New IRS Paperwork Requirement Must Be Repealed

Last week President Barack Obama emphasized once again the importance
of doing everything possible to aid small businesses in jump-starting
the U.S. economy. We agree, and that is why we are speaking out about a
very disturbing part of the Health Care Reform Bill that has nothing to
do with health care and everything to do with small business. It is
Section 9006, which would place an unprecedented burden on small
business reporting and paper work requirements.

This provision would require any business that purchases more than $600
of goods or services from another business to submit a 1099 tax form to
the Internal Revenue Service. The mandate, which is to take effect in
2012, was included to help pay for the health care bill and was
estimated to raise $17 billion.

At a time when President Obama and everyone else agrees that our
economy needs small businesses to help our country grow out of this
recession, saddling them with expensive new paperwork requirements only
further hampers their ability to succeed and ultimately aid in our
economic recovery. H.R. 5141 and S. 3578, the "Small Business Paperwork
Mandate Elimination Act" would repeal this section of the "Patient
Protection and Affordable Care Act."

The Seeds of Education Reform Are Growing This Fall

This time of year, education takes center stage as students of all ages
return to school. Yet this is not an ordinary fall.

Higher education in
California has reduced the number of classes being offered and the
number of students being admitted due to budget cuts; and K-12 public
education is facing more students in many classrooms due to the same
budget cuts. Here in Los Angeles and across the nation, teacher
evaluations have attracted the spotlight due to President Obama’s "Race
to the Top" and a series of articles by the Los Angeles Times.

Last Friday, the president of the University of California, the
chancellor of California State University and the chancellor of the
California Community College System were at the Chamber to discuss the
state of higher education in California on the 50th anniversary of our Master Plan for Higher Education.
All three leaders emphasized the changes that budget cuts have caused
at their institutions; and at the same time they voiced appreciation
for the confidence that the public has in California’s system of higher
education, and a continued commitment to maintaining quality and
meeting the needs of as many California students as possible.

Downtown Excitement Benefits Us All

When 30,000 people crowded downtown Los Angeles last week for the monthly Downtown Los Angeles Art Walk,
Angelenos from all walks of life confirmed that downtown Los Angeles’
renaissance is now.

This coming weekend, we have another opportunity to
welcome visitors downtown, this time from all over the nation. The
American Society of Association Executives (ASAE) will be in Los Angeles for its annual convention.
This highly sought-after group represents thousands of associations
that we would like to host in Los Angeles in future years.
Congratulations to LA INC., The Los Angeles Convention and Visitors
Bureau for bringing ASAE to Los Angeles.

Ever since STAPLES Center launched downtown’s revitalization in the
late 1990s, the area hasn’t looked back. Dozens of decaying historic
buildings have been transformed into beautiful art deco apartments, and
a host of new condo and apartment buildings have followed suit. The
restaurant scene has grown from a small number of eateries that
attracted the Monday-to-Friday business crowd to one of the nation’s
most important culinary destinations. Downtown is now an entertainment
destination seven days a week.

Job Creation Takes Priority in Los Angeles

The
business community often complains about L.A. City Hall’s lack of
action to make Los Angeles more business friendly for job creators.
This week, I am pleased to extend congratulations    to City officials
for their recent actions on five of the L.A. Area Chamber’s top
business and budget priorities.

On the jobs front, Mayor Antonio Villaraigosa and the City Council
approved a three-year tax holiday for all new businesses that open in
Los Angeles over the next 36 months. This incentive is especially
important for startups and small businesses, and could create more than
55,000 new jobs, according to a recent report by the USC Marshall School of Business.

At the same meeting, the Council approved a taxpayer’s bill of rights,
and voted to move forward with an independent economic analysis of
comprehensive business tax reforms. The reforms to be studied include a
60 percent reduction in the City’s gross receipts tax for businesses in
the highest tax category.    The recommendations originated with the
volunteer Business Tax Advisory Committee appointed by Mayor
Villaraigosa and the City Council last year.

L.A City Council Should Embrace Reform To Reduce Budget Deficit

On
Tuesday, Aug. 3, the Los Angeles City Council will discuss two items
that cut to the heart of the City’s ongoing budget crisis – ballooning
public pension obligations and the chronic inability of the City of Los
Angeles to collect outstanding debt.

Action or inaction on these two
issues will let voters know whether Councilmembers are committed to
major changes that will put the City on the right track toward solving
what has become an annual and perpetual budget crisis.

