from Kevin Pedrotti, Legislative Advocate for the Golden State Builders Exchanges
BUDGET
Discussions have ended for efforts to have a June election to extend the current “temporary” tax increases enacted almost two years ago. In summary, Governor Brown proposed reducing the $27B budget deficit by cutting state spending by $12B and seeking a 5 year extension of the temporary tax to make up the difference. To get the tax plan on the ballot requires a 2/3’rds vote of both houses of the legislature. To get the 2/3’rds vote margin requires 2 votes from republicans in each house. The Governor had entered negotiations with 5 republican senators with hopes of finding a way to garner the two votes. The republicans provided a list of demands which included spending caps, pension reform and regulatory reform. The discussions ground to halt with the Governor indicating the republicans had put too many issues on the table late in the game and republicans believing there were no protections for their issues into the future.
The Governor signed about $11B in cuts last week. The Governor has indicated he intends to explain to the residents of the state what an additional $15B in cuts will look like and continue to make the case for increased revenue. In the meantime, various groups are talking about initiatives either for higher taxes on high income earners, pension reform, etc.
It will be another long year.
UPCOMING LEGISLATION
A sample of bills of interest to GSBE to be considered this month:
AB 780 (Calderon) – Fixed Priced Contracts – Failure to include a provision in the 2009 tax increase to address fixed price contracts has resulted in contractors having to unfairly absorb the tax increase for the last year and half. AB 780 provides that, in the event of a future increase or decrease in the state sales tax, public works contracts must provide for an adjustment in a contract that was entered into prior to the tax change to compensate the contractor for the increase that was not factored into the contract and compensate the public agency in the event of an unanticipated decrease in the sales tax. Supported by GSBE.
AB 720 (Hall)– Road Commissioners - Amends Public Contract Code to prohibit a county who voluntarily elects to operate under the Uniform Construction Cost Account Act (Act) from being able to use “Road Commissioner” authority granted under another provision of the Public Contract Code. The bill will bring clarity to two conflicting provisions of the Public Contract Code.
The original intent of the “Road Commissioner” authority was to allow rural counties that were unable to get contractors to submit competitive bids in their area a method to get paving work completed. Today, many counties signatory to the Act have seriously abused this authority by doing millions of dollars worth of new road construction annually, without any accountability of cost. Although the counties argue that they need the “Road Commissioner” authority to address local issues such as natural disasters or emergencies, the fact is that there are mechanisms in place for counties signatory to the Act to do so without the “Road Commissioner” authority. The bill is sponsored by CIFAC and supported by GSBE.
AB 1330 (Furutani) –CTE - Would give students an option to take one course in visual or performing arts, foreign language, or career technical education (CTE), for purposes of fulfilling the high school graduation requirements. This bill is very beneficial to enhancing the decline of California’s career technical education programs. Supported by GSBE.
AB 397 (Monning/Berryhill ) – CSLB License Enforcement - Requires CSLB licensees with workers’ compensation exemption certifications on file to recertify at the time of license renewal the exemption status of the license or provide proof of a current and valid Certificate of Workers’ Compensation Insurance or Certification of Self-Insurance. It also allows for the retroactive renewal of licenses that neglect to make the required recertification at the time of renewal, under certain circumstances. The bill is sponsored by CSLB and supported by GSBE.
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