Sen. Dennis Hollingsworth’s Corner

Measure the State Budget by Sustainability

By Senate Republican Leader Dennis Hollingsworth

As seen in the FlashReport

Sustainability should be the benchmark taxpayers use to measure state budget proposals. It’s obvious that past state budgets have postponed real solutions, proved unsustainable, and led to the current budget mess.

This year legislators face another budget crisis and another round of budget proposals. The difference between the budgets Republicans and Democrats are offering is simple: the Republican budget is sustainable; the Democrat budget is not.

The Democrats’ budget depends on plans to raise taxes by $4.5 billion. That act alone will take money away from consumers, drive more employers out of California — or simply out of business, and continue the fiscal death spiral that grips the state. Democrats want these new taxes to pay for $3 billion in welfare programs that California can no longer afford. There’s a certain consistency in their thinking. Democrats know their policies will result in more Californians losing jobs and turning to government assistance, so they want to “help” the taxpayers they’ve pushed over the edge.

Their tax measures offer more unsustainable ideas. They propose to convert “temporary” taxes to permanent taxes–even though voters rejected those taxes by a two-to-one margin last year. They propose raising income taxes on most people earning $20,000 to $200,000 a year at a time when the middle class is already straining to make ends meet. They propose to raise taxes on employers and delay business incentives, when jobs are already leaving the state.

The incontestable truth is that government cannot spend its way to prosperity. Every dollar the government spends is a dollar that was first taken out of the economy in the form of taxes. Last year, personal income in California dropped by $40 billion. Increasing taxes now will only accelerate that decline. Unemployment has reached heights not seen since the 1940s. With less money to spend, most people are cutting back wherever they can—reducing economic activity and tax revenues yet again.

The Democrats’ tax-hike budget will further corrode California’s economy, and that’s simply not sustainable.

Republicans propose to pare the state budget back to a sustainable level by cutting unaffordable programs while maintaining education funding at last year’s levels. The Republican budget avoids new taxes, leaving those hard-won dollars to be spent by the consumers and businesses that earned them.

Protecting middle-class wage earners, shunning job-killing taxes, and delivering promised incentives to private sector employers are vital steps in a sustainable plan to restore prosperity and encourage job creation. Restraining spending is another, equally important step, needed to break the cycle of tax-and-spend government growth. Republicans aim to bring government spending into line with existing state revenues, just like ordinary Californians must do every month to sustain their household budgets.

Residents of the Golden State are waiting to see whether legislators will choose another tax-and-spend budget that can’t be sustained, or whether they will arrive at a sustainable budget that matches government spending to income and protects hard-working taxpayers. Given the heavily weighted Democrat majority, the Legislature is unlikely to adopt a strong, sustainable budget. Unless Democrats adopt the Republican budget proposal—the only sustainable budget plan—our state will base its economic future once again on Democrat schemes and dreams, not reality.

Sen Hollingsworth Summarizes Closing Session of Legislature

In Case You Missed It…
Bloviating rather than budgeting

As seen in CalWatchdog

Speeches, speeches and more speeches, took precedence over cries for “jobs, jobs, jobs,” at the Capitol Tuesday. Posturing, arguing, grandstanding, partisanship and passion were on tap in the Assembly and Senate as legislators debated budget bills, leading many to comment that the impassioned speeches should have taken place months ago.

Dramatic fundamental differences were evident during the debate over budget proposals, with the philosophical debate between continuing government expansion, and the need to cut government spending and taxes.

What also became evident between the parties was a differing opinion over the definition of middle class jobs. Democrats named public employees and police, fire fighters and teachers, as the holders of middle class jobs, and Republicans referenced private sector jobs, and specifically, the loss of manufacturing jobs in the state.

Senate Leader Dennis Hollingsworth, R-Murrieta, opened the Senate debate, and said that the Republican budget proposal was “reflective of the reality in today’s economy.” Hollingsworth explained that after $12.5 billion in tax increases last year, the Republican budget was designed to force the state to live within its means, now reduced to $84 billion. “What family isn’t making due with less?” asked Hollingsworth. “Yes, it’s a tough budget. Yes, it’s tough spending less, but it’s all we have.”

Hollingsworth said that the state was still going to be spending $48.5 billion on education, and needed to cut $3.5 billion out of Cal WORKS, and state paid child care.

Critical of the inaction by legislators on the budget, Hollingsworth said that if legislators had taken up the budget last February, the state would be $3 billion less in debt. “The Republican budget brings spending in line with reality.”

…And so it continued for hours – Republicans on a cut-government-and-taxes side of the argument, with Democrats appearing to promise to keep government static and save government jobs.


To read entire article go here:

Our Democratic Legislators Just Don’t Get it.

Hollingsworth Links Democrats’ Budget Delays to California’s Lingering Recession

SACRAMENTO – Senate Republican Leader Dennis Hollingsworth (R – Murrieta), talks about how Democrats’ insistence that tax increases be part of the budget deal is discouraging job growth, and prolonging the recession in this week’s Senate Republican Radio Address.

Links to audio versions of the address, and a transcript, are included below:

English Version:
Spanish Version:


Yet another week has gone by without passing a balanced budget for California. That’s because rather than reducing spending to match what we have, the Legislature’s Democrat majority insists on including billions of dollars of job killing tax increases to close the state budget gap.

Now, just 18 months ago Californians were saddled with the largest tax increase in history. As republicans predicted, that huge tax increase stifled economic growth and resulted in further job layoffs in private businesses.

And the economic news keeps getting worse. A survey this week from the National Federation of Independent Business shows small business owners aren’t planning to hire new employees or buy new equipment because of the threat of further taxes and more government regulation. Now, how could even higher taxes possibly be a good idea for a budget plan?

Small businesses are California’s economic engine and should be driving the economic recovery.

Instead, because Democrats insist on job-killing tax increases, California’s unemployment rate is nearly 30 percent higher than the national average.

The right state budget must reduce spending, be balanced with no new taxes, and most important of all, it must encourage private-sector job creation.

I am Senate Republican Leader Dennis Hollingsworth: Thank you for listening.

Senate passes CAR Anti-deficiency Bill

After a failed vote last week, CAR reached out to several senators who had voted against this bill, including Senator Hollingsworth. Senator Hollingsworth shared his legitimate concerns that the bill was too far reaching regarding cash-out refi’s. The bill was amended yesterday and Senator Hollingsworth not only voted for the bill, he stood on the floor and recommended its passage.

Red Alert Update

SB 1178 Passes Senate!

Victory for REALTORS® and Their Clients!

SB 1178 was just approved by the Senate, over lender opposition, with a vote of 30 to 4.

Thank you to the over 5,000 REALTORS® who made a difference by contacting their senator to support the bill! For more information on the vote, see the list below.

C.A.R. is sponsoring SB 1178 (Corbett) to extend anti-deficiency protections to homeowners who have refinanced “purchase money” loans and are now facing foreclosure. Most homeowners didn’t even know that when they refinanced they lost their legal protections, and now may be personally liable for the difference between the value of the foreclosed property and the amount owed to the lender.

Here is how senators voted today.

“Yes” votes: Aanestad, Alquist, Ashburn, Cedillo, Cogdill, Corbett (author), Correa, DeSaulnier, Ducheny, Florez, Hancock, Hollingsworth, Huff, Kehoe, Leno, Liu, Lownenthal, Negrete McLeod, Oropeza, Padilla, Pavley, Price, Romero, Runner, Simitian, Steinberg, Wolk, Wright, Wyland and Yee.

“No” votes: Calderon, Denham, Strickland and Walters.

Not voting: Cox, Dutton, and Harman.

