Business Groups Fret Over Costs Associated With New Legislation
By HOWARD FINE
Staff Reporter
A raft of bills is working its way through the state Legislature that opponents warn could add to the cost of doing business in California.
Among the measures that passed key legislative hurdles in the last few weeks: a new payroll tax for paid medical and family leave for employees, a bill indexing the minimum wage to the cost of inflation, and several bills aimed at limiting the use of mandatory arbitration.
“There seem to be more bills that are bad for business this year than in previous years,” said Fred Main, senior vice president of the California Chamber of Commerce.
With the exception of the family and medical paid leave bill, which received a special waver, all the bills cleared their house of origin by the May 31 deadline. They have to pass the other house of the Legislature by the end of August, when the session ends. After that, Gov. Gray Davis has all of September to either sign or veto the bills.
At the top of the list of bills targeted for defeat by pro-business lobbyists is SB 1661, by Senate president pro-tempore Sheila Kuehl, D-West Los Angeles, which establishes a new payroll tax to fund a new family and medical paid leave program. (Currently, employees in California can take unpaid family and medical leave of up to 120 days.) Opponents estimate that the measure would add $700 million in costs for employers and another $700 million in costs for employees.
However, the California Labor Federation, one of the chief sponsors, said the legislation is long overdue.
“This would be historic if California does what needs to be done for workers that need to take care of family members,” said Tom Rankin, president of the California Labor Federation.
Another bill, SB 1414 by Sen. Jackie Speier, D-San Mateo, would levy a new payroll tax on employers to fund health care programs for the uninsured.
“It’s bills like these that tie the hands of small businesses and limit their ability to grow,” said Martyn Hopper, president of the California chapter of the National Federation of Independent Business, which opposes the Speier bill.
Another bill, SB 1255 by Sen. President John Burton, D-San Francisco, increases the income tax on corporations and high-income brackets from 9.3 percent to 11 percent.
In a similar vein, SB 1662, by Sen. Steve Peace, D-El Cajon, calls for a reassessment of commercial property when a 50 percent ownership stake changes hands. (Commercial property is reassessed when a single transaction involving more than 50 percent of the ownership occurs.)
