from Kevin Pedrotti, Legislative Advocate for Golden State Builders Exchanges
Governor Brown signed 13 bills that make $11.2 billion in cuts and shifts in state spending that were approved by the Legislature last week. Of the $11 billion in budget solutions, $8.2 billion reflect reduced expenditures. Signed were budget trailer bills approved the previous week, pending action while the Governor continued discussions with a key group of Republicans concerning the rest of the package.
One of the approved bills includes the re-enactment of the 2010 Fuel Tax Swap. With the approval of this measure, transportation programs will see dedicated tax revenues in place and with last year’s passage of Proposition 22, the vast majority of these revenue sources will be protected from future budget manipulations.
The approval of AB 105 means:
Transit- The changes in the diesel fuel taxes will take effect July, providing local transit agencies with $330 million in STA funding in the budget year and funding for Intercity Rail and other Caltrans programs;
Local Roads- the 44% share of the excise tax, consistent with what Proposition 42 would have provided will be available;
State Programs- The STIP and the SHOPP components will be funded;
Further, the CA Transportation Commission will be able to project with more certainty than in recent years the amounts of funding that will be available in the ongoing 2012 STIP development process.
Looking Ahead
The revenue elements of the Governor’s preferred budget resolution package (extension of temporary taxes - personal income, sales and VLF - enacted in 2009 and the multi-national tax basis change) together with his proposed elimination of Redevelopment funds remain to be addressed.
The Governor’s original goal was to wrap up action on all of the expenditure cuts and revenue proposals this week in time to meet the election law requirements for a statewide election on June 7; however, it appears that time may have run out of a June 7 ballot and leaders are looking at possibly June 14 for the election. Unless action is taken soon, the mid-June date for an election will not work either.
Negotiations for the necessary two Republican votes in each house to send the tax extension proposal to the ballot appear fleeting. Anticipating that approval of the revenue components to solve the $26 billion budget deficit may not garner enough votes in the Legislature, it appears that the Governor may be preparing to proceed with an initiative for November to enact the tax extensions and other items he still needs to balance the budget. This would require gaining the necessary signatures in a very short time frame and qualifying the measures in several months in order to permit the voters an opportunity to consider them on the November ballot. With speculation that a November ballot may occur, two groups have filed initiatives with the Attorney General that call for public pension reform and a hard cap on state spending.
If the legislature fails to adopt the revenue proposals in the coming days and the Governor elects to pursue the initiative approach, then the state will be confronted with a number of other challenges. In essence, in spite of the approval of the $11 billion in cuts and other solutions, the state will not have a balanced budget. This will make it difficult for the state to undertake the traditional cash flow borrowing it needs to in the summer of each year to better match the inflow of revenues with state spending. Additionally, the lack of cash flow capacity will likely mean that many vendors, etc. will see the return of IOU’s in lieu of direct cash payments.
Committee Approves GSBE Supported Legislation
A key Assembly policy committee passed AB 397 (Monning/Berryhill) which is sponsored by the CSLB. AB 397 requires an active contractor licensee with an exemption for workers' compensation insurance to recertify the exemption upon license renewal or provide proof of workers' compensation insurance coverage. There are currently no provisions for the active maintenance of workers' compensation exemption certifications. A license could have an exemption certification on file for years without needing to confirm that it is still an accurate representation of the licensee's status. In many cases, when a licensee is questioned about his/her employee status by CSLB, it turns out that the licensee does have employees and has a workers' compensation insurance policy, but has just not filed it with the CSLB.
Proposed Storm Water Regulations Costly to Business
GSBEhas been signed on to a coalition named WATER (Workable Approach to Environmental Regulation). WATER is a coalition of business, taxpayers, and local governments that supports cost-effective water quality policies.
Thousands of California school districts, local governments, recycling facilities, truckers, manufacturers and other businesses currently comply with an Industrial General Storm Water Permit that requires them to manage storm water runoff through best management practices (BMPs). The State Water Resources Control Board has proposed a revised storm water permit that would require that these public agencies and businesses comply with several new requirements that are above and beyond what the US Environmental Protection Agency (EPA) mandates and will result in hundreds of millions of dollars in additional costs with no proven environmental benefits. Some of the issues being raised include:
1. Arbitrary Numeric Limits Increase Costs Without Proven Water Quality Benefit
Requiring numeric limits will be very costly for schools, ports, cities, transit agencies, counties and employers. These costs could range from tens of thousands of dollars at small businesses and schools to hundreds of millions of dollars at large facilities owned by ports and industrial facilities. At a time when public agencies already are facing budget deficits, this permit would mean even further cuts to vital services. For the private sector, the added costs could mean the difference of hiring or retaining employees and expanding operations and business opportunities.
Furthermore, these arbitrary and costly numeric limits are would be imposed without any analysis about whether they are focused on the correct contaminants and whether the limits themselves will have any impact on water quality.
2. Unsound Regulation Invites Costly Lawsuits
By establishing arbitrary numeric limits, this permit will invite costly lawsuits to be filed against cities, counties, sanitation agencies, water treatment agencies and private companies. There won’t be a chance to discuss whether data really justifies enforcement, because there is strict liability, combined with mandatory penalties. Litigation costs will mean there is even less money for government agencies to spend on vital services, and companies will have less money to retain existing employees or hire new ones. By requiring sensitive information about the location of hazardous materials to be posted online, it could also be a security threat to California communities.
3. Duplicative Regulations Don’t Take Into Account Cumulative Impacts
The cumulative cost of regulations is already a burden for California businesses and public agencies which are still hurting from the economic recession. In fact, this permit would duplicate many existing regulations. It just doesn’t make sense to add the new and unnecessary cost from this new storm water permit when there are effective regulations already in place to address storm water controls. It will reduce funding for the essential services provided by school districts, cities and counties. It will impair the ability of companies to create new job, and hurt the ability to attract new employers.
4. Prohibits Cost-Effective Group Compliance
Existing regulations allow small businesses and local governments to pool their resources to conduct water quality monitoring as a group which makes it practical and more affordable for smaller companies. However, the new storm water regulation will outlaw this cost-effective system and force companies and agencies to spend millions more to comply.
Testimony will be heard at on the State Water Resources Control Board’s proposal for costly new storm water control measures that the coalition opposes on Tuesday, March 29.
To read the2011 Draft NPDES Industrial General Permit, click here.
If you haven’t already joined the WATER Coalition, please sign up by emailing info@WiseWaterRegs.com
-End-