Absent (not in Sacramento that day due to health reasons): Wiggins.

Thank you to everyone who made a call to their senator. Facing lender opposition, many of those who ultimately voted for the bill, may not have done so if they hadn’t received so many calls from REALTORS®.

CAR Red Alert on anti-deficiency bill. We need you NOW!

C.A.R.-Sponsored Bill to Protect Borrowers From Lenders

Call Your State Senator Today

C.A.R. is sponsoring SB 1178 (Corbett) to extend anti-deficiency protection to homeowners who had refinanced from “purchase money” loans and are now facing foreclosure. C.A.R. is sponsoring SB 1178 because most homeowners don’t know that when they refinanced from their original loan they lost their legal protections and now may be personally liable for the difference between the value of the foreclosed property and the amount owed to the lender. SB 1178 will be voted on soon by the entire Senate.

California law has protected borrowers from so-called “deficiency” liability on their home mortgages since the 1930s, but the evolution of mortgage finance requires that the statute be updated.

Current law says that if a homeowner defaults on a mortgage used to purchase his or her home, the homeowner’s liability on the mortgage is limited to the property
itself. The law has worked well since the 1930s to protect borrowers, ensure the quality of loan underwriting and allow borrowers brought down by financial crisis to get back on their feet.

SB 1178 is consistent with the intent of the original law and simply updates it for modern times. Current law was intended to ensure that if someone lost their home to foreclosure, they wouldn’t be liable for additional payment. Since the law was passed over 70 years ago, homeowners refinancing from the original loan to lower their interest rate has become a commonplace. The 1930s legislature didn’t anticipate how mortgages would change over time.

As things stand today, lenders could pursue families to collect this “debt” years down the road. Lenders have up to ten years to collect on the additional debt after a judgment has been
entered on the foreclosure. Years after a family has lost their home, they could find themselves in even more financial trouble. Lenders could even sell these accounts to aggressive collection agencies or even bundle them into securities. The end result would be banks who didn’t lend responsibly in the first place coming after families for even more money that they don’t have.

C.A.R. is Sponsoring SB 1178 because:

SB 1178 is fair. Home buyers, and lenders, entered into the purchase with the idea that the mortgage would be non-recourse debt, and that the lender would look to the security (the house) itself to make good on the debt if the borrower cannot.  mIt meets the legitimate expectation of the borrowers, who have no idea that they are losing this protection by a refinance. Home owners didn’t know that their refinance exposed them to personal liability, and new tax liability, on the note. It would be unfair to allow a lender, or someone that has purchased a note from a lender, to pursue the borrower beyond the value of the agreed upon security.

·     SB 1178 is consistent with the intent of the original law and simply updates it for modern times. Current law was intended to ensure that if someone lost their home to foreclosure, they wouldn’t be liable for additional payment. Since the law was passed over 70 years ago, homeowners refinancing from the original loan to lower their interest rate has become a commonplace. The 1930s legislature didn’t anticipate how mortgages would change over time.

·     Lenders could pursue families to collect this “deficiency debt” years down the road. Under current law, lenders have up to ten years to collect on the additional debt after a judgment has been entered on the foreclosure. Years after a family has lost their home, they could find themselves in even more financial trouble. Lenders could even sell these accounts to aggressive collection agencies or even bundle them into securities. The end result would be banks who didn’t lend responsibly in the first place coming after families for even more money that they don’t have.

·     SB 1178 does NOT apply to “cash-out” refinances, unless the money was used to improve the home and it doesn’t apply to HELOCs.

Be part of C.A.R.’s Government Affairs Team and help pass SB 1178. Call your state Senator TODAY and urge him or her to vote “YES” on SB 1178.

Real world effects:

In 2006, Mary and her spouse have a nice median priced home and a $500,000 mortgage.  Because it is a “purchase money” mortgage, if she defaults or walks away from the house, the lender’s only option is to take the house by foreclosure.

In 2006, Mary decides to refinance the house because interest rates have become so much more attractive.  They refinance their original “purchase money” mortgage, and begin paying on their new $500,000 mortgage. Nothing fancy, no new debt, no cash out, no consumer spending built into the loan – just a lower interest rate. Unbeknownst to Mary, and with no notice from the lender, she has lost the anti-deficiency protection that applied to the original purchase money note. Now, if she loses her job and defaults on the loan, the lender can sue her personally and not only foreclose on the house, but also get a judgment against her for the difference.

In 2009, Mary’s house is “upside down” and only worth half of what it was in 2006 – so, she could lose her house, and still owe the lender more than her original equity. Even worse, the lender can hound her for that liability for the next 10 years whenever she gets a new job or acquires any additional asset. Call Senator Dennis Hollingsworth today at: 1-800-672-3135, pin # 196519886 and
urge him to vote yes on SB1178.

Asian Citrus Psyllid Threatens Area Citrus

We’ve been hearing about this for the past few months. They are now setting traps throughout North County and out in our own groves in hope of catching this pest before it gets a foothold like the Glassy Wing Sharpshooter did a few years ago. That one decimated some 20% of our vineyards. Hope we catch this in time.

California State Senate Republican Caucus
Briefing Report: Huanglongbing and the Asian Citrus Psyllid Threaten California’s Citrus Industry


The Huanglongbing (HLB) disease and its vector, the Asian citrus psyllid (ACP), are a direct threat to California’s $1.88 billion citrus industry.

The HLB and its vector have had a significant impact on citrus trees and subsequently citrus production around the world including Asia, India, China, South and Central America, Mexico and Florida. In Florida, where HLB was first detected in 2005, the disease has infected approximately 20 percent of all its citrus trees and costs approximately $300 million annually.

Otherwise known as the “citrus greening” disease or “yellow shoot” disease, HLB is one of the most destructive diseases of citrus trees worldwide. Once infected, the fruit becomes inedible and the tree must be destroyed to prevent the further spread of this disease. Currently, there is no cure.

The ACP, Diaphorina citri, is a small aphid-like bug that eats the leaves and stems of citrus and citrus-related trees and is destructive to citrus trees on its own. The psyllids are most likely found on new shoots, and the insect population increases during periods of active plant growth. Adult psyllids usually feed on the underside of leaves and can feed on either young or mature leaves. This allows adults to survive year-round. Once the psyllid picks up HLB, it carries it for the rest of its life. HLB is then spread by moving infected plant material such as potted plants, bud wood and leaves.

Thus far, the ACP, after first being detected in 2008, has been confined to urban areas in Southern California. Only one commercial citrus location has been affected. The United States Department of Agriculture’s Animal and Plant Health Inspection Service (USDA) and the California Department of Food and Agriculture’s Pest Exclusion Branch (CDFA) have confirmed populations of ACP in Los Angeles, Orange, Imperial, Riverside, San Diego and San Bernardino counties. These counties are currently under federal and state quarantines. The HLB has not yet been detected in California. However, there have been four detections of HLB in several different regions of Mexico between August and December 2009.

Invasive Species

Invasive species are generally non-native plants, animals, microbes, diseases or plants that are capable of establishing populations in new areas, and the resulting uncontrolled propagation will likely cause economic or environmental harm.

Nationally, the economic impact of invasive species is estimated at $138 billion, which includes the costs of controlling and preventing the spread of invasive species, inspection of agricultural products entering and crossing borders, and the damage to crops and crop production.

In California, six new invasive species are introduced annually or approximately one every 60 days. Currently, invasive species cost the state’s agricultural industry approximately $3 billion annually.

Since 2008, the California Department of Food and Agriculture (CDFA), the lead agency in detecting, managing and eradicating harmful invasive species, has enacted emergency pest abatement and control measures for several infestations of invasive species including Asian citrus psyllid, European gypsy moth, Mediterranean fruit fly, Mexican fruit fly, Oriental fruit fly, Diaprepes root weevil and Sudden Oak Death.

