OCBC NEWS ROOM
August 31, 2010
OCBC COMMITTEE UPDATES - WORKFORCE HOUSING
The Workforce Housing Committee meeting, held on August 18, was well attended by some of Orange County's top housing executives, realtors, and builders. Dr. David Hendryx of RSI Development (OCBC’s newest member), Elizabeth Snow of the California Building Industry Association, and Larry Brose of the Orange County Planning Commission all presented to the group.
Dr. Hendryx, Vice President of Infill Development for RSI, gave a fascinating presentation on a new venture dubbed “The New House”. These homes will feature precision construction techniques for all wall panels and trusses and can be built in as little as six weeks. “What RSI is bringing to the table is more pre-engineering and more pre-thought,” said Hendryx. “We are vertically integrating manufacturing and supply-chain disciplines into new-home construction.” RSI will have their own crews assembling the homes on site, which will cut down on build time. A brand new, fully-finished house will range from $50,000 to $200,000 below market rate homes elsewhere and the cost is relevant to location. Its manufacturing pedigree will also serve RSI’s commitment to building efficiently by reducing material waste and shortening cycle times. As it moves forward, RSI is looking to cultivate private-public partnerships with cities and government agencies through its RSI Housing Partners distribution channel.
Elizabeth Snow, President and CEO of the California Building Industry Association (CBIA), expressed to the committee her true concerns with the state of housing in California and of CBIA. “Right now, we are projected to close our doors in 2012,” said Ms. Snow. “CBIA is the representative for the housing sector for all of California. Our loss would be devastating.” One of the key statistics Ms. Snow spoke on was the year to year figures for construction start estimates. “So far in 2010, California is at 48,000 and counting construction starts. We’ve estimated that by 2013, those starts will increase up to 100,000; however, this is still a lower number than the last recession California faced.” Snow went on to discuss the devaluation of homes in the current market and how Sacramento is faring in this economic down turn the state is in. “Is the business community partly to blame for the housing issues California is facing right now?” asked Snow. “The business community seems more interested in writing big checks for big propositions, instead of investing on the front end of our problems.” Even though businesses are actively engaged in the advocacy process for the housing industry, Snow believes that their focus is on certain propositions, instead of electing the right people to the legislation.
Recently appointed to the OC Planning Commission, Larry Brose relayed how his experience as a developer and, now, as a Realtor© provided perspective on the Planning Commission. Tying all the presentations together, Larry speculated about when the “move up buyer” will feel comfortable to do just that, and at what level they are willing to take a loss or break even on their home to move. California is a transitory society, so this type of activity will be a key indicator for recovery. Larry also talked about the industry getting smaller, and that the public builders will lead the way because they are the only ones with financing. For County Planning, this will be a trend they can manage as the department is accomplishing more, with fewer resources. “Our planning staff is down from 100 bodies to only 30,” stated Brose. For more information, contact Kate Klimow, Vice President of Government Affairs.
August 19, 2010
OCBC'S GETTING RESULTS: A PROGRESS REPORT FOR 2010
Without question the recent economic struggles have forever changed the face of business. We leave behind the first decade of a new century and have entered 2010 faced with a new normal. As the leading voice of business in Orange County, OCBC is trailblazing efforts to not only identify the new normal, but actually help define it. Click here to read OCBC's 2010 Annual Report.
August 13, 2010
STATE'S BUDGET WOES FORCES WATER BOND TO BE DELAYED TILL 2012 ELECTION
Reliable Drinking water Supply Act to the November 2010 election. Governor Schwarzenegger worked with proponents to postpone the bond vote, and he signed the bill on Tuesday afternoon. The rapid action was required in order to meet printing deadlines for the November ballots. The $11.4 billion water bond is part of a comprehensive legislative package on water that passed the Legislature as part of a special session on November 4, 2009. The package also includes policy bills that cover Delta governance, conservation, groundwater monitoring, and illegal water diversions.
The Business Council was in support of delaying the vote for the water bond. Although the single biggest threat outside of the existing economic crisis facing the business community is the lack of a reliable water supply, the very real pressures on the state's budget cannot be overlooked. OCBC continually asks our legislative leaders to focus on the critical issues at hand, and right now that is creating an environment in California that is conducive to business recovery and resolving the budget deficit. The water bond is absolutely critical to California's future and as such, it should not be used as a political "hot potato" in a contentious election year. We would rather the water bond not be given the "Squirrel!" treatment and allowed to be a distraction when so many other defining issues deserve attention. For more info, contact Kate Klimow, Vice President of Government Affairs.
August 13, 2010
THE BOEING COMPANY: ANOTHER ONE BITES THE DUST
The Boeing Company announced Monday that it has decided to move the A160 Hummingbird Program office from its current location in Irvine to Mesa, Arizona, where production of the unmanned aerial vehicle already is being planned. Approximately 160 positions are affected by the move.
