Small Businesses Offer Key Fiscal Support for Government

John Kabateck
President, Kabateck Strategies

The recent flurry of stories about small business woes often miss an important part of the picture: Small businesses’ role in helping fund government’s important responsibilities.

Consider the City of Placerville. Located in El Dorado County with the original colorful Gold Rush era monikers, the sometimes controversial Hangtown and the more staid Dry Diggings, the city is a tourist draw housing a number of buildings on the National Register of Historic Places. The City of Placerville itself is designated a California Historical Landmark.  Placerville has a population of more than 11,000. 

Many small businesses in the town contribute through their own good will to philanthropic activities, but the prominence of small businesses is truly seen in the resources funneled to the city treasury through taxes on its commercial activity that will have a huge impact on the city’s progress if small business recovery is long and tortuous. 

More than half of Placerville’s General Fund comes from sales tax revenue. Even with an auto dealership, chain stores and corporate businesses, the city’s small businesses powered the General Fund in 2018/19 with more than $1.2 million, which accounted for nearly 25% of the sales tax collected by the city.

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California Is the State with the Most Coronavirus Restrictions; Third Worst in Taxpayers Getting What They Pay For – WalletHub Studies

Fox and Hounds Daily Editors

(Editor’s Note: The following releases from WalletHub offers a look at state rankings with the fewest coronavirus restrictions to the most. The study found California has the most. A second study revealed Return on Investment on taxes. California was ranked third worse in this category.)

With some states pausing their reopening processes due to spikes in COVID-19, the personal-finance website WalletHub released updated rankings for the States with the Fewest Coronavirus Restrictions, as well as accompanying videos and audio files.

To identify which states have the fewest coronavirus restrictions, WalletHub compared the 50 states and the District of Columbia across 18 key metrics. Our data set ranges from whether the state has any penalties for non-compliance with COVID-19 legislation to whether the state has required face masks in public and health checks at restaurants. Below, you can see highlights from the report, along with a WalletHub Q&A.

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How the Virus Is Pushing America Toward a Better Future

Joel Kotkin
Editor of and Presidential fellow in urban futures at Chapman University

Pessimism is the mood of the day, with 80 percent of Americans saying the country is generally out of control. Even before civil unrest and pestilence, most Americans believed our country was in decline, Pew reported, with a shrinking middle class, increased indebtedness and growing polarization.

It’s a dark hour, but the United States has a way of coming back, after struggling with itself, stronger than ever. As it did in World War II and the Cold War, America retains enormous sokojikara, or “reserve power,” as Japan political scientist Fuji Kamiya described it decades ago.

That power can be harnessed now that “the era of peak globalization is over,” as John Gray succinctly put it in the New Statesman. The good news is that the pandemic has shattered the mythical global village, weakening both economic and political ties between countries, including within the European Union. The days of global kumbaya are gone, as more people recognize that “free trade” has benefited the already affluent in large part at the expense of most people. Now is the opportunity for America to rebuild a more resilient economy and society, one structured around the people here more than on global capital flows.

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Will Defund the Police Movement Revive Thoughts of LA Secession?

Joel Fox
Editor and Co-Publisher of Fox and Hounds Daily

An op-ed in the Los Angeles Times over the weekend by Jon Wiener looked back at the Los Angeles beach community of Venice attempting to secede from the City of Los Angeles 50 years ago over LAPD actions that secession organizers said terrorized the community. The article rekindled a thought I had when the movement to defund or abolish police gained traction in LA, a thought opposite the Venice experience. I wondered if parts of Los Angeles will revive efforts to secede from the city because residents feel moves to reduce an LAPD presence will endanger their safety. 

Wiener’s piece praises the so-called People’s Budget which is a vehicle to greatly dismember the LAPD. Not so long ago, one of the chief planks in the San Fernando Valley succession movement was lack of police protection in the Valley. If police resources are cut drastically, the San Fernando Valley secession movement could experience a revival of sorts. 

Enough signatures were gathered to qualify the secession for the 2002 ballot. Ultimately, the standard for a successful parting of the ways between the Valley and the City of Los Angeles required majority votes in both the San Fernando Valley and the City as a whole. While Valley residents supported secession with 50.7% of the vote, overall the measure was defeated citywide, 67% to 33%.

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Corruption in Government

T Keith Gurnee
Former councilmember of San Luis Obispo and a member of the Board of Directors of Livable California, a nonprofit organization dedicated to protecting the self-determination and the livability of California’s cities and counties.

The Los Angeles Times recently wrote a timely editorial about “Ending City Hall Corruption” in the city of Los Angeles. Written in response to the recent arrest of City Councilman Jose Huizar for taking payoffs from developers to get their projects approved, the Times stated that the city’s development review process “…just invites corruption.”

Their editorial was spot on, but if the Times thinks that Councilmember Huizar’s pay-to-play schemes were bad, what about what our state legislature is about to do in enacting a spate of state-mandated laws that would supplant LA’s local planning and development review procedures with new processes that would essentially be controlled by developers?