Generally, there are two ways a non-native invasive species can be introduced into a foreign ecosystem, either through self-introduction or through human actions. Self-introduction of invasive species can occur as a result of high densities of species at a particular location that then get transported to another location via wind currents.

Human introductions of non-native species can be accidental or deliberate. Goods shipped from other states or countries via airplane, cargo ship, train and automobile or through the mail can contain insects or microorganisms that are unintentionally transported along with the goods to a new locale.

In the United States, the ACP was first detected in 1998 in Palm Beach County, Florida in backyard plantings of orange jasmine. By 2001, it had spread to 31 counties in Florida, with much of the spread due to movement of infested nursery plants. In the spring of 2001, ACP was accidentally introduced into the Rio Grande Valley on potted nursery stock from Florida. It was subsequently found in Hawaii in 2006 and in Alabama, Georgia, Louisiana, Mississippi and South Carolina in 2008.

In California, the ACP was first discovered on August 27, 2008, in San Diego County. In October 2008, it was found in Imperial County. Later, in August 2009, the ACP was found in Orange County. And then in August 2009, it was found in Los Angeles County. In late August 2009, over 100 psyllids were discovered in a FedEx package shipped to Sacramento.

California is one of the last citrus-producing regions in the world that has yet to be impacted, but HLB could invade California at any time. The risk is high. The most likely sources of a potential infestation would be from goods shipped to California from Florida, Mexico, Hawaii or Asia. The HLB may also find its way to California through self-introduction from Mexico.

Economic Impact

Huanglongbing has the potential to have a significant economic impact on California’s citrus industry. The citrus industry generates nearly $1.88 billion annually and supports on average $3 billion in overall economic activity. The industry supports approximately 26,000 people in California and the industry’s productivity ranks second behind Florida.

According to the USDA’s Economic Research Service, California’s total citrus production has averaged 3.2 million tons per season over the past three seasons, about 24 percent of the nation’s total. California supplies approximately 80 percent of the nation’s fresh-market oranges, while Florida grows oranges mainly for juice. California also supplies 87 percent of the nation’s lemons.

Florida’s $9 billion citrus industry, which supports approximately 76,000 jobs, reports losses resulting from ACP and HLB at $300 million annually. To date, almost 60,000 acres of trees have been removed, which reflects approximately 10% of Florida’s commercial citrus production. Florida growers are spending on average $500 per acre annually on their ACP and HLB control and eradication efforts. One projection provides that almost all of Florida’s citrus trees will be infected in 7-12 years.

Moreover, a CDFA analysis projects that if the ACP begins to transmit the disease HLB, California’s entire citrus industry could be at risk. In one recent study in Florida, the presence of HLB increased citrus production costs by 40 percent. A CDFA analysis based on Florida’s experience suggests that it could cost $224 million or approximately 20 percent of California production.

What is Being Done?

To date, California’s citrus industry has been working with federal, state and local officials to detect, quarantine and eradicate ACP and to prevent the introduction of the citrus greening disease.

In particular, since the ACP and HLB are a national problem, the departments of agricultures of other citrus-producing states have been working with the USDA to develop a comprehensive plan to detect quarantine and eradicate ACP.

The plan requires, in relevant part, increased inspections at points of entry such as international ports, state lines, airports and mail-sorting facilities; education programs; quarantining affected states; the development of new traps and controls; and the development of resistant varieties of citrus.

Recognizing the effects of HLB on Florida’s citrus production, and the devastating impact it has had on other citrus-producing regions, the USDA is expending federal funds to fight the spread of HLB in Mexico to California.

In California, CDFA’s Pest Eradication Branch leads the state’s efforts to detect and eradicate the ACP. CDFA’s funding for its detection and trapping activities is, in part, being underwritten by the USDA. Under federal law, these federal funds cannot be used for the state’s eradication efforts. CDFA’s eradication efforts are currently being funded by its own agency appropriations. CDFA’s pest eradication funds, however, are not unlimited.

The citrus industry is taking a proactive stance in its fight against the ACP. Last year, AB 281 (De Leon) Chapter 426, Statutes of 2009, established the Citrus Pest and Disease Prevention Committee and an industry-funded program to assist in combating citrus specific diseases, vectors, and pests when found in California. CDFA estimates the industry-supported fee assessments will total $1.7 million to combat the introduction of ACP.


The devastating impact on Florida’s citrus industry, coupled with the long-term nature of the problem, illustrate the importance of being proactive and aggressive in preventing both the spread of ACP and the introduction of HLB in California’s thriving citrus industry. Legislative efforts should focus on ensuring that CDFA and other relevant agencies have the resources and funding necessary to protect this vital industry.

For more information on this report or other Food and Agriculture issues, contact Scott Chavez, Senate Republican Office of Policy at 916/651-1501.


Senator Hollingsworth to be Honored Guest at RAF Luncheon


The Southwest Riverside County Association of Realtors is pleased to announce that Senate Minority Leader Dennis Hollingsworth (R-Murrieta) will be our honored guest at a June 18th luncheon. Senator Hollingsworth has been a champion of legislation to benefit Southwest California during his tenure as as Assemblyman and more recently as Senator. Over the years he has also carried several bills on behalf of Realtors® and for property rights issues.

Senator Hollingsworth has been a staunch anti-tax crusader, a position that elevated him to his current role as Minority Leader when his predecessor got a little too chummy with the tax-and-spend majority in Sacramento. As presented in numerous posts to this site, Hollingsworth has continued to rail against tax increases and the spending abuses that plague our state. Hollingsworth has led the Republican Caucus in advocating reduced spending and smaller government at a time when state government has expanded at a prodigious rate.

On a personal note, I have also credited Hollingsworth with helping Gov. Arnold find his balls late last year at a time when all seemed lost. Hollingsworth, who shares an affinity for cowboy boots and stogies with the Gov., was often spotted with Arnie in the Governors ‘smoking tent’ on the back lawn of the Capitol. It was during this time that Arnold experienced a brief resurgence of the vigor and focus that gave so many hope when he first ascended to the office.

As a former President of the Riverside County Farm Bureau, Hollingsworth has brought a unique knowledge and perspective to his position. He understands the need for conservation and the preservation of property rights. But he also understands the need to balance those needs with infrastructure requirements and job creation. He has lobbied the federal government on the Endangered Species Act and specifically, de-listing the Delta Smelt – the wee beastie that has wrought havoc on our state water supply. He has also led several efforts on behalf of Southwest County as well as the entire state, for more local control of funds, projects and power.

Senator Hollingsworth has also just been confirmed as the Keynote address during CAR’s Legislative Day on June 9th. Delegates from SRCAR and other associations will be meeting privately with the Senator in the afternoon. Attendance at our June 18th event will be limited to those members of our Realtor Action Fund Champions who have invested the ‘True Cost of Doing Business’ prior to June 1, 2010. If you would like to find out more about this event and how to get your name on the guest list for this exclusive opportunity to chat with our Senate Minority Leader, please contact me at

Local Legislators Hold Summit on Jobs & Regulations Pt 3

Continued from Part 2.

Well, the litany of grievances was constrained to 3 hours but most panelists indicated they could go on for days about the negative shift in California’s business climate over the past decade.

Solutions? Not many. While several referred to the growing anger and activism of business owners, the prevailing majority legislative climate precludes any real progress unless or until people get really fed up. They recommended a cessation of new regulations, at least until we’ve figured out what the current regulations say. They cautioned our Legislators that California doesn’t necessarily have to take the lead in everything – especially in job-killer legislation and extreme and excessive environmental regulation. They pleaded for no new taxes – against either businesses or individuals. In fact there was some agreement on eliminating personal income taxes and reducing sales tax applied across a broader base including services as a way to stabilize state revenue while reducing the overall tax burden.

