Wednesday, May 25, 2011

Sacramento Continues to Prosecute the War on California's Economy

We've been meaning to comment on this piece from Katy Grimes at Cal Watchdog, which describes a slew of bills the Assembly passed last week. All of these bills would make life even more miserable for private businesses in California, mostly through financial penalties and new mechanisms for enforcement by cash-starved state agencies.

First up is AB 22. If passed, this bill would prevent employers from using credit reports to screen job applicants. While most instances of shaky credit can be easily and innocently explained, there are people out there with mountains of debt resulting from a long history of bad financial decisions, and if you're hiring in areas like banking and accounting, you'll certainly want to know this. This is following by AB 325, which mandates bereavement leave; another mandate is just another reason for employers to think twice about hiring. And, of course, we have AB 551, which increases the penalties assessed to contractors and subcontractors who fail to pay the prevailing market wage on public works projects. In other words, it strengthens labor unions by adding a financial incentive to increased enforcement. Finally, there's AB 818, which requires the owners of apartment buildings with at least five units to provide recycling services and containers; this will either cause rents to rise or fewer apartments to be rented.

Next is AB 688, which would prohibit retailers from selling expired baby food, formula, or over-the-counter medicines. While you can debate the health benefits of this legislation, the real beneficiaries would be trial lawyers, who will have a glut of new opportunities to sue small pharmacies and markets. Then we have AB 246, which bolsters the state's ability to prosecute water polluters. Since water code violations are always hazily defined, the law may ultimately be used to broaden the definition of pollution, and will certainly be another boon to trial lawyers.

Not to be outdone, the California Chamber of Commerce released a list today of 28 Assembly and Senate bills it considers job-killers. AB 22 and AB 325 made this list, which is divided into five broad categories:
1. Costly Workplace Mandates. This group includes AB 22 as well as Darrell Steinberg's "card check" bill (SB 104), and includes an inflation-indexed minimum wage and new regulations on worker's comp and employer rights.
2. Economic Development Barriers. This includes Steinberg's SB 653 tax bill as well as a long, long list of other tax increases. It also includes AB 350, which would make it more difficult for contractors to fire employees, and a proposal to prohibit the use of cost-effectiveness criteria to evaluate alternatives to AB 32's cap and trade program.
3. Employee Benefit Mandates. This includes AB 325 and two other proposals to mandate benefits.
4. Expensive, Unnecessary Regulatory Burdens. This includes the health insurance rate regulation bill as well as proposals to ban polystyrene food containers, to mandate an unrealistic drop in petroleum fuel consumption, and to micromanage web-based businesses.
5. Inflated Liability Costs. This includes four bills that would disrupt the functioning of courts and expose technology companies to unlimited civil liability.
In other words, that's a nice economic recovery you've got there. Sure would be a shame if anything happened to it.


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