On July 13, 2020, California’s Senate and Assembly will return to session to act on a package of 9 top-down, one-size-fits-all housing bills that will snuff out the self-determination of local governments, cram high-density housing into established single-family neighborhoods, and bring about the over-gentrification and displacement of communities of color–all backed by the real estate development lobby and construction unions. 

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California Needs Fossil Fuels

Todd Royal
Todd Royal is an independent public policy consultant focusing on the geopolitical implications of energy based in Los Angeles, California.

With the world reeling from the COVID-19 pandemic, California, the U.S. and world is using more energy than ever, and growing, according to the British Petroleum (BP) Statistical Review of World Energy 2020 (SRWE2020).

What abundant energy and electricity offers is a way to grow California’s economy, and recover from the coronavirus simultaneously. Additionally, abundant energy and reliable electricity propound the ability to bring California out of its economic doldrums and begin to realistically assess the limitations of green energy and decarbonization.  

Only energy abundance can lower California’s emissions. While there has been a stabilization of emissions growth, particularly from the developing world since approximately 2005, CO2 emissions from China, India, Africa, and others such as Indonesia are increasing exponentially. The less developed a country, region, or continent the greater emissions and pollution rise unabated along with lower access to electricity. These duel factors of lowered human development and unreliable/zero electricity are devastating to environmental healthiness, and will eventually cause California to assess importing oil from Middle Eastern autocrats.

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Six Curious Takeaways from California’s Small Business Loans

Lauren Hepler
Lauren Hepler covers the economy for CalMatters, with a focus on jobs and business regulation.

Organic farms, the governor’s winery group, a scooter startup and … Burning Man? The new list of California recipients of federal Paycheck Protection Program loans to ease economic fallout from the coronavirus is long, varied and sometimes bizarre.

The Small Business Administration effort “to provide a direct incentive for small businesses to keep their workers on the payroll” was created in late March and expanded by Congress in May to a $669 billion initiative to curb skyrocketing unemployment. Loans are eligible for forgiveness if certain criteria are met.

On Monday, as the program re-opened for another round of applications open through Aug. 8, the Treasury department released a detailed breakdown of who got what in the first round of the PPP. There are lots of intriguing line items, but even before the new data dump, loans to public companies and large chains fueled controversy over preferential treatment for entities that stretch traditional notions of small businesses. (CalMatters also applied for and received a small-business loan, which you can read about here).

Though much of the list is composed of exactly the types of low-margin or heavily seasonal industries one might expect — agriculture, construction, hospitality, nonprofits — there are several notable trends. Here are six of the most interesting:

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California and the Need for “Order”

Joel Fox
Editor and Co-Publisher of Fox and Hounds Daily

In the current political environment, the phrase “law and order” has been entangled with the President Donald Trump’s campaign to clamp down on protestors and its implied racial overtones. But focusing on the second half of the equation, “order,” and what it represents, is becoming a problem for Governor Gavin Newsom and California authorities when it comes to dealing with destructive protests but also with coronavirus preventive protocols or illegal fireworks. 

Order needed to confront the coronavirus is disrupted by the many Californians who refuse to wear masks, congregate on state beaches and businesses that remain non-compliant under state restrictions.  Order is endangered with the overt disregard for prohibition of illegal fireworks during the July 4th holiday. 

For critics of the term “law and order,” they must understand that order is not merely a code word for preventing social change; it is also a goal to guard against dangerous situations like spread of disease and perilous wildfires. 

As the San Francisco Chronicle reported, the Bay Area was ablaze with hundreds of fires on the Fourth many started by fireworks, while in other areas of the state the repetitious sound of fireworks, mostly all illegal, had residents thinking they were in a combat zone. 

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Before Calexit, A Final Push to Fix America

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)

“Go to my website or use the hashtag #LetsGetTheCalOuttaHere!” shouts Gwyneth Paltrow in the Netflix series The Politician. Running for governor on a platform of leading California’s secession from the United States, Paltrow’s character wins 98 percent of the vote. 

This may be fiction, but California independence, is gaining cultural currency and real-world urgency. Our own real governor, Gavin Newsom, frequently describes California as a “nation-state,” to make the point that the Golden State must act like an independent country to protect itself during the biggest pandemic in a century. 

While conventional wisdom remains that California would never leave the union, who can put faith in conventional wisdom anymore? Polling suggests one-third of Californians support their state’s peaceful withdrawal from the nation. 

And there are relentless fights between the state and the White House over California’s attempts to protect its immigrants, women, healthcare, water, housing, environment, and elections

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Newsom now owns the COVID-19 pandemic

Dan Walters
Columnist, CALmatters

Just a few weeks ago, Gov. Gavin Newsom was boasting about California’s apparent success in suppressing COVID-19 infections in implicit contrast to other states, such as New York, that were being clobbered by the pandemic.

He called it “bending the curve” of the infection rate and decided to reopen vast sections of the economy that he had shuttered in March.

“We have to recognize you can’t be in a permanent state where people are locked away — for months and months and months and months on end — to see lives and livelihoods completely destroyed, without considering the health impact of those decisions as well,” Newsom rationalized.

In recent days, however, Newsom has reversed course, citing alarming increases in infection rates and deaths.

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