The Council will
discuss next steps on public pension reform. Pension contributions by
the City of Los Angeles to the three city employee pension funds are
growing by more than $300 million per year, with no end in sight. By
2014, the contributions will amount to more than 25 percent of the
general fund.

Two Steps Forward for the City of Los Angeles

At
a time when local government must reinvent its approach to job
creation, the City of Los Angeles made two major strides last week. The
L.A. City Council unanimously approved the L.A. Area Chamber’s proposed Office of Economic Analysis and also endorsed the L.A. County Strategic Plan for Economic Development. Both are important opportunities to make good policies that incentivize business growth in our City.

The Office of
Economic Analysis will finally give City officials the information they
need to evaluate whether a proposed policy will drive businesses away
or encourage them to invest even more in Los Angeles. Under the new
program, the City will contract with respected, independent economists
to study how proposed legislation would affect the business climate,
job creation and overall economy.

Championed by City
Council President Eric Garcetti and Councilmember Greig Smith, the City
approved $250,000 in initial funding and will begin compiling a bullpen
of respected economists to contract with on an as-needed basis. The
Chamber’s ultimate goal is to make this office a permanent part of our
city government to provide this type of evaluation on a wide-range of
city policies and programs. In the meantime, the Chamber will be
working with City Council members to make sure that policies deserving
of this review are studied.

It’s Time to Turn Lemons into Lemonade in Sacramento

Summer reruns used
to be limited to network television. Now, they’ve taken over California
politics. The Legislature’s decision to leave Sacramento without a
budget deal and Gov. Arnold Schwarzenegger’s minimum wage declaration
for state employees are both reruns of political battles past. If there
was ever a time for thinking – and acting – differently, it’s now.

With approval ratings at their lowest point in years, many of us hoped
that this year would be different. Certainly, politics as usual is no
longer working. The State still suffers from a chronic budget deficit
and when you add the state pension crisis to the conversation, you have
a scenario that is threatening California’s future even after the
economy improves.

The tax reform commission’s recommendations to reduce
revenue volatility have been shelved without any real evaluation. And
the vast majority of Republican and Democratic lawmakers remain stuck
in their partisan corners, with each side exasperated with the other.

Tax Holiday is the Start of Real Business Tax Reform in Los Angeles

The
City of Los Angeles’ gross receipts tax is a major obstacle to
attracting and retaining job creators in the City.

That’s why the
proposal by Mayor Antonio Villaraigosa and motion by the City Council
to provide a three-year tax holiday for new businesses is an important
step in the right direction. It also dramatically reinforces the need
for comprehensive tax reform to encourage all of our existing
businesses to retain and grow new jobs in Los Angeles.

Los Angeles has
the distinction of having the highest gross receipts tax rate of all 88
cities in L.A. County and one of the highest of any major city in the
United States. In our information-driven economy where customers are as
likely to be overseas or across the country as they are to be next
door, many businesses are very flexible about where they locate their
offices.

City Hall Needs to Hear From You

Three
months ago, the City of Los Angeles teetered on the edge of insolvency.
City leaders appeared unable to eliminate the $500 million budget
deficit and lead Los Angeles out of its budget morass. Since then,
Mayor Antonio Villaraigosa and the City Council made the tough
decisions that will prevent another near-term fiscal crisis.

However, City Council members have come under increasing pressure to
back down from making many of the tough cuts. Now it’s time for the
business community to speak up in support of their efforts and help
keep Los Angeles on the right financial track.

The recent budget deal demonstrated that Mayor Villaraigosa and the
majority of the City Council are serious about facing down our deficit.
With the help of Chief Administrative Officer Miguel Santana and City
Controller Wendy Greuel, City officials cut $500 million in spending.
More than three-quarters of this amount represents long-term annual
savings.

California Must Continue to Learn From John Wooden

California
lost one of its greatest leaders and role models last Friday with the
passing of legendary UCLA basketball Coach John Wooden. I am dedicating
today’s The Business Perspective to Coach Wooden because his
leadership principles – on which he based his life and coaching career
– are what business, government, labor and environmental groups need to
learn if we are to re-energize the California Dream and win as a team
for our State.

In the midst of a week of news stories about continued unemployment, a
crashing stock market, terrorism and conflict around the globe, and the
largest oil disaster in the history of the planet, a giant of a man
died quietly surrounded by family after being visited by so many
friends and those he mentored at the Ronald Reagan UCLA Medical Center,
a short walk from where he made sports history. 

Coach Wooden was an icon in college sports, but he could very well have
been a great businessman, college president, mayor or legislative
leader because he understood that all great organizations are the
result of exceptional team efforts by those who share a common goal.