The business community’s campaign to suspend the state’s controversial greenhouse gas reduction law is in full swing. The signature-gathering deadline is this week for an initiative aimed for the November ballot.
Last week, the National Federation of Independent Business, which represents small businesses, joined the effort. However, the law’s supporters countered with a campaign that features businesses saying they will benefit from the tough standards.
The greenhouse gas reduction law, known as AB 32, passed in 2006 despite opposition from most of the state’s major business groups. Among other mandates, it requires such major emitters as oil refineries, and food-processing and cement plants to reduce their carbon or other greenhouse gas emissions by about 25 percent by 2020. It also authorizes a “cap-and-trade” program for greenhouse gas emissions.
The California Air Resources Board has already adopted a series of “early action” measures to implement the law, including reducing the use of certain refrigerants and instituting a low-carbon fuel standard. These first regulations will kick in starting in 2012.
Last fall, two Republican lawmakers – Assemblyman Dan Logue of Marysville and Rep. Tom McClintock of Granite Bay – along with Jon Coupal, the president of the Howard Jarvis Taxpayers Association, launched a campaign to place an initiative on the November ballot to suspend AB 32 as long as the state’s unemployment rate is above 5.5 percent. (It now stands at 12.5 percent.) They argue that AB 32 will result in the loss of thousands of jobs and force major manufacturing operations to leave the state.
The campaign has drawn nearly $1 million in contributions, chiefly from Texas oil companies Valero Energy Corp. and Tesoro Corp., and is widely expected to gather the required 434,000 signatures by the April 16 deadline to qualify for the November ballot.
In supporting suspension of the initiative, the NFIB joins the California Manufacturing and Technology Association.
NFIB/California Executive Director John Kabateck said AB 32 would drive up electricity rates for some small business by more than 50 percent, result in sharply higher fuel costs and force small businesses to lay off workers or even close their doors.
“If rule making and implementation go forward as planned, AB 32 will drive even more businesses, revenues and jobs out of California and make an economic recovery here much slower and harder,” Kabateck said.
In response, supporters of AB 32 have formed their own coalition and last week put forward a Signal Hill business owner who claims the law’s costs to most small businesses will be minimal and more than offset by job gains from the creation of new industries.
Tom Bowman, president of Bowman Consulting Group, which conducts exhibitions and multimedia communications for corporations, said he has installed energy-saving lighting and other technologies at his company that have sharply reduced his energy bills.
“Small companies like mine are proving that AB 32 is good for business, which is why thousands of entrepreneurs, small businesses and large employers oppose this proposition,” Bowman said.
A Field Poll released last week showed that 58 percent of registered voters supported AB 32; 69 percent said they believed the state could reduce greenhouse gases and grow the economy at the same time. However, the latter figure was down from 74 percent in 2008 and 83 percent in 2007.
Tax Deadline Looms
For retailers and thousands of other California businesses, this Thursday, April 15, is a red-letter day: It’s the deadline to register with the state Board of Equalization to report and pay use taxes.
These “use taxes” are owed on all items purchased without paying the sales tax, especially orders of products from out-of-state vendors. The tax rate is the same as the sales tax rate for the city in which the taxpayer is located.
The state estimates that more than $1 billion in use taxes is uncollected each year from residents and businesses. That extra money was eyed by the state Legislature last year when it passed a law requiring all entities generating at least $100,000 in gross receipts that were not registered with the Board of Equalization to register with the board and pay all use taxes on purchases made in 2009 or face stiff penalties.
The Board of Equalization has sent notices to more than 180,000 businesses across the state warning them of the impending deadline. After hearing from businesses about the difficulties of delving into records to calculate the use tax and coming up with the extra money to pay it, the board ordered staff in March to send follow-up letters telling business owners they could ask for an extension or relief from the penalties.
The board estimated that the current registration drive will bring in $81 million in additional revenues for the current fiscal year ending in June and $183 million for the 2010-11 fiscal year that will begin July 1.
For more information, log on to the Board of Equalization’s Web site at www.boe.ca.gov.
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