Using Texas as a model, they cited the lack of personal income tax and a part-time legislature which has led to a stable housing market and an expanding business climate. Some businesses relocating to Texas have claimed up to 50% reductions in business costs, regulatory burden, more affordable employee housing and a more cooperative and friendly state structure. It’s all about the ROI and California just doesn’t offer that incentive anymore. We have the talent and the innovators. 3 of every 5 patents issued in this country still originate in California. We are still the drivers of the nation’s economy and business – but we are fast losing that edge and doing nothing about it, or maybe even exacerbating it.

Finally, at the risk of creating yet another state level bureaucracy, Vranich suggested a Business Protection Agency. To be run by business people who have actually run businesses and met payrolls and understand the impacts and unintended consequences of the legislation and regulation that routinely plops in steaming mounds from the bowels of Sacramento. This group would have final say-so on anything that would ultimately impact businesses and would have the power to modify or reject anything that would cost more jobs than it would create.

Will anything be accomplished by this summit? Not likely. But it gave our Legislators a chance to hear directly from those most impacted by the current business climate in our state. But as they said, the people who really need to hear this message (i.e. Democratic Legislators), to understand the impact of their actions, are the ones least likely to listen or to understand what they are hearing. Until people wake up and vote with their wallets, California individuals and businesses will continue to vote with their legs and take their business elsewhere.

Local Legislators Hold Summit on Jobs & Regulation Pt 2

Legislative Summit – continued from Part 1

L to R: Brian Hawley, Greater Riverside C of C, Roger Ziemer, Southwest California Legislative Council, Mark Knorringa, Riverside County Building Industry

Panelists repeatedly pointed to onerous regulations and taxes as the primary factors impacting businesses in the (formerly) Golden State. It was referred to as the ‘circle of insanity’ where revenues are down so businesses get taxed and regulated more so they leave the state which leads to reduced revenues so businesses get taxed… well, you understand. They cautioned Legislators – “when someone is drowning you throw them a life preserver, not an anchor.”

Mark Knorringa, Riverside County Building Industry Association, noted that housing equals jobs. But construction jobs are off 56% from their 2004-2006 peak, a loss of 74,500 jobs and a vast multiplier effect. Excessive regulation of their industry, including onerous California Environmental Quality Act (CEQA) regulations and recent California Air Resources Board (CARB) rulings, are like kicking someone when they’re down. ‘They’re just plain mean.’

Virtually every speaker identified problems for their industry resulting from AB 32, the California Global Warming Solutions Act of 2006, which remains former Assembly Speaker Fabian Nunez’ departing joke on the state. Some have taken to calling this bill the California Economic Destruction Act.

Also mentioned frequently – labor laws including overtime and lunch & break rules which make it difficult to allow flex-time or accommodate employee wishes without running afoul of the law. They also make it more expensive to do business and create compliance and paperwork nightmares. Capricious and changing interpretation of existing regulations also increase cost as formerly compliant businesses now find themselves required to expend thousands or millions of dollars simply to accede to a regulators whim.

Legislative priorities were also addressed with many voicing concerns that critical water and infrastructure requirements are neglected while more frivolous matters are entertained. Major employers like Northrop-Grumman, Hilton, SAIC and Starkist are leaving the state taking thousands of high paying jobs. Hundreds of smaller companies have joined the exodus while no major employer is locating here.

We have driven all but 2 or 3 of the states refineries out. AB32 likely signals the end for those remaining. This will drive California’s already high fuel costs inevitably higher while increasing our reliance on imported supplies. The lion’s share of these supplies come from foreign sources not necessarily friendly to our country as well as countries which could care less about their carbon footprint or being on the vanguard of environmental regulation.

In other words – by being radically environmental, we are not only killing California jobs but are actually making the situation worse by driving those jobs to the least environmentally aware nations in the world. Given the state water crisis, we are also currently in danger of becoming a net importer of food, just as we already have become net importers of oil and manufactured goods. It wasn’t always so.

Relocation consultant Joseph Vranich likened the situation in Sacramento to ‘Alice in Wonderland’. Money falls down a big hole, what you see may not be real and what you hear you can’t believe. He posited the ‘top ten’ reasons he has gleaned from relocating clients as to why they are leaving the state:

10. Unfair taxes – California ranks #48 in the country for tax fairness.

9.  Our cities are among the most expensive to do business in.

8.  Labor – our performance is the worst while our costs are among the highest.

7.  Legal treatment – we rank 44th in legal fairness to businesses.

6.  Worst regulatory burden of any state – by a significant margin.

5.  Worst customer service – at the state level. Where to go, how to do it, how to comply.

4.  Worst business climate in general – taxes, regulations, costs, housing costs.

3.  Downright unfriendly – again at the state level. Other states beg companies to come – we beg them to go.

2.  Unreasonable state spending – leads to unpredictable behavior and a risky climate for business – not good.

1.  The worst state in the country to do business in – from inside the state or from outside trying to do business inside. Businesses in garden spots like Buffalo and Philadelphia are recovering faster than California right now.

Continued in part 3.

Local Legislators Hold Summit on Jobs & Regulation

L to R: Miller, Emmerson, Jeffries, Nestande, Hollingsworth

66th District Assemblyman Kevin Jeffries recently hosted a Legislative Summit on Jobs and Regulations in California. Held in the Riverside County Supervisors Chambers, the dais included Jeffries, 65th District Assemblyman Bill Emmerson, 64th District Assemblyman Brian Nestande and 71st District Assemblyman Jeff Miller along with Senate Republican Leader Dennis Hollingsworth.

During the 3 hour meeting, the Legislators listened much more than they talked as they heard from 3 separate panels of local business leaders and nationally recognized relocation consultant Joseph Vranich.

Of the 10 panelists who testified, Southwest County was well represented by 5 individuals including; Roger Ziemer, Southwest California Legislative Council; Ben Drake, Drake Enterprises, Inc.; Roy Paulson, Paulson Manufacturing Corp; Juergen Wohl, International Rectifier; and Douglas Plazak, Reid & Hellyer.

Industries from agriculture to media, Chambers of Commerce to Building Industry, trucking to manufacturing were present to voice their concerns with current state regulations and make suggestions on what California needs to do to regain a pre-eminent role in our nations economy.

Mark Christiansen, Deputy Director of the Riverside County EDA Workforce Division, started the discussion citing some current statistics for the county including the unemployment rate of 15.1%, up from 14.3% in December. This compares to a national unemployment rate of 9.7%. But these 137,000 unemployed people in Riverside County don’t count the additional 9.3% of the people out of work longer than 26 weeks who are effectively out of the market or the 9.4% part-time or under-employed. If you’re doing the math that means about 33% of our workforce is either unemployed or under-employed. It’s even worse in some central-California regions.

Christiansen also pointed to 73,000 jobs lost just over the past year including 15,500 construction jobs with no rebound in sight yet. When queried, he could point to no ‘hard results’ from the Federal stimulus moneys received by the county, saying that had actually led to ‘layoff aversion’ and re-education programs as well as some youth training to make our younger workforce more employable when things pick up.

Continued in part 2.

Legislative Summit – Are You Part of the Solution or the Problem?

Photos courtesy of Kristin Fuller


Local Legislators Hold Summit on Jobs & Regulations, Part 1
Local Legislators Hold Summit on Jobs & Regulations, Part 2
Local Legislators Hold Summit on Jobs & Regulations, Part 3

Just a couple final comments on the recent Legislative Summit that didn’t make it to print in my newspaper article. Businessman after businessman told stories about specific impacts to their business from California’s over-regulatory climate.

