major force in having out of state Internet companies collect sales tax on purchases.
Hank Ryan has continued to expand On Bill Financing in California and is working to expand small business use of energy efficiency vehicles. He frequently gives comments to the CPUC and over the last 6 months SB Cal has met with two CPUC Commissioners and many staff members.
In Washington we were a player in repeal of the 1099 requirement and getting a continuing resolution for the Small Business Innovative Research program.
We continue to be a resource for the media around the country. We provide comments regarding small business positions but more importantly we give them small business owners they can talk to. In the last couple of days our members have talked to the LA Times, SF Chronicle and the Sacramento Business Journal.
If you haven’t joined Small Business California I hope you will consider doing so. The cost is $150 for businesses with less than $1 million receipts and $300 for those $1 million or more.
You can join on line by going to: www.smallbusinesscalifornia.org
Have a great 4th of July weekend!
Scott Hauge
President
Small Business California
2311 Taraval Street
San Francisco, CA 94116
shauge@smallbusinesscalifornia.org
415-680-2188
Beginning July 1, 2011, Two Changes Set to Take Place
IRS Increases Mileage Rate to 55.5 Cents Per Mile
Due to recent increases in the price of fuel, the IRS has revised the optional standard mileage rates for computing the deductible costs of operating an automobile for business, medical, or moving expense purposes and for determining the reimbursed amount of these expenses that is deemed substantiated.
The revised standard mileage rates are:
• 55.5 cents per mile for business use of an automobile.
• 23.5 cents for use of an automobile as a medical or moving expense.
• For automobile use as a charitable contribution, the mileage rate is fixed by statute and will remain at 14 cents.
These revised rates will become effective for mileage allowances that are paid both (1) to an employee on or after July 1, 2011, and (2) for transportation expenses an employee pays or incurs on or after July 1, 2011.
State Reduces Sales Tax Beginning July 1, 2011
Sales tax rates in the State of California will be reduced on July 1, 2011, by 1% due to the expiration of the temporary extension put in place by then Governor Schwarzenegger. The new effective rate for San Francisco will be 8.5%. In Oakland, the new rate will be 8.75%.
For other jurisdictions, see the pdf published by the State Board of Equalization:
http://www.boe.ca.gov/sutax/pdf/Pending_Rates-07-11.pdf
If you have further questions, please contact your BPM advisor or email us at bpm@bpmcpa.com.
Thursday, June 30, 2011
They weren't bluffing.... Fwd: Notice of Termination due to New California Law
Last night Amazon terminated all its Affiliates in California. This as a result of the budget bill requiring them to collect sales tax.
As I understand it there was an exemption for businesses with less than $500000 in revenues. Amazon seems to have ignored this and terminated everyone.
It also appears that the legislation will require Amazon to collect sales tax with or without the affiliates.
If anyone has information refuting my comments please let me know but barring that it appears to me that this is just plain mean spirited and hopefully there will be a backlash by the people of California against Amazon.
For those of you that are affiliates please note that many other retailers like Wal-Mart and Barnes and Noble are welcoming your business.
Scott Hauge
President
Small Business California
2311 Taraval Street
San Francisco, CA 94116
shauge@smallbusinesscalifornia.org
415-690-2188
---------- Forwarded message ----------
From: Amazon.com Associates Program
Date: Wed, Jun 29, 2011 at 9:40 PM
Subject: Notice of Termination due to New California
Hello,
Unfortunately, Governor Brown has signed into law the bill that we emailed you about earlier today. As a result of this, contracts with all California residents participating in the Amazon Associates Program are terminated effective today, June 29, 2011. Those California residents will no longer receive advertising fees for sales referred to Amazon.com, Endless.com, MYHABIT.COM or SmallParts.com.
Please be assured that all qualifying advertising fees earned before today will be processed and paid in full in accordance with the regular payment schedule.
You are receiving this email because our records indicate that you are a resident of California. If you are not currently a resident of California, or if you are relocating to another state in the near future, you can manage the details of your Associates account here. And if you relocate to another state in the near future please contact us for reinstatement into the Amazon Associates Program.
To avoid confusion, we would like to clarify that this development will only impact our ability to offer the Associates Program to California residents and will not affect your ability to purchase from Amazon.com, Endless.com, MYHABIT.COM or SmallParts.com.
We have enjoyed working with you and other California-based participants in the Amazon Associates Program and, if this situation is rectified, would very much welcome the opportunity to re-open our Associates Program to California residents.
