from Kevin Pedrotti, Legislative Advocate for the Golden State Builders Exchanges
Budget and bills
The governor released his revised budget on May 14 providing the Legislature one month to pass a budget before forgoing their legislative salary. The budget closes a $15.7 billion shortfall by reducing expenditures $8.3 billion, increasing revenues $5.9 billion, and other accounting moves for an additional $2.5 billion. Few state programs would be spared some level of cuts. The Governor is proposing to link additional budget reductions with an “appeal to voters” to temporarily increase taxes. If the Governor’s tax initiative does not pass in November, $6 billion in additional cuts will go into effect on January 1. Included in the Governor’s May plan is a proposal to take $312 million in the new HUTA for General Fund relief which corresponds to the amount of the new gas tax collected on gasoline used for off-highway vehicles (OHV) since the enactment of the gas tax swap.
June 1 is the halfway point of the legislative session when bills introduced in one house must pass to the other. This deadline narrows the number of bills remaining for the legislative year.
Of significance thus far in the legislative year:
AB 1671 by Assembly Member Jarred Huffman, which extends the 2014 sunset of zero percent retention on all Caltrans' construction projects to 2020, is systematically moving through the legislative process. This measure is a follow-up to legislation passed in 2008 that set this policy in place.
Construction industry lead opposition to SB 1396 by Senator Bob Dutton has caused the author to drop the bill. The legislation proposed to cap the state excise tax on gasoline at 35.7 cents and limited sales tax to the first $4 per gallon of gasoline. It also capped diesel taxes at current levels. It was projected if passed, the legislation would have reduced transportation funding by $400 million.
We continue to work with Assembly Member Bonnie Rosenthal on amendments to AB 1514 which increases civil penalties for violations of excavations laws and authorizes the Public Utilities Commission to provide a copy of an investigation report to prosecutors following an excavation-related violation. Contractor issues of concern remain the monetary penalties for minor, non-willful infractions; maintaining jurisdiction of contractors by CSLB; and other clarification issues.
Unified construction industry opposition caused a key committee to hold AB 1941 by Assembly Member Fiona Ma. The original bill would have levied a 1.25% state tax on persons leasing or renting heavy equipment in lieu of the local personal property tax that is currently paid by the owner of the equipment. While Ma told the committee she intended to amend the bill as study of this issue by the Legislative Analysis, the committee still held the bill.
***