  1. A local news paper publisher told how his company could actually hire additional people if they weren’t constrained by overtime and break rules. They have people who would prefer to work flex schedules of 4 ten hour days (including many working mothers with small children) but they can’t accomodate them because anything over 8 hours has to be paid overtime. Reporters on the job, chasing a story, actually have to break up their day by taking (and documenting) the mandatory worktime breaks and lunch requirements. Restaurant owners voiced similar complaints.
  2. Another business owner documented a $60,000 up-front cost and a $20,000 ongoing annual cost required to find and tag every hose and pipe fitting and connection in his facility. Each tag must now be monitored monthly with a sniffer and a report must be submitted to some state agency which goes unread. Due to the nature of his business, the fittings have always been monitored daily as leaks could be catastrophic. Now the state has created an additional overhead requirement of the tagging and unnecessary paperwork as an added cost.
  3. Another business owner pointed to the capricious nature of code compliance. For seven years the above-ground storage tanks at his facility have been considered in compliance with regulations and the integrity of the tanks monitored daily. A new state inspector came on board and determined that since the tanks were actually in a building they should be classified as ‘underground’ tanks and were subject to a different regulation. Each tank had to be retro-fitted with a built-in sniffer unit at a cost in excess of $80,000 and monthly compliance reporting added another $20,000 per year to the overhead. They were also fined because 2 of the 60 sniffers were installed about 2 inches out of what the inspector considered proper.
  4. One business owner documented an additional cost of over $1 million per year to his business for trucking water. He cited this cost as a major consideration in a potential move of his company and its 3,500 California jobs to an off-shore location. His company uses water as part of their manufacturing process, The water is then treated to a point where it cleaner than the water that enters the facility. However, state regulations prohibit them from either using the water for on-site irrigation or to dump it down the sewer system. Instead, they have to contract for 4 tankers trucks a day to come to their facility to pick up the water and truck it four miles down the roadwhere it is then dumped into the sewer system adjacent to a sewage treatment facility.
  5. Finally, we have two local hospitals in the Murrieta area that have not been able to expand their facilities due to a mixture of regulation and politics. The two expansion facilities represent an investment of $94 million by Southwest Healthcare Systems. At one facility a new emergency room which would expand the existing facility (built when our population was about 25% of current) from 8 beds to 38 beds. It also includes a womens care facility, birthing center and the areas first neo-natal intensive care unit and surgi-center. This $54 million facility has been ready to open for 14 months yet sits vacant. Why? Repeated violation cited by state inspectors mainly due to overcrowding in the current ER which would be resolved by opening the new facility. However they won’t let them open the new facility until the overcrowding issues are resolved, a classic Catch 22.

Oh – the problems started for the hospital when they held a vote that kept the unions out. Coincidence? Well, it could be. But the state                     regulators (for whom there is no oversight or accountability) are mighty cozy with the California Nurses Association as well as the SEIU. This             issue has not only cost jobs to the region but has resulted in a local healthcare crisis of sorts as well as a threat to birthing mothers and                     newborns who must be driven or flown an hour away to Riverside, the next nearest neo-natal care unit.

In their most recent lunacy, the state did allow the hospital to triage and treat emergency room patients in a huge circus-like tent in the                     parking lot. Immediately adjacent to the $54 million emergency room that sits vacant.

The summit really shined the light on many, many egregious problems within our state that are serving daily to drive higher paying jobs to other states. But until we get rid of the Democratic majority in our legislature, nothing will change. These people are bought and paid for by the major public employee unions, (nurses, teachers, prison workers, seiu). The majority of our Democratic legislators have also never held a real private sector job – they have in one manner or another suckled from the public teat their entire career and know nothing of meeting payroll, running a business, being competitive in a marketplace or anything remotely useful. Until our legislative demographic changes significantly, California will never rise to its full potential again.

If you live in Califnria and continue voting for the same dead-ass hacks, YOU ARE PART OF THE PROBLEM. Get a clue. They are stangling the life out of our state.

New Homebuyer Tax Credit – details to follow.

Senate Republican Leader Dennis Hollingsworth Issues Statement on Today’s Legislative Maneuvers

CONTACT: Damon Conklin @ (916) 290-3400

Sacramento, CA – Senate Republican Leader Dennis Hollingsworth (R-Murrieta) issued the following statement in response to legislative actions today in the California State Senate.

“Today’s action was nothing more than an end-run around Proposition 13 by the Democrats to ensure the Governor’s signature on the tax increases on his desk.

“Governor Schwarzenegger had previously pledged to veto any legislation passed by a simple majority vote that raised taxes on gasoline in California. The legislative tactics used today are fundamentally unfair, an abuse of process and in direct violation of the 2/3rds vote requirement for all tax increases.

“Californians currently hold the Legislature in low esteem and these types of procedural shenanigans only justify that opinion. California’s legislative Democrats today used the same type of outlandish maneuvers that resulted in passage of the healthcare takeover bill in Congress over the weekend,” stated Hollingsworth.

On a positive note, the Legislature did pass the Homebuyer Tax Credit originally authored by Republican Senator Roy Ashburn (R-Bakersfield). “Even though the Democrats took a Republican bill and made it their own, we are pleased to see the policy of important tax credits pass with bipartisan support,” said Hollingsworth.


Sen Hollingsworth Calls Dems on Job Killer Record

Senator Dennis Hollingsworth

Senate Republican Leader Echoes Governor’s Call to Action on

Budget and Job Creation

“As millions of Californians continue to suffer through the worst recession in 35 years, the Democrat-led Legislature could not even rise to the Governor’s call to pass a single private-sector job creation bill. I applaud the Governor’s continued call to action, but it appears to again fall on deaf ears with Democrats.

“During the last 45 days, Senate Republicans have introduced 54 job creating bills in response to the Governor’s special session to address the massive budget deficit and high unemployment rate that is plaguing all regions of the state. Unfortunately, every job creation bill we introduced was either killed by Democrats in committee or by closing the emergency budget session.

“The flurry of ill-conceived, anti-business bills recently passed by the Democrats that are now awaiting action in the Assembly are exactly what we do not need. Democrats have not offered any tax policy revisions that would make California more competitive with other states or countries in creating new businesses and jobs, both of which produce revenue. The Democrats seem determined to stymie any economic recovery and further drive businesses out of the state.” – Senator Dennis Hollingsworth (R-Murrieta)


CA CEQA law under attack. Job creation urged.

Long a thorn in the side of anybody wanting to build anything in this state, CEQA is under attack this year by members of both parties. The ally of every no-growther in the state, CEQA has  had a hand in delaying or eliminating numerous projects including much needed road, hospital, water infrastructure and home development. Many viable projects have been derailed simply by having their costs explode due to ongoing and capricious environmental requirements. Often just the threat of CEQA is enough to drive project developers to throw their hands in the air.

Want to build windmills to generate electrical power? CEQA compliance will add 6 years to the timetable. Want to put solar collectors out in the middle of the Mojave Desert? Sorry, CEQA says it might disrupt animal migration patterns. Want to add another lane to the I-215? Sorry, you need to re-do all the CEQA stuff you already complied with once even though nothing has changed. Want to build a hospital in Temecula? CEQA will keep you hopping from makework to paperwork in no time at all.

Finally some in our state capitol are growing cajones and saying ‘enough is enough’. We need infrastructure, we need dams and roads and disaster relief and we need JOBS. You’ll note with no great surprise that the Sierra Club bemoans this ‘attack on CEQA’ and ‘developers using the recession as an excuse for rollbacks.’ When the Sierra Club gets into the business of helping create jobs in the state, let me know and I’ll start caring about what they say.

