Support Fair Rules for Franchised Small Businesses

Scott Hauge
President, Small Business California

What are the biggest obstacles facing small businesses? Contrary to conventional wisdom, it isn’t always government. In fact, for many small businesses in California, the main source of bureaucracy, red tape, interference, fine-print traps, and threats to financial stability is a big corporation, not the government.

Tens of thousands of California entrepreneurs have invested in franchised businesses like McDonald’s, 7-Eleven, and Subway because the franchisor corporations promise that ownership in a brand outlet offers technical assistance and the relative safety of a known brand; instead, too many find that they are entering a fundamentally unequal and imbalanced corporate relationship that puts their life work and life savings at risk. As a result, small businesses that are franchisees – which represent 80,000 businesses and one million jobs in California, are having a harder and harder time keeping their businesses afloat.

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Big Win for the President

Junior Romero
CA Associate Representative with Sierra Club National

The Senate voted 60-38 in favor of sending Trade Promotion Authority (Fast Track) to President Obama Wednesday, with Senator Feinstein voting for, and Senator Boxer against. This legislation allows for up-or-down votes on trade treaties submitted to Congress for the next six years, without the ability to add amendments. A week ago, Fast Track’s chances looked dim, failing a procedural vote in the House by strong Democratic opposition of a combined track package; Democratic Minority Leader Nancy Pelosi urging her colleagues to “slow down the fast track”. A separate Fast Track bill was later passed by the House, this time without Trade Adjustment Assistance, funding for programs designed to retrain American workers who lose their jobs due to trade.

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Right & Left Squeeze Tax Reform Idea

Joel Fox
Editor of Fox & Hounds and President of the Small Business Action Committee

Like a vice pressuring from both sides, interests on the political right and left are trying to crush the idea of reforming the California tax code by taxing services. That makes the prospects for success daunting. Sen. Bob Hertzberg, who is leading the effort, should at least be given credit for recognizing that California is doomed to ride the revenue roller coaster under the current tax system. Spending that happily anticipates never ending good budget years accelerates that wild roller coaster ride – something the legislative majority is wont to do.

The Los Angeles Times appears to be cheering for tax reform in the manner in which Hertzberg’s SB 8 is considering – that is fashioning a tax code that more closely reflects the current California economy and its reliance on services.

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Californians Have No Idea How Important Public Universities Are

Joe Mathews
Connecting California Columnist and Editor, Zócalo Public Square, Fellow at the Center for Social Cohesion at Arizona State University and co-author of California Crackup: How Reform Broke the Golden State and How We Can Fix It (UC Press, 2010)

Californians, I regret to inform you that your diploma is being held up. You won’t be able to graduate.

You flunked higher education.

Another state budget, accompanied by an eight-month-long controversy over the University of California, demonstrated once again that we Californians don’t have a clue about what our public universities mean to the state. Because if we did, we wouldn’t make them beg us for the money needed to educate more of our children.

Instead, Californians—from our leaders in Sacramento to average voters—think that the UC and California State University systems are too costly and administratively bloated. That tuition is being raised to cover academic nonsense. And that taxpayers already give too much money to higher education. These claims are either nonsense—or the fault of Californians themselves, not the universities.

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The Construction Jobs Rebound in California

Michael Bernick
Former California Employment Development Department Director & Milken Institute Fellow

In last Friday’s California jobs report by far the greatest percentage job growth was in the Construction sector.  Construction employment gained 6100 jobs over the month and 36,600 jobs over the year—a 6.9% employment gain, considerably higher than the other 11 employment sectors.


Let’s bring in Mr. Brandon Hooker, labor market analyst for EDD’s Labor Market Information Division (LMID)  to explain. The chart above (click to enlarge) prepared by Mr. Hooker shows the fall and rise of construction employment since January 2007. At the beginning of 2007, California had 915,000 construction jobs. Projections had construction employment growing rapidly to over one million jobs in the next few years.

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Budget Signed But … Will Legislature Upset Fiscal Balance?