The Boeing A160 Hummingbird is an unmanned aerial vehicle (UAV) helicopter. Its design incorporates many new technologies never before used in helicopters, allowing for greater endurance and altitude than any helicopter currently in operation. It is designed to fly 2,500 nautical miles with endurance in excess of 24 hours and a payload of more than 300 pounds. It will fly at an estimated top speed of 140 knots at ceilings up to 30,000 feet, which is about 10,000 feet higher than conventional helicopters can fly today.
Program staff will be moving to Mesa over the next few months, and there will be some continued back-and-forth temporary assignments between Irvine and Mesa. Boeing plans to close the existing program offices and exit the Irvine facility at the end of next year, moving the remaining staff to Huntington Beach, Calif. Currently, 160 employees work for the A160 program in California. While transition planning is under way, the remaining employees will stay in Irvine until the site closes and they’re transferred to other Boeing facilities, including those in Southern California.
While the decision at the Boeing Company will enable them to meet the changing program and customer requirements, it is ultimately a significant loss to California. With these jobs leaving Orange County, that is 160 less highly skilled workers California will have in a state that craves an innovative and well-educated workforce. As our legislature continues to grapple with the budget, we ask them to take a good look at the economic future that is slipping from their hands. As competition for future growth intensifies, California’s competitiveness is falling. Streamlining of the regulatory process, modest reform of environmental regulations, and an acknowledgement that business is the solution, not the problem, would go along way in getting California back on track. Our elected officials talk the good talk about wanting to create jobs, but in this economic climate, you can’t be for jobs and against business.
For more information, contact Dr. Wallace Walrod, Vice President of Economic Development.
July 30, 2010
OBAMA ADMINISTRATION BRIEFS OCBC ON HEALTH CARE REFORM BUT QUESTIONS REMAIN
Talk about Health Care: The Good, the Bad, and the Possibilities
IRVINE, Calif. – July 28, 2010 – U.S. Department of Health & Human Services Region XI Director Herb Schultz gave a policy briefing on the new federal health care laws OCBC and its co-hosting members, Allergan and CalOptima, on Wednesday, July 28. With the Affordable Care Act, signed by President Obama in March, the Department of Health & Human Services plans to transform health care in a matter of a few years. A timeline has been developed to implement the reforms each year until 2014 when all U.S. citizens are expected to have medical insurance.
Some of these changes include new consumer protections by 2010; having Medicare prescription drug discounts by 2011; expanding Medicare authority to bundle payments by 2013, and; giving citizens health insurance despite having preexisting medical conditions by 2014. Mr. Schultz emphasized their goal to break down silos, and work with states and local government, but also the business community, in developing the regulations that are yet to be developed. There were many unanswered questions, however, including how to cover the massive costs of the new plan, what new taxes will be enacted, why tort reform wasn't enacted to lower health costs, expected impacts to OC's medical device R&D, and that businesses are already seeing higher insurance costs for their employees.
The basic framework of this health care policy lies in three points: 1) private market reforms; 2) health insurance exchanges, and; 3) public program expansion. As a result, various agencies, businesses, and government bodies need to collaborate in order to provide all citizens with some form of medical insurance. In other words, change has to occur on all levels.
Mr. Schultz stated that the biggest misconception about the new federal plan is that prevention measures wouldn’t reduce costs and impacts health care. Prevention efforts should lower health care costs in the long run by identifying potential medical problems before they materialize or get worse. For example, the Let’s Move Campaign, initiated from the Office of the First Lady, fights against childhood obesity by encouraging children to exercise. Awareness and education of healthy lifestyles could prevent the onset of diabetes and heart conditions stemming from a lifetime of obesity.
Unfortunately, there were many more questions left unanswered, particularly when it comes to the cost of implementing such a broad healthcare plan. The business community has very real concerns about how exactly all of these “federally funded” programs would secure their revenue sources. There also seemed to be little concern about the tax structure of so called “Cadillac” healthcare plans that specifically exempted Congress and Unions. It is even more alarming when many business plans will get pushed into the “Cadillac tax” category simply because of increased premiums and mandated benefits created by the ACA.
The most important take away is that the ACA is not yet set in stone. With projected goals as far away as 2018, governments, businesses, and citizens can still work together to find better solutions to this health care issue.
July 30, 2010
ECONOMIC DEVELOPMENT UPDATE: ENTERPRISE ZONES
OCBC held its Economic Development Committee Meeting on July 21, 2010 with a packed house of local business leaders and executives. After a welcome from Committee Chairman Dan Miller of The Irvine Company and self-introductions, an update on the Enterprise Zone Application for Anaheim was given by Mrs. Janet Coe, Economic Development Manager, from the City of Anaheim, and Mrs. Patti Nunn, Director of Economic Development Consulting for MuniServices. Briefly, they discussed the staggering importance of Enterprise Zones in Orange County, highlighting Santa Ana as the most successful, and the benefits of such zones as:
- Tax Credits for hiring eligible employees;
- Tax credits for sales and use taxes paid on qualified machinery purchases;
- Interest deductions for lenders on loans to firms within the area;
- A 15-year net operating loss carry-0forward;
- Accelerated expense deductions; and
- Priority for various State programs, such as State contracts.