SRCAR has sent a letter to Senator Dennis Hollingsworth in SUPPORT of his bill SB X8-56, outlined below.

capitol weekly

State’s main environmental law targeted on broad front in Capitol

By John Howard | 02/23/10 12:00 AM PST
Years of exemptions from California’s principal environmental protection law are being crafted in the Capitol by the Schwarzenegger administration and lawmakers in both parties, who believe speedy approval of dozens of projects, public and private, will create jobs and spur economic growth. The projects are potentially worth billions of dollars and thousands of jobs — although just how much money and how many jobs have not yet been identified. “If there is a list, if it exists, nobody has seen it,” one Capitol staffer said. “California is going through the worst economic downturn since the Great Depression,” said Sen. Lou Correa, D-Santa, author of one of the exemption bills. “This continues to provide environmental protection and balances that with the opportunity to create jobs.”

Environmentalists say the proposed end-run around the California Environmental Quality Act constitutes one of the most significant changes to CEQA since the law was written 40 years ago and inspired environmental legislation across the country. CEQA is a frequent target of lawsuits and legislation.

Four bills – two in each house – contain Schwarzenegger’s proposal to exempt 25 projects, selected geographically by county, from court review and CEQA each year through 2014. Two of the bills are regular-session measures, the other two were introduced in the 8th Special Session. All are mirror images of each other. Privately, those familiar with the legislation say there is a scramble among lobbyists to get clients’ projects on the exemption list.

The proposals are supported by manufacturers, builders, engineers, developers, business interests and others. They say the proposals will expedite construction of numerous, still-unknown projects and jumpstart the weak economy. They restrict the power of the courts to review the projects and give final authority over the projects to the administration.

The projects could range from refineries to commercial development, housing tracts, highways and water works, among others.

A fifth bill, which would apply retroactively, would exempt critical infrastructure projects for flood control, highways, port security, disaster preparedness and air quality. The proposal is similar to a plan that was proposed last year and rejected. Funding for the projects was approved by voters in 2006 as Proposition 1B, the $19.9 billion transportation bond, and Proposition 1E, the $4.1 billion flood protection bond. Of the funding that was approved, about $16 billion worth of bond funding remains unissued.

The measures containing the administration’s proposals have Democratic and Republican authors. The fifth bill, the infrastructure plan, is authored by Senate GOP Leader Dennis Hollingsworth.

CEQA has long been a target of developers, builders, manufacturers, timber and mining interests and others, but the latest series of bills seeking changes is unusual for their number and scope, observers say. They cite the Legislature’s earlier approval of exemptions for air-emission credits for the South Coast Air Quality Management District and a proposed NFL stadium in Los Angeles County as the progenitors of the latest legislation. Those two proposals constituted the most significant environment-related legislation of 2009.

“We said at the time that they would encourage more of these proposals, and it’s done exactly that,” said Bill Magavern of Sierra Club California. “We’re seeing a stepped-up attack on CEQA this year, and I think we’re seeing development interests using the recession as an excuse for the CEQA rollbacks that they have been gunning for.”

The administration’s proposal, reported by Capitol Weekly in January, is being carried in the Assembly as AB1805 and AB37 8x by Assemblymen Charles Calderon, D-Montebello, and Brian Nestande, R-Riverside. In the Senate, Sens. Correa and Dave Cogdill, R-Fresno, are authoring virtually identical bills, SB 42 8x and SB 1010.

The infrastructure exemptions are contained in SB 56 by Hollingsworth, R-Murietta.

The administration’s proposal allows exemptions for at least 25 construction projects located across California. Ten would be chosen from Imperial, Los Angeles, Orange, Riverside, San Bernardino and San Diego counties; five from Alameda, Contra Costa, Marin, Napa, San Francisco, Santa Cruz, Solano and Sonoma counties; five from Fresno, Kern, Kings, Madera, Merced, Sacramento, San Joaquin, Stanislaus and Tulare; and five projects located in the rest of the state.

The proposal, which includes a provision for at least one public hearing and legislative input, gives final authority over the projects to the Business, Transportation and Housing Agency, or BTH, a cabinet-level superagency whose secretary, a gubernatorial appointee, reports directly to the governor.

The goal of the governor’s proposal is to expedite projects that would generate jobs and stimulate the sluggish economy.

The proposal sets up a timetable for projects to be approved, and allows for approval if the entity seeking the project expects the project ultimately to receive environmental approval. If the project fails the environmental certification, the BTH can choose alternates. The plan calls for BTH to give lawmakers and the public a list of the projects that win final approval.

Environmentalists said the governor’s plan would weaken environmental safeguards, and questioned whether the language barring court review would pass constitutional muster.

Last year, the governor signed AB 81 3X by Assemblyman Isadore Hall, D-Compton, that streamlined certain CEQA requirements to construct a new NFL stadium in the City of Industry. The stadium proposal, already exempted, would not be covered by the latest legislation.

The governor also signed SB 827 by Sen. Rod Wright, D-Los Angeles, with an estimated $4 billion economic impact affecting some 65,000 jobs in the L.A. basin. The bill allows air regulators to distribute valuable emissions credits in the way they did before the courts, responding to environmentalists, blocked them.

Southwest California Legislative Council Announces Position on Bills


The Southwest California Legislative Council, with whom SRCAR is an advocacy partner, today adopted the following positions on current/pending legislation:

Support – ACA 30 (Jeffries) To abolish the office of Lieutenant Governor.
Self explanatory – this largely ceremonial position requires salary & staff expenses and the duties could be consolidated with the Secretary of State.

Support – AB 1671 (Jeffries) To prevent the Governor from appointing vacancies on the County Board of Supervisors.
A recent example in Riverside County left us without the ability to pass certain bills at the county level while Sacramento played politics with us. Our local positions should not be state appointed.

Support – AB 1672 (Jeffries) To make the California Air Resources Board an elected rather than appointed body.
The CARB is one of the most egregious examples of the lack of accountability on state boards & commissions with the Chair stating publicly that if she had to worry about being elected she would worry about all the jobs cost by their recommendation – but she’s not so she doesn’t.

Oppose – AB 1594 (Huber) To prohibit construction of the peripheral canal.
An attempt to circumvent the wording and intent of the state water coalition recommendation and the Nov, ballot initiative.

Oppose – AB 518 (Lowenthal) Provides incentives for cities and counties to reduce or eliminate free or subsidized parking.
Would prove particularly costly to outlying areas like Southwest County where 60% of our residents commute and are forced to park either at work or when they go shopping.  Unintended consequence is a reduction in people going to the malls reducing revenue to shopowners and downstream job market.

Oppose – SB 657 (Steinberg) Require retail sellers and manufacturers to implement policies to eradicate slavery and human trafficking from their supply chain.
Legislation already exists prohibiting slavery and human trafficking. To expect your local grocery store or hardware store to be able to track it’s products back to their origin and potentially take action against some foreign source is ludicrous. Besides, doesn’t Darrell Steinberg have anything better to worry about – like our state budget?

Oppose – SB 810 (Leno) Single payer health care system
We are in agreement that the state should be the appropriate body to determine this issue – rather than the federal government, but this bill is not the answer and would only increase the debt load of the state.

Founded in 2004, the Southwest California Legislative Council is a regional advocacy coalition of the Temecula Valley Chamber of Commerce, Murrieta Chamber of Commerce, Lake Elsinore Valley Chamber of Commerce and the Wildomar Chamber of Commerce. Its mission is to provide a basis for the four chambers of commerce to act on local, state and federal legislative issues to secure a favorable and profitable business climate for our region.

