Culver City business owner Goran Eriksson is keeping a nervous eye on Sacramento these days.
Eriksson, who owns green technology consulting firm ESI Techtrans Inc., is especially concerned about a pair of bills that would extend sales taxes to some services and another bill that would allow employees in wage disputes to place liens on their employers’ property.
“Any sales taxes levied on my business would absolutely eat into my profits,” Eriksson said. “And as for the lien bill, I’m absolutely concerned that if I had a lien filed against me, it would make it nearly impossible to negotiate lines of credit.”
Those bills are among the 23 that the California Chamber of Commerce called out last week as “job killers” that could harm employers and further erode the state’s business climate. Each year, the chamber and an alliance of other statewide business groups mount a campaign to block such bills from becoming law.
“It’s imperative that legislators stop introducing and passing bills that cost jobs and erode the quality of life for all Californians,” said Allan Zaremberg, chief executive of the California chamber.
The chamber has had a good track record of defeating job-killer bills. Last year, it identified 30; five passed the Legislature but only one was signed into law. Since 2007, only four of 175 bills that the chamber identified as job killers have been signed into law. The rest were either blocked or amended to remove provisions the chamber found objectionable.
This year’s crop of job-killer bills also includes measures banning polystyrene food containers, indexing the minimum wage to inflation and preventing the state from contracting with companies that use many parts made outside the United States.
The chamber is further targeting a bill that would expand so-called “card check” votes for union organizing to hundreds of private employers now exempted. AB 1808, by Das Williams, D-Santa Barbara, would permit workers at government contractors and franchise holders, such as taxi companies or cable TV providers, to organize by having employees sign up for union representation instead of taking part in secret ballot.
Unions have been seeking to replace the secret ballot system, complaining that under federal rules employers are allowed to campaign against the union prior to the vote.
But the chamber’s focus is most heavily on taxes, and workplace mandates and wages.
Two of the bills – AB 1963 by Assemblywoman Alyson Huber, D-El Dorado Hills, and AB 2540 by Assemblyman Mike Gatto, D-Burbank – would extend state sales taxes to some businesses in the service sector.
Huber’s bill would impose a broad tax on services, while reducing the overall state sales tax rate for both retail products and services to 4 percent of the sales price. (Local additions to the sales tax would still come on top of this, including Los Angeles County’s half-cent tax for transit projects.)
Gatto’s bill would extend the current state sales tax to private jet services, yacht storage and other luxury services. In exchange, small-business owners would get a state income tax exemption for the first $10,000 of business income.
Chamber lobbyist Marc Burgat said that the bills would be a big hit on services because the sales tax would go straight from zero to as much as 10 percent. He added that businesses fear that once some services are taxed, it would be easier to extend the tax to other services.
For his part, Gatto said he was surprised his bill made the chamber’s job-killer list.
“This bill provides a $10,000 tax break for small businesses by taxing private jet services and yacht storage,” he said.
A spokesman for Huber said her bill is on hold and may undergo substantial changes in coming weeks.
Burgat said the chamber is most concerned about a bill that would allow employees in wage disputes to place liens on their employers’ property for the amount they believe owed. AB 2517, by Assemblyman Mike Eng, D-Monterey Park, would allow liens to be placed on an employer’s business property or personal property, much like contractors can place mechanic’s liens on property or business owners.
“This bill makes no reference to the wage dispute being adjudicated,” Burgat said. “So there’s no way to tell if the wage claims are legitimate.”
In an e-mail, Eng said that an employee would have to prove in court that he or she is owed wages before a lien is enforced.
“Legitimate businesses should be in support of this bill,” he said. “It helps prevent unfair competition from those who seek to gain a cost advantage by violating California’s labor laws.”
But Burgat said a provision in the bill that gives wage liens priority over all other liens could make lenders reluctant to loan money for the purchase of buildings or development of projects.
“It’s already difficult enough for small-business owners to get loans to buy their own buildings,” he said. “In the current lending environment, this would make it impossible.”
Eng said he was open to discussing his bill with the chamber to see if he could address the business group’s concerns.
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