Rob Lapsley
President, California Business Roundtable

The budget continues Governor Brown’s policy of fiscal restraint. While the General Fund expenditures increased by nearly $8 billion dollars over last year’s Budget Act, the Governor has ensured the state starts preparing for future economic downturns with a $6 billion reserve.

The revenues show that California’s economy is improving, but growth still remains limited primarily to some of our coastal communities.  The Bay Area—representing only 19 percent of the state’s population—accounts for 52 percent of the net employment growth since 2007 and in the most current year’s data available, 39 percent of all personal income tax revenue.  We are a state with an economy and a budget still too precariously balanced on the continued well-being of one region and to a large extent one industry in that region.

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Court Support of AG on Initiative is Understandable

Joel Fox
Editor of Fox & Hounds and President of the Small Business Action Committee

No one should overreact in defense of the initiative process to the court decision allowing the Attorney General to throw out an initiative that is reprehensible and clearly unconstitutional, but we must be sure that the decision is not a step in expanding the power of any official to determine if an initiative is or is not constitutional.

The Sodomite Suppression Act is abominable and it is understandable that Attorney General Kamala Harris wants no part of it. But the initiative process finds itself more and more entangled with politicians’ decisions to perform official acts if the official thinks a proposed or successfully passed measure is unconstitutional. Since the initiative is a tool for the people to bypass politicians this situation is concerning.

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With Court Decision to Block Gay Murder Initiative, Its Time to Kill Initiative Fee Hike

Joe Mathews
Connecting California Columnist and Editor, Zócalo Public Square, Fellow at the Center for Social Cohesion at Arizona State University and co-author of California Crackup: How Reform Broke the Golden State and How We Can Fix It (UC Press, 2010)

There’s good news from the courts about the initiative process. Will that good news stop bad news in the legislature?

To that good news: a judge effectively stood up for reason when it comes to ballot initiatives, ruling that that Attorney General Kamala Harris did not have to circulate a measure requiring the murder of gay people. Because Californians are nuts when it comes to ballot initiatives, many had criticized Harris for asking the court to allow her not to circulate the measure, and the judge agreed, pointing out that it was “patently unconstitutional.”

Let’s hope this decision stands as a basic test of sorts to block clearly unconstitutional measures that violate our human rights. A proper initiative process needs such exemptions, as I’ve argued in this space previously.

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The Cities Winning The Battle For Information Jobs 2015

Joel Kotkin, Editor of and Presidential fellow in urban futures at Chapman University, and Michael Shires, Associate Professor of Public Policy, Pepperdine University

We are supposed to be moving rapidly into the “information era,” but the future, as science fiction author William Gibson suggested, is not “evenly distributed.” For most of the U.S., the boomlet in software, Internet publishing, search and other “disruptive” cyber companies has hardly been a windfall in terms of employment. As jobs in those areas have been created, employment has shriveled in old media like newspaper, magazine and book publishing (these industries lost a net 172,000 jobs from 2009 through 2014). In the 52 largest metropolitan areas that we studied, information employment declined for roughly half from 2009 through 2014. Overall, in information industries (a sprawling sector that also includes movie and TV production, radio and another big job loser, telecom) employment has shrunken 4.2% since 2009 to 2.7 million jobs, while total nonfarm employment in the U.S. grew by 5.1%.

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California Still Has Massive Obligations

Charles Crumpley
Editor of the Los Angeles Business Journal

There’s been a great deal of political puffery lately about how the Golden State’s finances have improved. The state government keeps getting described as “flush with cash.” You’d think Sacramento was suddenly beset with gorillas, what with all the chests being thumped.

And that set off a predictable dustup last week over how to spend all this found money. Lawmakers approved a $117.5 billion general-fund budget, but Gov. Jerry Brown declared that a profligate impulse and wants to spend $2.2 billion less.

However, a couple weeks earlier, a report came out that serves as a good reminder of the still-alarming big picture for the state.

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