Previous applications sent in by the City of Anaheim competing for an enterprise zone designation had been approved but not awarded, yet the City of Anaheim is committed to improving the economic climate for business and manufacturing through incentives with the objective of increasing business expansion, retention, and attraction. With only two communities being awarded these designations, Anaheim, with the help of the City's business partners, intends to be one. The applications are due September 13, 2010 and entail a grueling application process. In order to show the need for this Enterprise Zone designation, the City of Anaheim is asking businesses to provide letters of support or commitment to be included in this application. Partnerships between the City and private businesses will be key in ensuring the award of one of the Enterprise Zone designations to the City of Anaheim. The State expects to announce the designated zones in December 2010 with the new zones coming into effect in June 2011. Please send letters of support to Janet Coe, Planning Department, City of Anaheim, 200 S. Anaheim Boulevard, Anaheim, CA 92805 by August 20, 2010.
July 30, 2010
ECONOMIC DEVELOPMENT UPDATE: FOREIGN TRADE ZONES
Most might not know this, but Orange County is a Foreign Trade Zone (FTZ) in California. By definition, a foreign-trade zone is a physical location that has been designated by the FTZ Board as an area where a user can gain access to the benefits of the FTZ Program. The foreign-trade zone site is considered outside the Customs Territory of the U.S. and is where merchandise is still considered to be part of international commerce. It is only once the merchandise leaves the FTZ (either in the same condition as imported or further manufactured), that normal tariff and Customs regulations pertaining to the entry of goods are applied.
Foreign Trade Zones reduce the cost for businesses because they are not paying for taxes on individual pieces of merchandise. Commodities admitted into the FTZ can be repacked, relabeled, cleaned, sorted, sampled, exhibited, destroyed, processed, assembled, manipulated, or exported, all without paying U.S. Customs duties. This system allows companies to obtain significant financial savings, since raw material, components and packaging can be transported tax free through these zones and items shipped abroad after processing are exempt from U.S. taxes. For more information, contact Wallace Walrod, Vice President of Economic Development.
July 27, 2010
"MEASURE M" TRAFFIC IMPROVEMENTS STILL ON TRACK IN TOUGH ECONOMY.
July 16, 2010
Dear Editor,
Your July 14 editorial, “Measure M’s lost billions,” was way off the mark. You incorrectly claim that the Orange County Transportation Authority used “bloated” and “inflated” projections to estimate what the half-cent sales tax would generate over the 30-year life of the program, which was renewed by 69.7 percent of OC voters in 2006.
In fact, Measure M2 projections were developed using a blended economic forecast from Chapman University, Cal State Fullerton and UCLA – the same institutions commonly used in the private sector for economic projections. In 2005, the three universities predicted an average growth in sales tax of 5 percent per year for 30 years.
What the three universities did not predict was the worst economic meltdown this country has experienced since the Great Depression. OCTA, like nearly every individual, business and public agency in the country, has been significantly impacted. Unfortunately, OCTA is no different than the millions of Americans who have seen the value of their retirement savings plummet or the thousands of companies who have laid off employees or been forced into bankruptcy.
Like the rest of the country, OCTA has had to adjust to a new economic reality and as the editorial noted, Measure M2 is now anticipated to bring in approximately 60 percent of the original $24.3 billion. What the editorial failed to mention is that while the collection of M2 doesn’t begin until April 2011, OCTA has leveraged that future funding to get more than $4.5 billion in improvements under way today through the M2 Early Action Plan.
These projects are creating private sector jobs at a time when they are sorely needed in this county. And, because construction costs are down 40 percent, OCTA is able to stretch these dollars further than originally planned. This is critical because improving transportation is a key component in ensuring Orange County is able to attract and retain businesses as we emerge from the recession.
In addition, OCTA’s board recently enacted a strong policy to contract out as much engineering and professional services work as possible to private sector firms. Thus, the M2 Early Action Plan means architects, engineers, contractors, construction workers and inspectors can get out of the unemployment line and back to the business of rebuilding their lives and improving the freeways, streets and roads for this county.
Through economic ups and downs during the past 20 years, the original Measure M program delivered more than $4 billion in real traffic improvements, fulfilling OCTA’s promise and commitment to voters. The commitment to M2 is just as strong and OCTA is well positioned to deliver on its promises to the hard-working taxpayers of Orange County, even in a tough economy.
Jerry Amante
OCTA Chairman
Tustin Mayor
David Sundstrom
Chairman
Measure M Taxpayers Oversight Committee
Lucy Dunn
President and CEO
Orange County Business Council
July 20, 2010
MICHAEL MUSSALLEM OF EDWARDS LIFESCIENCES MOTIVATES BUSINESS LEADERS AT CLB
The Center Club in Costa Mesa was abuzz with excitement this past Wednesday morning to hear Michael Mussallem of Edwards Lifesciences share his stories and give his thoughts on healthcare, education, motivation, and more. With a packed room of Orange County's top executives and leaders, and led through the probing questioning of former OCBC chairman, Tom Phelps of Manatt, Mussallem spoke freely on issues facing this county and the nation.