3% Withholding Dead Again (For Now).

The 3% IC withholding proposal which we defeated 3 times last year was again on the table last week courtesy of Senate President Darrell Steinberg. Those of you at Indian Wells recall the discussion that the idea would be in play again this year as it would presumably bring in an estimated $2.5 billion dollars to off-set the $20+ billion projected deficit. Of course the money would come in this year and have to be refunded next year digging an even deeper hole for the 2011 budget – but thinking a year ahead has never been a strong point in Sacramento. Last week we were called on to lobby our Senators on this issue to keep it from coming to a floor vote or to defeat it if it did. It comes as no surprise that Senate Minority Leader Senator Dennis Hollingsworth was solidly in our camp having called Steinberg on it as soon as he resurrected the idea.

Yesterday the Senate Budget Committee, in its wisdom, decided not to bring up independent contractor withholding for a vote at its meeting. For the time being, we’ve won, but Steinberg is expected to push it again later in the year as the budget fight heats up.

For those members concerned about their $49 investment in political survival, you might ask them if they would rather have paid the extra 3% ($90 out of pocket on a $3,000 commission). This is what the $49 does – not travel for Directors, not salaries for lobbyists and not to pay for Chief Economist Lawrence Yun.

Sacramento Bee’s Update on the 3% Withholding Proposition from Darryl Steinberg

Popular Comment

Typical Steinberg logic. Let’s deduct 3% of all moneys paid out in order to reduce the deficit next year and then pay it back the following year, increasing the deficit to 80 Billion. I don’t know if he imbibes too much ‘sauce’ but something is wrong. How does he conjure up all these unbelievable ideas? I’m glad I live in his district. At least I’ll have the pleasure to vote against him in his next election. I certainly hope many others plan on doing the same thing. I’ve had more then enough of Darell Steinberg. He’s a master of confusion; a purveyor of asininity and is one of the most illogical individuals in our government. Time for a Part-time Legislature!!— Perspicacity

Callifornia lawmakers revive forced withholding proposal


Buzz up!
By Steve Wiegand
When it comes to balancing the state budget, no idea ever wears out its welcome. That explains why lawmakers are currently pondering a list of revenue-raising proposals that bit the dust just la

Published: Monday, Feb. 15, 2010 – 12:00 am | Page 3A

When it comes to balancing the state budget, no idea ever wears out its welcome.

That explains why lawmakers are currently pondering a list of revenue raising proposals that bit the dust just last year.

Chief among them is a proposal to require private companies and government agencies to withhold 3 percent of payments they make to independent contractors.

That’s a group estimated to consist of more than 3 million California taxi drivers, lawyers, farmers, miners, plumbers, real estate agents, food storage container salespeople, home builders and others who in essence act as their own bosses.

By withholding part of the payments as income tax and transmitting it to the state, the Franchise Tax Board estimates the state could pull in $1.4 billion during the year instead of having to wait until the contractors filed their tax returns.

Moreover, the FTB estimates that the forced withholding would produce an additional $140 million to $375 million per year that contractors don’t pay now because they under report their income.

That would help close a fairly decent-sized chunk of the $19.9 billion budget gap the state faces over the next 17 months.

“We would be applying the same withholding rules to these businesses that we apply to people who work for employers,” said state Senate President Pro Tem Darrell Steinberg, D-Sacramento, a leading proponent of the idea.

Steinberg points that it’s not imposing a new tax, merely “smoothing out” the collection of a current tax.

That means it takes only a majority vote in both legislative houses rather than the two-thirds margin required for tax hikes, and thus avoids the mountainous obstacle of minority Republicans who are opposed to most revenue raising proposals.

But it doesn’t remove the muscular roadblock in the governor’s office, where Gov. Arnold Schwarzenegger vetoed similar proposals last January and last June.

The idea, Schwarzenegger said in his veto message in January, “punishes Californians by raising revenue without providing permanent and ongoing cuts, does not create jobs or stimulate our economy, (and) does not allow government to run more efficiently in California.

As with most ideas under the dome, the independent contractor proposal wasn’t born yesterday – or last year.

In 1991, a budget crisis prompted then-Gov. Pete Wilson to embrace a similar plan. But fierce lobbying by a confederacy of groups forced Wilson to abandon it in favor of a temporary increase in top income tax rates.

Even if Schwarzenegger changed his mind, which is problematical at best, it’s not a simple task, the governor’s Department of Finance said.

“It could be the Manhattan Project of (tax conformity) efforts,” said finance spokesman H.D. Palmer. “It would involve a significant IT (information technology) undertaking.”

Finance officials provided an example in which a health care provider contracts with an X-ray company that’s a subsidiary of a company that is owned by doctors who for legal reasons are individually incorporated.

Figuring out who owed what tax and who was owed refunds would require a six layer process, officials said.

In addition, the state would only be borrowing much of the money, and would have to refund a lot of it. A 2005 FTB study estimated that more than 70 percent of affected taxpayers would have more withheld than they would ultimately owe, and the state would have to refund almost half of what it collected early.

Tracy Hamilton isn’t keen on making what amounts to an interest-free loan to the state.

Hamilton is a 34-year-old Sacramentan who makes her living selling cosmetics and other beauty care items for Avon Products Inc.

She also supervises a team of about 65 part-time salespeople, including many state workers who are striving to make up for the 14 percent pay cut they’ve taken because of mandatory furloughs.

Some of Hamilton’s income comes from selling products face-to-face to customers.

She takes their checks, forwards a share to Avon, and pays her taxes at the end of the year.

Another portion of her income comes from online sales, in which the customer’s money goes to Avon, and the company sends Hamilton’s share to her. That’s the part that would be subject to withholding.

“That would bother me a great deal,” Hamilton said.

“Being self-employed is hard enough, because everything falls on you, every bill, every expense. To take something out on top of that would be very hard to manage.”

That’s the key difference between salaried taxpayers and independent contractors, according to Amy Robinson, vice president of communications at the Direct Sellers Association, a 200-company group based in Washington, D.C.

“Salaried employees receive compensation for their work every day,” Robinson said in an e-mail. “Independent contractors, direct sellers in particular, are only compensated from the sales and growth of their business.

They need every cent they earn to start, maintain and grow their independent business.” It’s a perspective not lost on Steinberg.

“If we move forward with this, we could have a threshold for small businesses like this,” he said. “But here’s my basic view on it: There is a strong policy rationale for (this) withholding, just as we do for people classified as employees.” More important, he said, is that in the never-ending struggle to balance the budget, everything is a choice.

“Nothing can be seen in isolation,” Steinberg said. “I look at the potential of collecting $1.5 billion in taxes that are already owed, compared to $1.5 billion in additional cuts to education, or health care for kids, or caring for the elderly and disabled … and it’s a pretty simple choice for me to make.

“And that’s what this whole struggle is about, making choices.”

© Copyright The Sacramento Bee. All rights reserved.

Sen. Hollingsworth Asks Legislators to Question Before They Vote. Good Luck With That.


“Our budget problems in California are a symptom of the problems in California created by years of over-regulation and years and years of bills going through this house and the other house across the other side of this building that destroy jobs.” Senate Minority Leader Dennis Hollingsworth (R – Murrieta)

Anybody who has witnessed the madhouse that our state legislature becomes at the end of session or during cross-over, will have a heightened appreciation for the latest call to action from Senate Hollingsworth. In a speech before the Senate last week, Hollingsworth said that the goal of the Legislature should be ‘to restore California’s job climate and economy’ and asked Legislators to ask themselves 5 questions before every bill they vote on.