As mentioned before, we are continuing to work on alternative ways to help California residents monetize their websites and we will be sure to contact you when these become available.
Regards,
The Amazon Associates Team
Message Category: Notice of Termination due to New California Law
© 2011 Amazon.com. All rights reserved. Amazon.com is a registered trademark of Amazon.com, Inc. Amazon.com, 410 Terry Avenue N., Seattle, WA 98109-5210, USA.
As I understand it there was an exemption for businesses with less than $500000 in revenues. Amazon seems to have ignored this and terminated everyone.
It also appears that the legislation will require Amazon to collect sales tax with or without the affiliates.
If anyone has information refuting my comments please let me know but barring that it appears to me that this is just plain mean spirited and hopefully there will be a backlash by the people of California against Amazon.
For those of you that are affiliates please note that many other retailers like Wal-Mart and Barnes and Noble are welcoming your business.
Scott Hauge
President
Small Business California
2311 Taraval Street
San Francisco, CA 94116
shauge@smallbusinesscalifornia.org
415-690-2188
---------- Forwarded message ----------
From: Amazon.com Associates Program
Date: Wed, Jun 29, 2011 at 9:40 PM
Subject: Notice of Termination due to New California
Hello,
Unfortunately, Governor Brown has signed into law the bill that we emailed you about earlier today. As a result of this, contracts with all California residents participating in the Amazon Associates Program are terminated effective today, June 29, 2011. Those California residents will no longer receive advertising fees for sales referred to Amazon.com, Endless.com, MYHABIT.COM or SmallParts.com.
Please be assured that all qualifying advertising fees earned before today will be processed and paid in full in accordance with the regular payment schedule.
You are receiving this email because our records indicate that you are a resident of California. If you are not currently a resident of California, or if you are relocating to another state in the near future, you can manage the details of your Associates account here. And if you relocate to another state in the near future please contact us for reinstatement into the Amazon Associates Program.
To avoid confusion, we would like to clarify that this development will only impact our ability to offer the Associates Program to California residents and will not affect your ability to purchase from Amazon.com, Endless.com, MYHABIT.COM or SmallParts.com.
We have enjoyed working with you and other California-based participants in the Amazon Associates Program and, if this situation is rectified, would very much welcome the opportunity to re-open our Associates Program to California residents.
As mentioned before, we are continuing to work on alternative ways to help California residents monetize their websites and we will be sure to contact you when these become available.
Regards,
The Amazon Associates Team
Message Category: Notice of Termination due to New California Law
© 2011 Amazon.com. All rights reserved. Amazon.com is a registered trademark of Amazon.com, Inc. Amazon.com, 410 Terry Avenue N., Seattle, WA 98109-5210, USA.
Tuesday, June 28, 2011
Sales Tax/ Health Cost
In reading the SF Chronicle this morning it appears that the collection of sales tax by out of state Internet companies is part of the Governors budget.
Keep your fingers crossed that this gets passed by the legislature and signed by the Governor. It is estimated it will raise about $200 million for the state and will level the playing field for brick and mortar stores in California.
In the Kaiser Daily Health Journal report today, there were two pieces on the cost of health care in the US.
From 2005 to 2009 health cost reached $2.5 trillion and rose 23%. That is $8100 for every man woman and child in the US and represents about 18% of GNP and rising.
It was also reported that 5% of the population is responsible for slightly over 47% of the cost.
The economic foundation of our country is being threatened by the rising cost of health care spending. Whether you agree or disagree with the health plan that was passed last year this country has got to find solutions to this threat and all of us have to part of the solution.
Scott Hauge
President
Small Business California
2311 Taraval Street
San Francisco, CA 94116
shauge@smallbusinesscalifornia.org
415-680-2188
Keep your fingers crossed that this gets passed by the legislature and signed by the Governor. It is estimated it will raise about $200 million for the state and will level the playing field for brick and mortar stores in California.
In the Kaiser Daily Health Journal report today, there were two pieces on the cost of health care in the US.
From 2005 to 2009 health cost reached $2.5 trillion and rose 23%. That is $8100 for every man woman and child in the US and represents about 18% of GNP and rising.
It was also reported that 5% of the population is responsible for slightly over 47% of the cost.
The economic foundation of our country is being threatened by the rising cost of health care spending. Whether you agree or disagree with the health plan that was passed last year this country has got to find solutions to this threat and all of us have to part of the solution.