Michael A. Mussallem is chairman and chief executive officer of Edwards Lifesciences Corporation, the global leader in the science of heart valves and hemodynamic monitoring. Mussallem has headed Edwards Lifesciences since it was spun off from Baxter International Inc. and began operating as an independent, publicly traded company in April 2000. Previously, he was responsible for the worldwide operations of both Baxter's CardioVascular business, which he had headed since 1995, and its Biopharmaceuticals business, which he had been appointed to lead in 1998.
He shared his family background, education and early history as well as challenges facing Edwards Lifesciences today, including his participation in negotiating health care reform in Washington, D.C. Further, Mussalem reflected on OC's need to stay engaged in "reform" of the health care reform, aware of the need for amendments to the bill. He also shared the continuing need for a well-educated workforce to fill the jobs of the future at Edwards Lifesciences-and the company's support of local education efforts from K-12 to UCI is strong.
For more information, contact Celeste Signorino, Vice President of Investor Relations.
July 19, 2010
BENTLEY PRINCE STREET ROLLS OUT THE RED CARPET AT ALL-STAR GAMES
Bentley Prince Street’s vibrant red carpet reached new heights as it beautifully complemented the pathway of last week’s Major League Baseball All-Star Parade. As California’s largest commercial carpet manufacturer, the company was chosen for the third time to roll out its sustainable designer carpet, New Stratford, for the All-Star event.
Anthony Minite, Bentley Prince Street President, is an avid baseball follower. Minite was honored and excited to have baseball's best players make their way down almost an entire mile of Bentley Prince Street broadloom carpet. It made a visual impact and helped set the tone for the event, stretching all the way from South Harbor Boulevard to Disney Way. He was also looking forward to this year’s parade taking place in Anaheim, as his company greatly supports the Los Angeles Angels of Anaheim.
Outside of supporting major league events, Bentley Prince Street has defined style, color, quality and service for 30 years, manufacturing award-winning, sustainable broadloom and carpet tile products for distinctive commercial and residential interiors across the globe. Minite’s industry-leading management style holds not only the company’s products to a higher standard, but its associates as well. For the fourth consecutive year, Bentley Prince Street has been named one of the 2010 Best Places to Work in Los Angeles by the Los Angeles Business Journal.
Bentley Prince Street is a strengths-based organization, meaning the company works to identify and maximize the strengths of all its associates worldwide in order to design the best possible products and develop lasting relationships in and outside of the company. The company also provides a comprehensive Health and Wellness program, which is offered to all associates and includes workshops, nutritional and exercise counseling, on-site 3,000 sq. foot workout facility and on-site Health Clinic. Minite ensures all associates are encouraged to contribute to their local communities by volunteering with Habitat for Humanity, Coastal Cleanups, Tree People and the American Red Cross, among others.
Based in Los Angeles County, Bentley Prince Street produces and ships more than six million yards of carpet each year from its LEED-EB Silver Certified facility. As a proud California company, Bentley Prince Street continually searches for innovative ways to make a positive impact on the state and the environment. The company is committed to sustainable commerce and innovations to integrate style and function with environmental practices through its Mission Zero goal of eliminating any negative impact it may have on the environment by 2020.
With his true entrepreneurial spirit and hard-to-deny patriotism, Anthony Minite looks forward to Bentley Prince Street’s involvement with next year’s All-American, All-Star event – and to increase awareness of the company’s beautiful products and inspiring environmental story.
For more information on Bentley Prince Street, please visit www.bentleyprincestreet.com
We invite you to stay connected and follow our blog at http://bpscarpet.blogspot.com/
July 19, 2010
OCBC'S INFRASTRUCTURE COMMITTEE: NUCLEAR ENERGY, GULF CLEAN-UP, HIGH-SPEED RAIL
OCBC held an informative Infrastructure Committee meeting this past Tuesday, July 13, 2010 with guest speakers from OCBC member The Shaw Group Inc. as well as Consensus, Inc., representing the High Speed Rail Authority. Topics included a brief on clean-up efforts in the Gulf, an overview of nuclear and geothermal markets, both domestic and international, and an update on the new shared track alternative for the proposed California High-Speed Rail system.
Jason Williams, National Director of the Power Sector for Shaw Environmental & Infrastructure, provided an overview of project trends in the nuclear and geothermal markets throughout the nation and the world, but also spoke specifically about the viability of these markets in California. “Our nuclear business is rising dramatically, while fossil fuels such as coal and gas are decreasing,” stated Mr. Williams. He went on to say, “Shaw has been lobbying for nuclear plants in California for years, especially since solar energy costs almost four times as much as nuclear. With nuclear energy at $76 / Mega watts per Hour (MWh) versus solar energy at a dramatically steeper $682 / MWh, nuclear power just makes sense.”