  1. Does this legislation include an analysis that proves that the bill actually improves the economic conditions in California?
  2. Does this legislation improve the employment opportunities for struggling Californians impacted by this recession and state government-imposed burdens?
  3. Does the legislation or the regulation make compliance easier for businesses to create jobs, or make it tougher to create jobs?
  4. Does the legislation or the regulation make California a more attractive place to live and do business?
  5. Does the legislation or the regulation encourage investment in jobs at all levels of the employment scale?

Sounds simple enough but given the performance of our Legislature over the past several years (decades), it’s no easy task.

Seems there’s always somebody hell-bent on doing just the opposite, giving in to every special interest, public union, green, enviro, fringe element to further alienate jobs, housing and economic growth. Tell me that’s not so?

If you have the fortitude to watch the final 2 days of this session, you’ll see Legislators voting on literally hundreds of bills, most of them totally worthless and self-serving (the bills &/or the Legislators). They’ll do this without having read the bills, without a moments debate and with no thought to the costs or consequences of their votes. I’d venture 80% of the bills will be passed on a straight party line vote and neither you nor they will have the slightest idea what they just voted on.

Senator Hollingsworth’s goals are right in line with the California Chamber of Commerce’s ‘Agenda for Economic Recovery’, as detailed in this article. Now if we could only find a few Democrats in Sacramento who have actually held private sector jobs and understood the economy we might have a shot at accomplishing what needs to be done.

Awwww, that’s just silly talk. What am I thinking? If you need any more proof, just look at what they’re doing to the water bills in the face of that imminent crisis.  Well, that’s just my opinion. I could be wrong.

Sen Hollingsworth Denounces Senate Early Release Bill

Senator Hollingsworth Denounces Prisoner Early Release Bill

Senator Hollingsworth Comments on Prisoner Early Release Bill
[View Video]

Senate Republican Leader Dennis Hollingsworth addressed the Senate floor to denounce the Prisoner Early Release Bill. To view a video of Senator Hollingsworth’s floor speech, please click here.

Mr. President, Senators –

The first, foremost, primary, and most important role of government is the protection of the public safety. It is the protection of people from very, very bad people who would take their life, brutally assault them, take their property, and otherwise commit crimes against them. That is our first and foremost responsibility in this Legislature – in this state government.

And what we have here today that is being characterized as a problem with prison populations is just not correct. And what we have today that is being further characterized as a larger problem with our criminal justice system is absolutely not correct. And I and my colleagues could not disagree more vehemently.

What we have today, and I will explain this in detail, is we have the failure with this measure to take on increasing costs of an agency, a bureaucracy that have been foisted on it by the courts, and inefficiencies, and lack of attention. But it is not due to a increase in prison population. We do not have that problem.

Since 1999 the prison population was 162,000. Today, with 5 million more California’s population, the prison population is 162,000, but we are spending billions more on that system. That is a financial management problem, not a prison population problem. Your remedy is to let bad people go and to take away people’s liberty, life, and their property. You are saying with this measure that we need to change the criminal justice system because it’s not working.

Let me be clear. In 1993, we had almost 400,000 cases of violent crime every year in this state – with a whole lot less people. And what did we have pass then. Because of this body, in the early eighties and mid-1990s, refusing to act on skyrocketing cases of violent law, the people took in their own hands passed 3 strikes, truth in sentencing, 10-20 life – and what happened?

In 1994 it started dropping. And last year what did we have? Less then 200,000 cases. Less then 200,000 cases of violent crime with the same number of prisoners and many more millions of Californians. So tell me that that is a criminal system that is not working. That’s a prison system that needs adjustment, not a criminal justice system. And you cannot say you are not making tremendous changes to that when you are talking about changing criminal laws to let people out early…in order to change what is a felony to a misdemeanor… in order to change vehicle theft if its less than 2500 bucks…and to give good time credits for doing nothing but showing up in your cell. This is an exploitation of a fiscal problem for an agenda that you have wanted to do but the people have taken away from you at the ballot box because they have the power of initiative.

So today we have put on the table many proposals that would save much more than the 1.2 billion dollars. Throughout this process we have proposed changes that would not let people go, that would not change our criminal justice system…that would put savings back into the system…they have not been incorporated into this proposal. Today we attempted to amend what is before us a terrible proposal and you rejected every one of those amendments.

Tell me, if this is a fiscal crisis, and the resolution of a fiscal crisis, why is there a sentencing commission in there that takes the legislative authority dually granted to an elected body by the people and gives it to something extra-governmental? Something completely outside of the power of the people to change, and then winks and says, “You know what…we can reject those recommendations if we want to, but if they choose to lower the type of sentences that has made this state safer than it has been from the 1950s those will have the force of law” Without one elected member of the Legislature ever voting to ever change that sentence. And then you have the gall to put a felon on there to advise people? I wonder what he will recommend?!

This is the exploitation of a fiscal problem in order to achieve a liberal agenda that the people have taken away from you. You have rejected real savings that the Republicans have offered in order to accomplish that exploitation. And it should be rejected.


Sen. Hollingsworth Helps Gov Find His Lost Balls

You’ve frequently heard me refer to the Otto von Bismark quote about laws and sausages being two things people are better off not seeing made in person. Well, the LA Times published an article yesterday on the sausage making process we just witnessed in Sacramento.

senThe Times also had some carefully parsed words for our own Senator Hollingsworth. While they were careful to maintain their liberally correct stance by pointing out how conservative Hollingsworth is and what an unusual alliance he has formed both with the Governor and his Chief of Staff, they did admit that Hollingsworth is usually the first to arrive at meetings and the last to leave and has been known to enjoy a stogie with the Gov.

I’m guessing maybe Senator Hollingsworth had something to do with the Governor finding his balls again during this process. After the Teachers Association, the Prison Guards Union and the SEIU deftly removed them and hid them back in 2005, the Gov has been a shadow of the man we thought we elected to replace the Grey Man. However, Arnie has been waving the old saber around again, he  actually vetoed numerous line items including many that are near and dear to the hearts of liberals, and though the budget has numerous gimmicks and smoke shrouded fixes, it DOES NOT contain any new taxes.

Is it merely coincidence he has been spending more time with Hollingsworth? I think not. My guess is Dennis has spent time walking the Governor down memory lane back to the days when he was popular, when people had high expectations of him, when he was a man of stature and substance, in short, back to when he was a Republican.


California’s budget process as sausage-making

Unexpected, if not unholy, alliances

There was one near-constant in the budget talks: Dennis Hollingsworth was the first one into the governor’s office and the last one out.

The Senate Republican leader from Murrieta forged a close alliance with Schwarzenegger; the pair were repeatedly spotted by staff and fellow lawmakers puffing on cigars in the governor’s courtyard smoking tent, even after hours of fractious budget talks.

Schwarzenegger has long had his favorites among the legislative leaders; no one expected that one would be Hollingsworth. After all, the Christian conservative rose to power in February in a midnight coup by bashing the last Schwarzenegger budget deal and blasting the closed-door negotiations that spawned it.

Even more unlikely, however, was the kinship struck between Hollingsworth, an ardent opponent of gay marriage, and Schwarzenegger’s Democratic chief of staff, Susan Kennedy, who married another woman in a ceremony in Hawaii about 10 years ago.

They, too, bonded over cigars. Kennedy is known to have some of the finest in the house.

Coincidence or not, I’d like to thank the Senator for helping Arnie find his balls again and for keeping the truculent and timid Republicans in line this time around. With more Hollingsworth’s and fewer Adams’ and Maldonado’s, we might actually get this state running again.

You can also read the entire budget summary here together with 9 pages of the Gov’s line item vetoes.