At times, even the best of us need to stand down, take a deep breath, and head back to the drawing board. That need to reassess happens in business when the market changes, in our jobs when the company downsizes, or in our lives when unexpected situations arise. We have unquestionably reached that point where the state needs to reassess the AB 32 Scoping Plan and find a solution that will balance the need to reduce greenhouse gas emissions with the ability of the state’s economic system to absorb the changes.

Perhaps the problem with the current process is that we are demanding
too much from the California’s Air Resources Board (CARB).  Rather than
asking an environmental regulatory agency to consider macro-economic
factors involving employment, industrial growth, and world trade, the
state should tap additional resources to weave together a plan that
will preserve our current jobs while we develop new technologies for
the future.

Almost every study on the CARB plan has revealed an economic impact,
but the controversy arises over two major areas.  First, there is
disagreement over the degree of impact – some studies find significant
economic ramifications while other reports show minimal effects on
consumers and business.  Second, the studies vary regarding the degree
to which costs will be offset by the benefits that may come with growth
of new technologies. 

It’s been a tough year for small businesses in California. But thanks to Insurance Commissioner Steve Poizner, 2010 could be a little brighter because the members of our small business organization are less likely to be saddled with increased workers’ compensation insurance costs of as much as 23 percent.

Poizner recently stood up to the Workers’ Compensation Insurance Rating Bureau (WCIRB), an insurance industry financed organization, by rejecting its call for a 22.8 percent rate increase in workers’ comp premiums. That would mean the costs of covering the hundreds of thousands of our member’s employees would jump almost 25 percent. And that’s just the average – some of our members could have seen rates jump much higher.

It’s no secret that higher operating costs means less job creation and could eventually lead to further layoffs, adding to the state’s already record-high unemployment rate.

The California Small Business Association was founded to provide small business with a meaningful and resounding voice in state and federal government. As advocates for growing small businesses and rebuilding our state’s economy, we know there is no better candidate for Governor than Steve Poizner.

Personally, I have been extremely impressed by Steve Poizner’s ability to solve problems and protect small businesses during his time as Insurance Commissioner. As Insurance Commissioner, Steve has cut fees generally paid by small business at the Department of Insurance by an average of 6% and on his watch, insurance fees have decreased by more than $2 billion. The members of the CSBA have benefited greatly from Steve’s actions and I have no doubt that California’s broader economy has also benefited from these cost cutting measures.

As small business owner myself, I know what it means to craft a budget, meet payroll, and create jobs. Those skills and experiences are something that stick with small business owners and that’s why the CSBA is thrilled to endorse the only former small business owner running for Governor.

Concerns of the cost on business under AB 32, the California Global Warming Solutions Act, were expressed by the Legislature in passing the law. Yet, the California Air Resources Board (CARB), which implements the measure, did not grasp this mandate.

The law specifically charges that the intent of AB 32 is to reduce greenhouse gases “in a manner that minimizes costs and maximizes benefits for the California economy.” Yet, when CARB issued it economic analysis of AB 32’s Scoping Plan, the document was severely criticized by outside academics and the Legislative Analyst’s Office. The reviewers claimed that the report missed key elements in allowing the legislature and the public to judge the true cost of the measure. One response to the CARB analysis was critical of how cost-effectiveness was considered.

Now is the time to pass the budget! If this budget deal fails the costs of the delay will be tremendous.

Each day that passes puts more small businesses in California in harms way and we can not afford to have any more close their doors! All of us know that the job creators have and always will be from small business. No doubt the loss of many small business owners is the critical reason for the high unemployment rate and the poor economic climate in California.

Every day we receive calls from small business owners worried about their employees and keeping their businesses running. One Woman Business Owner in San Diego has fifteen employees and since the State has shut down construction jobs she is at her wits end trying to figure out how to make sure her business survives and keeps her employees. In addition she feels a strong responsiblity to make sure the employee families have food on the table!

The small business community is calling on all parties to put your differences aside and give us a budget! Forget the blame or if you need someone to blame – you can blame small business. We need this resolved so we can get about the business of creating jobs and growing the economy.

As the Air Resources Board prepares to vote on its Scoping Plan for implementation of AB 32, there are many outstanding concerns from academics, business owners, and community members about the cost impacts that remain unaddressed. The costs associated with reducing greenhouse gas emissions are enormous – requiring billions of dollars in capital investments and annual operating cost increases – yet the Air Board is still focusing only on the potential benefits of the plan and not the certain challenges ahead.

According to Dan Walters (Sacramento Bee, December 10, 2008) the implementation of AB 32 “amounts to a huge wager, involving countless billions of public and private dollars, on an outcome that will only become apparent many years after Schwarzenegger has left the Capitol. And it’s coming amid what may be the worst economic recession since the Great Depression.”

Small businesses are joining the Legislative Analyst’s Office in asking for a more thorough review of cost-effective options before CARB locks in a major program that could have serious ramifications for our economy.

The LAO stated that under AB 32 “some businesses could lose money or go out of business.” With the national financial industry crisis and growing state fiscal problems, we need to do all that we can to help keep businesses in California, keep our workers employed, and grow our economy. Now is not the time to make it even harder to do business in California.

The California Air Resources Board is rapidly moving forward to develop its implementation plan for AB 32, but I’m afraid they’re not choosing the most cost-effective path. As a voice of the small business community, I am greatly concerned that CARB’s plan is going to pile more and more costs on small business.

With this tough economy, a financial industry crisis and a growing state fiscal problem, we need to make sure that the climate change program does not make the situation worse. There are too many layers of costs that we’re already struggling to meet, we can hardly afford to empty our wallets on the new efficiency measures and upfront investments that CARB is calling for us to make.

Small businesses drive our state’s economy, so we want CARB to recognize the importance of finding an implementation plan that helps us survive. Thus far, we have not had a seat at the table and our concerns go unanswered. If small businesses get suffocated along the way, our state in 2020 will have a low carbon footprint by driving business out of the state.

The small business community is being asked by all parties – the Governor’s Office, Speaker’s Office and Democratic and the Republican Legislators what our position is on the budget mess. I have had the opportunity to discuss this with small business owners from all over California and all seem to approach the problem the same way — how would we treat the budget problem the state faces with lessons we’ve learned as small business owners?

When a small business owner has more dollars going out than coming in we take the
following steps:

First, take very good care of our existing customers. We don’t want to make it harder for our customers to do business with us; in fact, we would prefer to make it easier. Don’t put burdensome regulations and higher prices on the conditions for doing business in California that might force businesses to go to another State for a better deal. Make sure that taxpaying businesses are treated respectfully. For example, don’t have a small business person hang on the phone to a state agency for more than an hour to get an answer from a government official that the business person needs to operate the business.