Shaw, through acquisition, has more than 60 years of expertise in the nuclear industry and has been the original engineer/constructor for 17 U.S. nuclear power plants, including engineering and designing the first commercial nuclear power plant in the US. Shaw provides service to 95% of all U.S. nuclear plants, and is currently providing services on the only two active restarts in North America.
Shaw is also part of the AP1000 Consortium with Westinghouse Electric Company, selected by the People's Republic of China State Nuclear Power Technology Company (SNPTC) to build four new nuclear power plants.
In addition to its role as a global leader in nuclear power plants, Shaw is also an innovative leader in the design and construction of geothermal power plants. Geothermal is another cost-effective, alternative energy source. California contains the largest amount of geothermal generating capacity in the United States. Shaw is involved with the largest concentration of geothermal plants, The Geysers, located north of San Francisco. This location has been producing electricity since the 1960s. It uses dry steam; one of only two places in the world for this resource.
Shaw is also working on the Geothermal Flash Steam Project in Imperial Valley. It is estimated that the state has a potential of more than 4,000 megawatts of additional power from geothermal energy, using current technologies.
For future development of these cost-effective, and environmentally friendly, energy sources, the business community, with the help of OCBC, can make a difference by speaking with state and federal elected officials. “Legislative support provides financing assurance for new nuclear power plants and the use of geothermal energy,” Williams concluded.
Following the discussion of innovative technology and what it could mean for California’s future, Jennifer Labrado of Consensus Inc., representing the High Speed Rail Authority, provide an update on California’s transportation future. The California High-Speed Rail system, will be the first true high-speed rail system in California. Trains on the proposed Anaheim-to-San Francisco line, which is projected to cost about $42 billion, would whisk passengers the 400 or so miles in under three hours. The project would take a decade to complete, with extensions to San Diego and Sacramento planned. Voters approved a bond to support construction of the system in 2008. The project received an additional boost of $2.25 billion, the largest amount for any state, in federal economic stimulus funds. Construction is expected to begin next year.“The EIR/EIS is in progress for all nine sections of Phase 1 (SF – LA/OC) and the LA to Anaheim section is about 65% complete. We are definitely leading the pack,” stated Labrado. To help alleviate some concerns from existing neighborhoods, the project is examing the viability of using using a shared track alternative (sharing with existing Metro and Amtrak rail lines) instead of constructing a new dedicated track from Anaheim to LA. Further analysis is needed to determine the one train stop, either Fullerton or Norwalk/Santa Fe Springs. The high speed rail line is seen as a critical component of the regional transportation solution, providing necessary relief to shrinking capacity on highways, freeways and airports.
For more information on the California High Speed Rail Project please visit www.cahighspeedrail.ca.gov or call 916-324-1541
For any other inquiries please contact Kate Klimow.
July 2, 2010
OCBC ENCOURAGES STATE LEADERS TO FOCUS BUDGET ON JOBS CREATION
As budget talks begin to bridge an estimated $19.2 billion deficit, Orange County Business Council (OCBC) encourages state leaders to develop a budget conducive to economic growth and jobs stimulation.
During budget discussions, one incentive potentially on the chopping block is the legislature’s 2009 decision to allow a single sales factor formula, which puts a greater weight on sales revenues for businesses. This one change in California’s business tax code would create 144,000 new jobs and increase state revenues by $411 million annually, according to a recent study conducted by USC.
The study, authored by Marshall School of Business professor Charles W. Swenson, Ph.D, concluded that changing the state’s apportionment formula will result in significant economic growth and job creation by encouraging companies to locate jobs and facilities in California. In addition, the study put to rest the myth that the change will only benefit business.
“A return to the old formula will be a step back on California’s road to economic recovery,” stated Lucy Dunn, OCBC President and CEO. “Withdrawing this incentive now would significantly impact California’s efforts to rebound from the recession and further devastate California’s already lagging business climate.”
“At a time when Orange County has lost almost 15,000 jobs in the last year, the impact of such a program on Orange County would be the creation of 14,000 jobs and an increase of $35-40 million in state revenues from Orange County," stated Dr. Wallace Walrod, Vice President of Economic Development and Research for OCBC.
During budget negotiations last year, the Governor and legislature approved several economic stimulus measures to encourage private investment and job creation in California. The single sales factor, embodied in SB 3x15, was one such measure. Passed with bipartisan support, the measure is scheduled to go into effect in 2011.
The solution to California’s perennial budget problems is not to stifle business by removing the meager incentives available, which will simply exacerbate the existing and structural crises by fueling more job losses and fewer tax revenues. Government cannot fix our economic problems through legislative fiat, but our legislative leaders can grow California’s economic pie by creating an environment that is conducive to creating jobs
For more information, please contact Kate Klimow.
June 21, 2010
OCBC AND OCWIB DISSECT TECH FORUMS DURING INDUSTRY SUMMIT
OCBC, in an effort to raise awareness of promising industries in Orange County, hosted Bio-Tech & Nano-Tech and Information Technology Forums last week. The forums were part of an Industry Summit Series which highlighted several industries making an impact on the Orange County market.
Moderated by OCBC's Dr. Wallace Walrod, the focus of the Bio-Tech & Nano-Tech and Information Technology Forums was workforce development. Having a properly trained and educated workforce ready to fill the growing job market in these areas is crucial to not only the success of these industries, but also to the recovery of Orange County.
The panelists for the Bio-Tech & Nano-Tech forum included Joseph Panetta, from BIOCOM, Adam P. Plesniak, from The Boeing Company, and Dr. Rania Nasis, from California STEM Cell, Inc.
Joseph Panetta did a great job of highlighting the “Life Sciences” industry which is rapidly growing in Orange County and all other industries are still experiencing difficulties because of the economic downturn. Yet, taking advantage of this industry is tough because it is constantly changing and adapting to new technologies. In order to support this industry, education needs to provide programs or curriculums directly related to the skills needed in this industry. Not just community colleges and universities should have programs but also K-12 should implement programs which combine basic STEM skills with communication and advanced sciences. BIOCOM currently has programs to help bring the Life Sciences industry into the classrooms including their Advancing Classroom Education in Science (ACES) program which aims to bring industry professional directly into the classroom to speak and educate K-12 students. They also provide an MBA program, the Professional Sciences Masters Degree, considered a “Next Generation” MBA which prepares professional for their employment in the Life Sciences industry.
Adam O. Plesniak and Dr. Rania Nasis reiterated the importance of establishing education and training programs to prepare a workforce to fill the life science positions. Not only teaching basic STEM, but focusing on communication skills so employees are able to better illustrate their ideas to their peers. A large problem identified by the panel was the fact that positions such as engineers have trouble communicating to clients or other professionals because they lack basic communication skills.
The panelists for the Information Technology Forum included Dr. Ralph Frid, from Cox Communications, Chris Harrington, from Toshiba America Information Systems, and Carol Flores, from Time Warner Cable.
The discussion followed the same outline as the Bio-Tech and Nano-Tech Forum where the main topic was workforce development. A need for continuous training programs to educate current employees on changing trends and developing technologies as well as programs which combine education of technical skills blended with customer service was highlighted by all panelists. Also, instead of mass-producing students in individual fields there needs to be an educational program focused on combining all aspects of business and technology to better prepare potential employees to deal with a wide variety of people. The currently education model is out-dated and while it may have worked decades ago there needs to be comprehensive restructuring of the education system to better prepare students.
One topic which brought about much debate was the role of businesses in the educational system and their needed efforts to support training programs, not only at the university level, but at K-12 levels as well. Businesses are in a place where they can provide education that would otherwise not be found in a traditional classroom curriculum and therefore should be implementing more programs where students are given hands-on training. Yet, businesses themselves are not enough to solve the inadequacies of the educational system. Again, the importance of a complete revamp of the educational system was highlighted and stressed as the main area of concern for preparing a qualified workforce for these growing industries. As technologies, businesses, and the business climate evolve and expand so should the education system to better support these industries in providing well-educated and communicable employees. In-house training programs, community colleges, universities, and especially K-12 schools need to keep up with the constantly changing market.
June 10, 2010
HEAR WHAT TOP OVER-40 EXECS THINK ABOUT THE UNDER 40-PROS
Lucy Dunn, President and CEO of Orange County Business Council, and other top executives talk about the "Under 40" pros in the business community for OC Metro's 40 Under 40 event.
June 8, 2010
ECONOMIC FORECAST: CALIFORNIA STATE BUDGET BLUES AND MORE IOU'S COMING?
Another summer, another budget battle in Sacramento. Even Drs. Jim Doti and Esmael Adibi, advisors each to Governor Arnold Schwarzenegger and State Controller John Chiang, reported at their mid-summer Economic Forecast last Thursday that the state's financial status continues to spiral downward with elected leaders failing to take the necessary steps for correction. Three recommendations: stop spending one time revenues for on-going programs; grandfather in existing pensioners but eliminate defined-benefit plans for defined-contribution plans to address unfunded pension obligations; and reform the initiative process so that no ballot measure could pass without a defined funding mechanism, eliminating the drain on the state's general fund. It is clear that, like Greece, California needs to adopt an austerity plan. This is the "new normal" embraced by the private sector in a tough economy, which the public sector has yet to accept.
On top of that, if the Legislature doesn't produce an honestly balanced budget (not one filled with gimmicks and unrealistic assumptions) California may be forced to issue IOUs for the third time since the Great Depression. In a letter to the Legislature, State Controller Chiang placed them on notice that sometime in late August or early September he will be forced to issue IOUs to mitigate a cash flow shortage.
According to Chiang, the State's cash flow is not beginning to rebound along with the general economy. The only reason the State isn't forced to issue IOUs now is the deferral of $4.7 billion in payments to K-12 education, higher education and local governments; and borrowing as much as $20 billion from special funds. Special funds (controlling air pollution, preventing oil spills, and lead poisoning in children) can only be tapped up to point that the statutory purpose of the fund is compromised. Critical to the state's cash flow planning will be the receipts in June, which accounted for more than 13% of all FY 2009-10 General Fund revenues.
It appears that issuing IOU's are California's unique way of "printing money" it doesn't have. For more info, contact Dr. Wallace Walrod or Lucy Dunn.
June 3, 2010
PENSION REFORM: THE TIME IS NOW
By Governor Schwarzenegger
California is in the midst of another painful budget season, where we are forced to make cuts to important programs and consider other extreme measures to close a $19.1 billion deficit. While there are many factors that led to this, we have clearly seen that the size of our state’s government has become unsustainable, and one of the primary reasons is the state’s pension system, which is in desperate need of reform.
For decades, California has been issuing billions of dollars of unfunded pension debt without the approval of voters, and then using accounting rules to understate the size of that debt, most notably in 1999 with SB 400, a monumentally bad bill which sailed through the legislature in a matter of minutes with little debate. Those lawmakers just assumed that a rising stock market would cover pension costs, but as we see today, they were wrong. As a result, recent studies by Stanford, the University of Chicago, and Northwestern estimate that our state now has $500 billion in unfunded pension debt.
The burden for these mistakes of the past unfortunately falls on education, higher education, public safety, and other programs whose budgets must be cut in order to service this unfunded debt. As hard as it may be to believe, state spending on retirement benefits this year is actually greater than state spending on UC and CSU. This is not right, and it shows poor priorities.
The pension system simply has to be reformed so we don't continue to divert billions of dollars from needy programs. Consider these numbers:
• State pension costs for CalPERS will be $3.5 billion in 2010-11, 2300% greater than in 2000-01.
• State pension costs for CalSTRS will be $1.2 billion, up 32%.
• State costs for retiree healthcare make be $1.4 billion, up 251%.
In fact, this year the state will spend more than $30 billion on employee compensation and benefits, up more than 60% over that same period. Had that spending grown at the same rate as revenues (18%), we'd have nearly $10 billion more this year to spend on higher education and other programs in desperate need of more funds.
We have received our wake up call, and we must act. It’s time to reform pensions, so that we do not keep writing checks that we cannot cash. We can’t do anything about the promises we have already made to existing state workers, but we can reform the packages we promise to new hires, so that they do not continue to handcuff our state for generations.
When I announced the May revised budget, I said that I would not sign a final budget that does not reform the state’s pensions, budget system, and tax code. If the reforms I have been calling for had been in place over the last 10 years, this year’s deficit would be $10 billion less. California will continue to see devastating budget cuts and calls for higher taxes until the system is reformed, so that is why I am taking this stand. This is the year for the legislature to finally take my call seriously, and make sure Californians have a government of the people, by the people, and for the people, not of the employees, by the employees, and for the employees.
May 28, 2010
WHERE OCBC STANDS: JUNE 2O10 BALLOT MEASURES
OCBC's Board of Directors has reviewed the five ballot measures qualified for the June 2010 election and has taken positions on them, after consideringthe recommendations of the Voting Members of the Advocacy and Government Affairs Committee, OCBC's policy positions and core initiatives. OCBC advocates the following:
Proposition 13 - Seismic Retrofitting Amendment - SUPPORT
Prohibits tax assessors from re-evaluating new construction for property tax purposes when the point of the new construction is to seismically retrofit an existing building.
OCBC supports this measure as it would enhance community safety with an added benefit of promoting construction and remodeling jobs.
Proposition 14 - Open Primaries - SUPPORT
The proposal will require that candidates run in a single primary open to all registered voters, with the top two vote-getters meeting in a runoff.
OCBC supports this measure as it is one component in the reform process needed to help elect more moderate politicians and reduce the extreme partisanship that causes legislative gridlock, which is detrimental to a positive and successful business environment.
Proposition 15 - California Fair Elections Act of 2008 - OPPOSE
Assess fees on registered lobbyists in California and uses the additional revenue to provide some funding for political campaigns for those running for the Office of the Secretary of State of California.
OCBC opposes this measure as it does not advance any real reform, it unfairly imposes a tax on a select profession’s constitutionally-protected right of First Amendment expression, and would create expensive legal challenges for the State from lobbyists and from potential conflicts with Prop 14.
Proposition 16 - Taxpayers Right to Vote Act - OPPOSE
Requires a city or special district that provides electricity to obtain the approval of two-thirds of the voters before expanding its service territory or providing new service to its customers if public funds are involved.
OCBC opposes this measure because its ambiguous language creates potential impacts to business operations of existing local publicly-owned utilities and could impair the delivery of electricity to current and future customers within existing service boundaries. Further, with the high voter threshold, the expansion of existing service boundaries could be cost-prohibitive, thereby making it difficult to make smart land use decisions or for an area to meet the service needs of its population.
Proposition 17 - Continuous Coverage Auto Insurance Discount Act - NO POSITION
Allows auto insurance companies to offer “loyalty discounts” to customers of other insurers who have not let their policies lapse for more than 90 days in the previous five year period.
OCBC has no position as this measure does not represent an issue related to its core initiatives.
Measure D - Right to Vote Amendment - OPPOSE
Click here to view the official press release from Citizens to Protect Mission Viejo
Supported Candidates:
Meg Whitman, Governor: Click here for OCBC press release
Carly Fiorina, U.S. Senate: Click here for OCBC press release
Senator Lou Correa, State Senate: Click here for OCBC press release
For more information on these candidates and ballot measures or on OCBC's position statements, please contact Kate Klimow.
May 24, 2010
OCBC LEADS DELAGATION TO STATE'S CAPITOL
Leading a delegation of nearly 30 business leaders representing a broad cross section of industries, OCBC executed its annual Sacramento advocacy trip this past week, the completion of its "One Voice, Two Capitols” advocacy strategy.
The timing was purposeful, right after the release of the annual state budget revisions from the Governor and reviewed by the legislature, making sure our elected officials heard--clearly and loudly--from the business community that the state's budget problems can not be shouldered by business alone. Reducing or eliminating deductions to solve budget problems translates into a direct tax increase for businesses. Frankly, additional tax increases in any guise will cripple California's struggling economic recovery and jobs creation. Yet, last week, State Senate Democrats rolled out a $4.9 billion package of proposed tax hikes on cars, alcohol, income and corporate profits. The budget negotiations begin another round with the Governor’s administration and Republicans vowing to oppose any tax increases.
The foundation for OCBC’s advocacy adventure was set by its guest speaker at the opening lunch, Jon Ortiz, the Sacramento Bee's reporter, columnist, and blogger of "The State Worker." Jon provided a perspective on the state bureaucracy known as "the state worker" and how staffing, salaries and pensions are intertwined with the budget.
Although the budget will overshadow nearly every action in the legislature for the rest of the session, there are other pressing issues that continue to impact the business community. California’s water crises is one of those issues, so MWD provided a briefing on its priority legislation and Delta issues so the delegation was up to speed on prior to our legislative meetings. A special thank you to Kathy Cole, Executive Legislative Representative for the Metropolitan Water District of Southern California, for that informative briefing.
With that, the team headed to the Capitol for meetings with Senators Tom Harman and Mimi Walters, and Assemblymembers Jeff Miller, Van Tran, Chris Norby, Jose Solorio, and Speaker pro Tempore Fiona Ma. A variety of issues were covered including legislative hurdles to expanding the 91 and SR 241, as well as threat to the enterprise zone and other business incentives. The afternoon session was wrapped up by Lt. Governor Maldonado who discussed the state’s new focus on economic development and his efforts to create a better political and business environment in a surprisingly frank and funny way.
For more informal problem-solving, OCBC hosted its annual legislative dinner at Spataro’s with a full house of heavy-hitters including Senate Minority Leader Dennis Hollingsworth, Assembly Minority Leader Martin Garrick, members of Senate Republican Caucus staff and Orange County’s legislative delegation. It was a wildly entertaining evening.
Despite the Capitol being in an uproar over the budget, OCBC was able to secure a private breakfast meeting with Assembly Speaker John Perez. He was candid in his assessment of the budget and asked the business community to…
Day two was the big meeting day as the delegation reviewed issues with State Controller John Chiang, the Governor’s Deputy Chief of Staff Fred Aguiar, Senate President Steinberg’s business policy consultant Mufaddal Ezzy, Senate Minority Leader Dennis Hollingsworth, Senator Lou Correa, Senator Bob Huff, and Assemblyman Curt Hagman.
A final session over lunch with Dan Schnur, one of California’s leading political analysts was the perfect cap to a great trip. He provided a framework for the upcoming election and helped end the trip on a high note – urging everyone to stay active and involved with our legislative leaders so that the positive changes we need can be made.
We could not be as effective as we are without the generous support of our sponsors: The Irvine Company, Metropolitan Water District, the Disneyland Resort, Auto Club of Southern California, Time Warner Cable and Michael Brandman Associates.
It was a busy time at the capitol and we vied for the attention of legislative leadership and Orange County’s elected delegation along with many other groups and associations. Thanks to the caliber of the OCBC delegation members, we were able to secure top-level meetings and deliver our key business messages. We were strongly supported by our Board Chair Linda Martin (Porter Novelli) and Chair-Elect Eddie Northen (UPS), as well as other members of the Board and general membership, to whom we would like to extend our most gracious thanks:
Ed Reno, Allergan; Hamid Bahadori, Auto Club of So California; Maryann Maloney Marino, Citizens Against Lawsuit Abuse; Diana Schneider, Central County Regional Occupational Program; Chris Lowe and Carrie Nocella, Disneyland Resort; Charles Smith, ICF International; