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Saturday, May 28, 2022

It Could Have Been A Lot Worse

This year brought major victories for some California industries, while others plan to bid the Golden State adieu. Business ultimately won out when it came to the legislative session – two-thirds of bills went in business’ favor. However, some local actions have left companies reeling, or worried for the future. Let’s start with the good. Among our region’s most newsworthy victories is the California Film & Television Tax Credit, which was tripled for the next five years. The expansion will result in billions of dollars in direct spending in the state, and reinforce our reputation as a top choice for film producers. The Valley Industry & Commerce Association, or VICA, also defeated a bill that would have placed unnecessary regulations on adult film production in California, which is already leaving the state at an alarming rate due to new local laws – taking billions of dollars in revenues with it. A decades-long ban on above-ground rail installation in the Valley was repealed with the help of VICA’s advocacy. This prompted a Metro feasibility study of the Valley’s Orange Line, which includes improvements and the possibility of a conversion of the busway to light rail. The Orange Line has far exceeded Metro’s original expectations in terms of ridership, and VICA has made its conversion to light rail a top priority. VICA triumphed in its longtime efforts to bring customs clearance and inspection services back to Van Nuys Airport, which lost its customs agents in 2006. International flights can now fly directly to Van Nuys Airport without having to stop at other local airports, such as Los Angeles International Airport, to go through customs. The year saw the introduction of innumerable bills dealing with all aspects of labor. A bill that would have increased the state minimum wage to $13 by 2017 was defeated. VICA helped to halt legislation that would have allowed employees to hold an employer’s or third party’s property hostage in the event of an alleged, yet-unproven wage violation. With the federal Affordable Care Act in full swing, trial lawyers naturally jumped at the chance to get premium-raising, lawsuit-generating measures on the Nov. 4 ballot. Proposition 45, which would have given an elected official – who can take campaign contributions from special interests – the power to deny small business’ health care rate changes, was defeated. Also defeated, Proposition 46 would have raised the cap on non-economic damages in medical malpractice lawsuits from $250,000 to $1 million, encouraging lawsuits and only benefiting those who collect legal fees. Both measures would have raised premiums, increased bureaucracy and further burdened our already-overwhelmed court system. The City of Los Angeles is notorious for its labyrinthine building codes and overregulated development. When the city launched its re:code LA Zoning Advisory Committee to begin serious reforms, VICA helped to get its members who are experts in land use appointed to the committee. Additionally, small lot subdivisions, large campus development and transit-oriented development saw an easing in regulation and an increase in incentives locally and statewide. In the last two decades, California has lost hundreds of thousands of aerospace and defense-related jobs. Los Angeles alone experienced a two-thirds loss of jobs in the industry. A tax credit for strategic aircraft programs was passed in 2014 in an effort to maintain and create new jobs in the aerospace industry. VICA’s decades-long efforts to eliminate the business tax in Los Angeles were rewarded when Mayor Eric Garcetti included the first step of a phase-out in the city’s budget. The tax is a major inhibitor when it comes to companies looking to locate in Los Angeles. Now, the bad. The L.A. City Council passed a citywide minimum wage increase for hotel workers to $15.37 an hour. The Council is also entertaining a proposal to raise its minimum wage to $13.25 an hour by 2017 – or higher – for all workers in Los Angeles, with yearly increases thereafter. Both increases will result in a staggering loss of jobs – a hit the city can’t afford. Some bills that earned Gov. Jerry Brown’s signature were just plain foolish. Those include a “list of shame,” compiled annually of companies who employ people who receive public assistance benefits, a requirement of employers to provide paid sick leave to employees who work as little as 30 days per year, and a law that makes employers responsible for their third-party contractors’ wage and hour violations. Even after a mostly successful year, VICA and businesses are in for a challenging 2015. VICA hopes to continue to see business and community leaders coming together and working toward a more business-friendly tomorrow. The Valley Industry and Commerce Association (VICA) is a business advocacy organization based in Sherman Oaks that represents employers throughout the Los Angeles County region at the local, state and federal levels of government.

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