Scott Hauge
President
Small Business California
2311 Taraval Street
San Francisco, CA 94116
shauge@smallbusinesscalifornia.org
415-680-2188
Friday, June 24, 2011
Pacific Business Group on Health Health Cost
I serve on the Board of the Pacific Group on Health. This organization is made up of about 50 major employers who have about 3.2 million and 29 employees [CAL Insurance is the 29 employees] that they are providing health coverage for.
The goals of the organization are:
1.Engaging Consumers in Health Care Decisions
2. Paying for Value
3.Redesigning Care Delivery
4. Advancing Value Based Policy
I learned something yesterday that should be shocking to you. In the best case scenario only 2.5% of the payments to health providers are based on pay for performance. The average is 1%.
What an indictment of the US health care system.
It clearly highlights that in the US we pay for procedures with almost no concern of the outcomes of those procedures. In fact if a provider makes mistakes we pay them more than providers that do things correctly. The classic example is acquiring a staph infection at a hospital.
One of the goals of PBGH is to increase the pay for performance to 20% by 2015.
Why am I telling small businesses around the state? The reason is that the cost of health care has been the number one issue for small businesses in each of our 7 Small Business California surveys.
We must be vocal in the debate over reducing health care cost. We must play an active role in questioning the insurance companies how their providers stack up and pushing them to do more. We must let our employees know that they have a role in their health decisions and they must constantly question their providers.
We cannot continue to see health costs rise from the current 17% to 18% [$2.5 Trillion] and yet see the outcomes in many cases at the bottom of the industrial world.
Scott Hauge
President
Small Business California
2311 Taraval Street
San Francisco, CA 94116
shauge@smallbusinesscalifornia.org
415-680-2188
The goals of the organization are:
1.Engaging Consumers in Health Care Decisions
2. Paying for Value
3.Redesigning Care Delivery
4. Advancing Value Based Policy
I learned something yesterday that should be shocking to you. In the best case scenario only 2.5% of the payments to health providers are based on pay for performance. The average is 1%.
What an indictment of the US health care system.
It clearly highlights that in the US we pay for procedures with almost no concern of the outcomes of those procedures. In fact if a provider makes mistakes we pay them more than providers that do things correctly. The classic example is acquiring a staph infection at a hospital.
One of the goals of PBGH is to increase the pay for performance to 20% by 2015.
Why am I telling small businesses around the state? The reason is that the cost of health care has been the number one issue for small businesses in each of our 7 Small Business California surveys.
We must be vocal in the debate over reducing health care cost. We must play an active role in questioning the insurance companies how their providers stack up and pushing them to do more. We must let our employees know that they have a role in their health decisions and they must constantly question their providers.
We cannot continue to see health costs rise from the current 17% to 18% [$2.5 Trillion] and yet see the outcomes in many cases at the bottom of the industrial world.
Scott Hauge
President
Small Business California
2311 Taraval Street
San Francisco, CA 94116
shauge@smallbusinesscalifornia.org
415-680-2188
Tuesday, June 21, 2011
SBA Lending/Bof A
I talked to my friend Tony Wilkinson at the National Association of Government Lenders and he indicated that the 7a program is doing well but money may run out in late September just before the next fiscal year. It does appear however that money will be there next fiscal year.
Some interesting numbers. Lending overall to small business for the first quarter was down from $624 billion to $609 billion. What is really interesting is that 52% of the outstanding small business loans have a maturity of 1 year or less and about 24% are outstanding one to three years and 24% are three years or more.
Of that amount 7a and 504 loans are 60% to 70% of the loans. That is not the way the market should work with the so called lender of last resort has the majority of the market for loans 3years or more.
I don’t know if you saw that Bank of America is going to charge almost 30% interest if you are lat on a payment on a credit card.
If any of you tried to do this in our business with our customers it would be considered usury.
Scott Hauge
President
Small Business California
2311 Taraval Street
San Francisco, CA 94116
shauge@smallbusinesscalifornia.org
415-680-2188
Some interesting numbers. Lending overall to small business for the first quarter was down from $624 billion to $609 billion. What is really interesting is that 52% of the outstanding small business loans have a maturity of 1 year or less and about 24% are outstanding one to three years and 24% are three years or more.
Of that amount 7a and 504 loans are 60% to 70% of the loans. That is not the way the market should work with the so called lender of last resort has the majority of the market for loans 3years or more.
I don’t know if you saw that Bank of America is going to charge almost 30% interest if you are lat on a payment on a credit card.
If any of you tried to do this in our business with our customers it would be considered usury.
Scott Hauge
President
Small Business California
2311 Taraval Street
San Francisco, CA 94116
shauge@smallbusinesscalifornia.org
415-680-2188
Wednesday, June 15, 2011
Small Business Shrinking Payroll
Please see article in NY Times this morning indicating that for the month of May more small businesses are shrinking their payroll than expanding.
http://www.nytimes.com/2011/06/15/business/15jobs.html?_r=1&hp
What is happening in your business?
Are you optimistic about the future?
Are there any unique problems in your industry?
For example one the members of Small Business California who has a cabinet shop indicates in Northern California there are restrictions on the glue they can use but glue coming in from China is being used circumventing the restrictions.
Scott Hauge
President
Small Business California
2311 Taraval Street
San Francisco, CA 94116
shauge@smallbusinesscalifornia.org
415-680-2188
http://www.nytimes.com/2011/06/15/business/15jobs.html?_r=1&hp
What is happening in your business?
Are you optimistic about the future?
Are there any unique problems in your industry?
For example one the members of Small Business California who has a cabinet shop indicates in Northern California there are restrictions on the glue they can use but glue coming in from China is being used circumventing the restrictions.
Scott Hauge
President
Small Business California
2311 Taraval Street
San Francisco, CA 94116
shauge@smallbusinesscalifornia.org
415-680-2188
Wednesday, June 08, 2011
California's business competitiveness
On Friday I will be talking to Steve [see below]. What are your comments?
Of course most small businesses can’t move but I still would like to hear from you about what are the problems of doing business in California and if you could move would you.
Yesterday Blue Shield announced they would be returning all profits above 2%. What do you think about this?
Is there anything a health insurance company could do that would make you feel that they are trying to solve the health insurance problem?
I was a little dismayed when I read in the Chronicle that Insurance Commissioner Jones speaking to the Blue Shield announcement said “ Why should insurance companies determine how much excess profit they should return” Implication any profits are excess.
Scott Hauge
President
Small Business California
2311 Taraval Street
San Francisco, CA 94116
shauge@smallbusinesscalifornia.org
415-680-2188
-------------------------------------
From: Malanga, Steve [mailto:steve@city-journal.org]
Sent: Tuesday, June 07, 2011 1:17 PM
To: Scott Hauge
Subject: california's business competitiveness
Greetings. I am a writer for City Journal magazine working on a piece on the business competitiveness of California, based on some new research on job migration nationally. I was wondering if I could interview you about the key competitive issues that influence small businesses thinking of relocating out of California.
Thanks
Steve Malanga
Senior Editor, City Journal
Senior Fellow, Manhattan Institute
(www.city-journal.org)
Of course most small businesses can’t move but I still would like to hear from you about what are the problems of doing business in California and if you could move would you.
Yesterday Blue Shield announced they would be returning all profits above 2%. What do you think about this?
Is there anything a health insurance company could do that would make you feel that they are trying to solve the health insurance problem?
I was a little dismayed when I read in the Chronicle that Insurance Commissioner Jones speaking to the Blue Shield announcement said “ Why should insurance companies determine how much excess profit they should return” Implication any profits are excess.
Scott Hauge
President
Small Business California
2311 Taraval Street
San Francisco, CA 94116
shauge@smallbusinesscalifornia.org
415-680-2188
-------------------------------------
From: Malanga, Steve [mailto:steve@city-journal.org]
Sent: Tuesday, June 07, 2011 1:17 PM
To: Scott Hauge
Subject: california's business competitiveness
Greetings. I am a writer for City Journal magazine working on a piece on the business competitiveness of California, based on some new research on job migration nationally. I was wondering if I could interview you about the key competitive issues that influence small businesses thinking of relocating out of California.
Thanks
Steve Malanga
Senior Editor, City Journal
Senior Fellow, Manhattan Institute
(www.city-journal.org)
Monday, June 06, 2011
Paid Sick Leave AB 400/SB826/ Out of State Internet Collection of Sales Tax
Small Business California has been tracking closely Assemblywoman Ma’s paid sick leave [AB400]. Many of you have indicated you would like to help defeat this bill.
Small Business California held back its opposition believing that it would not move forward given the provision that it would cost the state about $50 million for In Home Health Services.
We just found out that AB 400 has been made a two year bill meaning it will not move forward this session. We of course will track this next year.
Small Business California is sponsoring SB 826 {826}. This bill would impose minimal fines on Claims Administrators who do not report claims information to the Workers Compensation Information System. This is important in developing workers compensation policy for the state.
It is estimated that between 15 and 25% of the Claims Administrators are either not filing this information or filing incomplete information.
I am pleased to report this bill has passed the Senate and will be going to the Assembly where it is expected to pass.
We think this is important as this will provide a mechanism to keep track of non-compliant Claims Administrator.
For those of you in SF please take a look at the SF Chronicle this morning. In the letters to the Editor page Small Business California has a letter to the Editor supporting the collection of the sales tax by out of state Internet companies.
Scott Hauge
President
Small Business California
2311 Taraval Street
San Francisco, CA 94116
shauge@smallbuisnesscalifornia.org
415-680-2188
Small Business California held back its opposition believing that it would not move forward given the provision that it would cost the state about $50 million for In Home Health Services.
We just found out that AB 400 has been made a two year bill meaning it will not move forward this session. We of course will track this next year.
Small Business California is sponsoring SB 826 {826}. This bill would impose minimal fines on Claims Administrators who do not report claims information to the Workers Compensation Information System. This is important in developing workers compensation policy for the state.
It is estimated that between 15 and 25% of the Claims Administrators are either not filing this information or filing incomplete information.
I am pleased to report this bill has passed the Senate and will be going to the Assembly where it is expected to pass.
We think this is important as this will provide a mechanism to keep track of non-compliant Claims Administrator.
For those of you in SF please take a look at the SF Chronicle this morning. In the letters to the Editor page Small Business California has a letter to the Editor supporting the collection of the sales tax by out of state Internet companies.
Scott Hauge
President
Small Business California
2311 Taraval Street
San Francisco, CA 94116
shauge@smallbuisnesscalifornia.org
415-680-2188
Thursday, June 02, 2011
Internet Tax
Small Business California has been a strong supporter of having out of state Internet companies collect the sales tax on products bought in California.
To us it is a simple fairness issue leveling the playing field between Internet sales and brick and mortar stores. It also will reduce the administrative burden of small businesses as they will not have to keep track of their purchases and pay the use tax. The Board of Equalization has audited hundreds of thousands of small businesses on this issue over the last couple of years.
There are three bills dealing with this issue. In the Assembly Skinner AB 153, Calderon AB 155 and in the Senate Hancock’s S 235.
Calderon’s bill passed the Assembly 47-16 yesterday and Hancock’s bill passed last month. It is not clear to me if Skinners bill has passed the Assembly but if not it is expected to do so.
It seems that some if not all of these bills will get through the Assembly and Senate and go to the Governor. It is not clear whether the Governor will sign any of them. Governor Schwarzenegger vetoed past legislation.
The time has come to implement the collection of the sales tax on out of state Internet companies. For too long our brick and mortar stores have been put at a 9% to 10% disadvantage when competing with these companies.
What makes this interesting to me is the coalition that has been put together. Small Business groups and businesses like the big box stores. Politics truly do make strange bedfellows.
Scott Hauge
President
Small Business California
2311 Taraval Street
San Francisco, CA 94116
shauge@smallbusinesscalifornia.org
415-680-2188
To us it is a simple fairness issue leveling the playing field between Internet sales and brick and mortar stores. It also will reduce the administrative burden of small businesses as they will not have to keep track of their purchases and pay the use tax. The Board of Equalization has audited hundreds of thousands of small businesses on this issue over the last couple of years.
There are three bills dealing with this issue. In the Assembly Skinner AB 153, Calderon AB 155 and in the Senate Hancock’s S 235.
Calderon’s bill passed the Assembly 47-16 yesterday and Hancock’s bill passed last month. It is not clear to me if Skinners bill has passed the Assembly but if not it is expected to do so.
It seems that some if not all of these bills will get through the Assembly and Senate and go to the Governor. It is not clear whether the Governor will sign any of them. Governor Schwarzenegger vetoed past legislation.
The time has come to implement the collection of the sales tax on out of state Internet companies. For too long our brick and mortar stores have been put at a 9% to 10% disadvantage when competing with these companies.
What makes this interesting to me is the coalition that has been put together. Small Business groups and businesses like the big box stores. Politics truly do make strange bedfellows.
Scott Hauge
President
Small Business California
2311 Taraval Street
San Francisco, CA 94116
shauge@smallbusinesscalifornia.org
415-680-2188
Wednesday, May 25, 2011
SBIR/ Governor
A few days ago I wrote to you about a continuing resolution of the Small Business Innovative Research program and the Small Business Transfer program [SB 990]. I know this doesn't have an impact on most of you but to those receiving funds from these programs it is extremely important.
I would like to give you an update as I think you will find it fascinating how Washington works.
Last email I said the House was going to amend the 990 from a one year authorization to a four month authorization. This passed on a voice vote. It then went back to the Senate where there was some discussion of making it a one month authorization.
While this was going on there was the issue of the Patriot Act, which as I understand it, needed to be passed by the end of the month. So 990 got stripped of the language with the Continuing Resolution and became the Patriot Act. We are now down to one week with no vehicle at this point to do a Continuing Resolution.
If this sounds familiar an SBIR bill introduced last year got stripped and became the Don’t Ask Don’t Tell bill which was signed by the President
You can’t make this stuff up.
Jerry Brown has been in office almost 4 months. I am curious how the small business community of California feels about the job he is doing. What are your thoughts.
Scott Hauge
President
Small Business California
2311 Taraval Street
San Francisco, CA 94116
shauge@smallbusinesscalifornia.org
415-680-2188
I would like to give you an update as I think you will find it fascinating how Washington works.
Last email I said the House was going to amend the 990 from a one year authorization to a four month authorization. This passed on a voice vote. It then went back to the Senate where there was some discussion of making it a one month authorization.
While this was going on there was the issue of the Patriot Act, which as I understand it, needed to be passed by the end of the month. So 990 got stripped of the language with the Continuing Resolution and became the Patriot Act. We are now down to one week with no vehicle at this point to do a Continuing Resolution.
If this sounds familiar an SBIR bill introduced last year got stripped and became the Don’t Ask Don’t Tell bill which was signed by the President
You can’t make this stuff up.
Jerry Brown has been in office almost 4 months. I am curious how the small business community of California feels about the job he is doing. What are your thoughts.
Scott Hauge
President
Small Business California
2311 Taraval Street
San Francisco, CA 94116
shauge@smallbusinesscalifornia.org
415-680-2188
Monday, May 23, 2011
FW: S164 Withholding on Government contracts/ SBIR Continuing Resolution
Senator Scott Brown has introduced the Withholding Tax Relief Act of 2011. This will repeal Section 511 of the Tax Increase Prevention and Reconciliation Act of 2005 which mandates that federal, state and local governments withhold 3% from payments for goods and services.
This tax withholding requirement affects all government contracts as well as payment to any person for a good or product provided to a government entity. As I mentioned in a prior email this will take effect December 21,2012.
Withholding of 3% has no relationship to a company’s taxable income and is in effect a loan to the government hurting small businesses cash flow.
Interestingly enough the cost of implementing the law will exceed the revenues anticipated according to a study released by the Department of Defense. According to DOD it will cost $17 billion over 5 years. The Joint Committee on Taxation now estimates the revenue generated is $7 billion over 5 years with only $1.1 billion in additional revenue and remainder due to the float.
Small Business California asks Senators Feinstein and Boxer to support this bill. We ask people receiving this email to contact the Senators office to ask them to support this.
You can do so by emailing Brian McKeon at Brian_McKeon@boxer.senate.gov and TC Ostrander at TC@feinstein.senate.gov
It is expected that Tuesday the House will be taking up a Continuing Resolution for funding of SBIR/Sttr/Cpp programs. S990 passed in the Senate on a voice vote last week.
Funding for the program runs out the end of this month and the Senate bill would continue funding for a year.
In my conversations with Kevin Wheeler in the Senate Small Business Committee and Lori Pepper from Congresswoman Pelosi’s office ‘it appears this will be amended by House Republicans to three or four months instead of a year.
This is a great program not just for small business but for the country and should have had full authorization years ago but it has been tied up by politics and not just Republicans but Nydia Velazquez when she was Chair of the House Small Business Committee.
California small businesses receive more of these contracts than any other state.
Scott Hauge
President
Small Business California
2311 Taraval Street
San Francisco, CA 94116
shauge@smallbusinesscalifornia.org
415-680-2188
This tax withholding requirement affects all government contracts as well as payment to any person for a good or product provided to a government entity. As I mentioned in a prior email this will take effect December 21,2012.
Withholding of 3% has no relationship to a company’s taxable income and is in effect a loan to the government hurting small businesses cash flow.
Interestingly enough the cost of implementing the law will exceed the revenues anticipated according to a study released by the Department of Defense. According to DOD it will cost $17 billion over 5 years. The Joint Committee on Taxation now estimates the revenue generated is $7 billion over 5 years with only $1.1 billion in additional revenue and remainder due to the float.
Small Business California asks Senators Feinstein and Boxer to support this bill. We ask people receiving this email to contact the Senators office to ask them to support this.
You can do so by emailing Brian McKeon at Brian_McKeon@boxer.senate.gov and TC Ostrander at TC@feinstein.senate.gov
It is expected that Tuesday the House will be taking up a Continuing Resolution for funding of SBIR/Sttr/Cpp programs. S990 passed in the Senate on a voice vote last week.
Funding for the program runs out the end of this month and the Senate bill would continue funding for a year.
In my conversations with Kevin Wheeler in the Senate Small Business Committee and Lori Pepper from Congresswoman Pelosi’s office ‘it appears this will be amended by House Republicans to three or four months instead of a year.
This is a great program not just for small business but for the country and should have had full authorization years ago but it has been tied up by politics and not just Republicans but Nydia Velazquez when she was Chair of the House Small Business Committee.
California small businesses receive more of these contracts than any other state.
Scott Hauge
President
Small Business California
2311 Taraval Street
San Francisco, CA 94116
shauge@smallbusinesscalifornia.org
415-680-2188
Monday, May 16, 2011
May Budget Revise/ AB 153 Internet Tax
Governor Brown unveiled his May revised budget.
Please see below highlights. Note that Enterprise Zones will be continued but only for new jobs created.
The projected revenues are up $6.6 billion leaving a deficit of $9.6 billion and as the budget requires $1.2 reserve the money needed for the budget is $10.8 billion.
Redevelopment continues to be eliminated See below.
Small Business California supports Nancy Skinners ab 153 which would require out of state Internet companies to collect the sales tax. In conversation with Liz Mooney this morning in Ms. Skinner's office she advises that this is still on suspense and it is expected it will come out of suspense the end of May.
Scott Hauge
President
Small Business California
2311 Taraval Street
San Francisco, CA 94116
shauge@smallbusinesscalifornia.org
415-680-2188
*************************************************************
FOR IMMEDIATE RELEASE: Contact: Governor's Press Office
Monday, May 16, 2011 (916) 445-4571
Governor Brown Unveils Revised Budget
SACRAMENTO – Governor Edmund G. Brown, Jr. today unveiled a revised state budget that reduces by nearly $3 billion the amount of taxes needed to balance the budget, spurs job creation through new tax incentives and pays off most of the $34.7 billion debt built up over the last decade.
“California’s economy is growing, but we still face a $10 billion structural deficit and a wall of debt for years to come,” said Brown. “California’s finances were plunged into turmoil by the Great Recession and a decade of short-term fixes and fiscal gimmicks. This is not the time to delay or evade. This is the time to put our finances in order.”
The revised budget also downsizes state government and protects education and public safety. Since taking office in January, Brown and the legislature have cut spending by $9 billion and have taken other steps to reduce the deficit.
Key Highlights of Governor Brown’s May Revision Budget
Reduce the amount of taxes required to balance the budget. Californians will pay $2 billion less in income taxes this year than proposed in the January budget.
Increase spending on K-12 education. For years, the state has shortchanged public education in order to balance the budget, forcing school districts to borrow in order to balance their budgets. The revised budget increases funds for public schools by $3 billion. Even with this new infusion of funds, California schools are still owed billions by the state.
Spur job creation through tax incentives. The revised budget restricts Enterprise Zone credits to create new jobs only; spurs investments in California jobs through mandatory single sales; encourages manufacturing jobs through reduced sales tax on equipment purchases; and revamps a hiring tax credit to encourage additional job creation.
Create a long-term strategy to address California’s Wall of Debt. California has accrued $35 billion in budgetary debt by borrowing from future generations. The May Revision lays out a plan to pay off at least $29 billion in looming state debt by 2015.
Cut state government. The revised budget eliminates 43 boards, commissions, task forces, offices and departments that represent an inefficient use of taxpayer dollars. As services are returned to the local level, the Departments of Mental Health and Alcohol and Drug Programs will be eliminated. The revised budget also proposes to merge the Healthy Families Program into the Medi-Cal program, reducing costs and creating a single health care program for low income families
Improve debt management. More than $11 billion in cash from bond sales is sitting in department accounts, where it costs taxpayers more than $700 million a year in debt service for projects that have yet to be completed, creating an unacceptable burden on taxpayers. The revised budget proposes expediting projects, moving cash out of accounts and into projects that create jobs and improve state infrastructure as taxpayers intended.
Restore honesty to the budget process. Last year’s budget underfunded the costs of both the Department of Corrections and Rehabilitation and Department of Mental Health by $465 million. The revised budget addresses the shortfalls in these departments and establishes controls to prevent future overspending.
Sell underutilized state properties. The revised budget proposes the sale of state-owned properties like the Los Angeles Coliseum, the Montclair Golf Course in Oakland, the Capital Area Development Authority in Sacramento and the Ramirez Canyon property in Southern California. These properties serve no state function and should be sold off to pay debt.
The May Revision can be found here: http://www.ebudget.ca.gov/
###
Governor Jerry Brown
State Capitol Building
Sacramento, CA 95814
Please see below highlights. Note that Enterprise Zones will be continued but only for new jobs created.
The projected revenues are up $6.6 billion leaving a deficit of $9.6 billion and as the budget requires $1.2 reserve the money needed for the budget is $10.8 billion.
Redevelopment continues to be eliminated See below.
Small Business California supports Nancy Skinners ab 153 which would require out of state Internet companies to collect the sales tax. In conversation with Liz Mooney this morning in Ms. Skinner's office she advises that this is still on suspense and it is expected it will come out of suspense the end of May.
Scott Hauge
President
Small Business California
2311 Taraval Street
San Francisco, CA 94116
shauge@smallbusinesscalifornia.org
415-680-2188
*************************************************************
FOR IMMEDIATE RELEASE: Contact: Governor's Press Office
Monday, May 16, 2011 (916) 445-4571
Governor Brown Unveils Revised Budget
SACRAMENTO – Governor Edmund G. Brown, Jr. today unveiled a revised state budget that reduces by nearly $3 billion the amount of taxes needed to balance the budget, spurs job creation through new tax incentives and pays off most of the $34.7 billion debt built up over the last decade.
“California’s economy is growing, but we still face a $10 billion structural deficit and a wall of debt for years to come,” said Brown. “California’s finances were plunged into turmoil by the Great Recession and a decade of short-term fixes and fiscal gimmicks. This is not the time to delay or evade. This is the time to put our finances in order.”
The revised budget also downsizes state government and protects education and public safety. Since taking office in January, Brown and the legislature have cut spending by $9 billion and have taken other steps to reduce the deficit.
Key Highlights of Governor Brown’s May Revision Budget
Reduce the amount of taxes required to balance the budget. Californians will pay $2 billion less in income taxes this year than proposed in the January budget.
Increase spending on K-12 education. For years, the state has shortchanged public education in order to balance the budget, forcing school districts to borrow in order to balance their budgets. The revised budget increases funds for public schools by $3 billion. Even with this new infusion of funds, California schools are still owed billions by the state.
Spur job creation through tax incentives. The revised budget restricts Enterprise Zone credits to create new jobs only; spurs investments in California jobs through mandatory single sales; encourages manufacturing jobs through reduced sales tax on equipment purchases; and revamps a hiring tax credit to encourage additional job creation.
Create a long-term strategy to address California’s Wall of Debt. California has accrued $35 billion in budgetary debt by borrowing from future generations. The May Revision lays out a plan to pay off at least $29 billion in looming state debt by 2015.
Cut state government. The revised budget eliminates 43 boards, commissions, task forces, offices and departments that represent an inefficient use of taxpayer dollars. As services are returned to the local level, the Departments of Mental Health and Alcohol and Drug Programs will be eliminated. The revised budget also proposes to merge the Healthy Families Program into the Medi-Cal program, reducing costs and creating a single health care program for low income families
Improve debt management. More than $11 billion in cash from bond sales is sitting in department accounts, where it costs taxpayers more than $700 million a year in debt service for projects that have yet to be completed, creating an unacceptable burden on taxpayers. The revised budget proposes expediting projects, moving cash out of accounts and into projects that create jobs and improve state infrastructure as taxpayers intended.
Restore honesty to the budget process. Last year’s budget underfunded the costs of both the Department of Corrections and Rehabilitation and Department of Mental Health by $465 million. The revised budget addresses the shortfalls in these departments and establishes controls to prevent future overspending.
Sell underutilized state properties. The revised budget proposes the sale of state-owned properties like the Los Angeles Coliseum, the Montclair Golf Course in Oakland, the Capital Area Development Authority in Sacramento and the Ramirez Canyon property in Southern California. These properties serve no state function and should be sold off to pay debt.
The May Revision can be found here: http://www.ebudget.ca.gov/
###
Governor Jerry Brown
State Capitol Building
Sacramento, CA 95814
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