Capitol Punishment: Keeping Track of Legislators’ Votes Guest Column By Gregory N. Lippe There’s an old saying “give a man a fish and he will have food for a day, teach him how to fish and he will have food for a lifetime.” Unfortunately the man who is starving is looking for instant gratification, he is not interested in a lesson, he wants the fish now! It is very tempting for the person who possesses the knowledge and the fish to become the instant hero and give the man the fish, instead of the training. This desire to become the instant hero and therefore win the votes from those in need has become the driving force for too many of our legislators. Instead of empowering people to take care of themselves, many bills have been introduced and passed that provide instant benefits, or gratification to workers. Sadly, the instant gratification carries a high cost, the elimination of these workers’ ability to provide for themselves and their families in the future. The cost of these benefits has become so great that it is driving employers either out of business or out of California. Without businesses, there can be no jobs. Without jobs, the instant gratification of benefits is gone and so is the ability of the workers to provide for their families. With workers seeking instant gratification and business owners seeking adequate earnings, there seems to be a belief in our society that what is good for business is bad for labor and vice versa. This is not true. When business thrives, unemployment is at a minimum and labor wins. When business fails or leaves, labor suffers. When expenses increase to a point where there is no ability to earn a profit, there is no incentive for the business owner to continue in business. In their quest for acceptable alternatives, a number of prudent business owners have chosen to relocate to other states. Meanwhile, many legislators continue to propose or vote for legislation that provides immediate benefits to labor while placing extreme burdens on business. These legislators are punishing both labor and business. Not only will many people eventually be jobless, the State will not be able to help. To provide help, the State needs revenues. A significant portion of those needed revenues are normally generated by taxes on businesses, the same businesses that are being driven out of California. Without businesses, the State will face bankruptcy. For evidence of this grizzly fact, one needs only to examine the recent decline in California’s credit rating. Once regarded as a pillar of financial strength with Triple-A rated bonds, the great State of California must now pay higher interest rates or issue bonds at a discount to attract investors. Excessive regulation Of course, legislation providing benefits to workers is not the only cause of businesses migrating from California. Other items high on the list include regulations making it difficult to obtain necessary business permits, the rapidly increasing cost of workers compensation insurance premiums, the lack of limits on litigation awards and periodic proposals for legislation authorizing higher taxes and government imposed fees. I believe that many of our citizens and voters are currently unaware of the numerous bills introduced into and passed by our state legislature annually that punish jobs and businesses. I also believe that, in addition to those who are unaware of the legislation, many more do not know which legislators are proposing and/or voting for these bills. The loss of jobs and businesses in our state is becoming a crisis situation. It is the duty and responsibility of our legislators to eliminate this crisis and strengthen our California economy. As citizens of our great State, it is our duty and responsibility to hold our legislators accountable. To accomplish this, we must be informed. Welcome to the first in a series of monthly reports on bills that punish jobs and businesses. Learn which California legislators from our own San Fernando Valley vote for and/or author them. Each month I will profile a few of the many bills proposed from 1999 through the current date that appear to qualify for inclusion in this category. The following are the bills I have chosen to profile this month: AB 60: Requires the payment of overtime at no less than 1 & #733; times the regular rate of pay for hours in excess of eight per day instead of hours in excess of 40 per week. Also requires overtime pay at no less than twice the regular rate for hours in excess of 12 hours per day. Results in increased cost to many employers. Status: Signed into law July 20, 1999 Valley legislators voting for bill: Assembly, Knox (author), Cardenas, Hertzberg, Kuehl, Scott, Wildman; Senate, Alarcon, Hayden, Polanco, Schiff SB 1661: Expands disability compensation coverage to include inability of an individual to work resulting from the sickness or injury of a family member (including a domestic partner) or the birth, adoption or foster care placement of a new child. Allows coverage to include providing psychological comfort and arranging “third party” care for a child, parent, spouse, or domestic partner, as well as providing or participating in medical care. Creates a heavy burden on employers, especially small businesses due to the potential of employees taking many more hours away from the workplace and the cost of training interim employees. Creates a monetary burden on employees since the disability compensation will be paid for by significant new taxes on employees. Status: Signed into law Sept. 25, 2002 Valley legislators voting for bill: Assembly, Cardenas, Frommer, Hertzberg, Koretz, Pavley; Senate, Kuehl (author), Alarcon, Scott AB 2816: Requires a temporary employment agency, employment referral service, labor contractor or other similar entity that supplies individuals to a licensed contractor for the performance of services for which the contractor’s license is required, to provide workers’ compensation insurance based on the modification rate of the licensed contractor, not the safety record of the employment company supplying the individual. The rate of the licensed contractor can be significantly higher than that of the employment company, and the bill allows the employment company to pass the additional costs through to the contractor. Status: Signed into law Sept. 29, 2002 Valley legislators voting for bill: Assembly, Cardenas, Frommer, Hertzberg, Koretz, Pavley, Strickland; Senate, Alarcon, Kuehl, Scott. AB 2509: Provides that local governments may use state funding to establish and enforce local employment-related rules, fines and penalties that are more stringent than those imposed by the state, thereby potentially increasing employers’ costs. Status: Signed into law Sept. 20, 2002 Valley legislators voting for bill: Assembly, Cardenas, Hertzberg, Koretz, Pavley; Senate, Alarcon, Kuehl, Scott AB 1156: Imposes binding arbitration thereby diminishing collective bargaining rights of specified agricultural employers. Potentially results in increased farm operation costs. Status: Signed into law Sept. 30, 2002 Valley legislators voting for bill: Assembly, Cardenas, Frommer, Hertzberg, Koretz, Pavley; Senate, Alarcon, Kuehl, Scott Information is power. Let’s use it wisely and effectively to retain California businesses and jobs. Gregory N. Lippe, CPA, is managing partner of the Woodland Hills-based CPA firm of Lever, Lippe, Hellie & Russell LLP (LLHR) and a director of the Valley Industry and Commerce Association (VICA).
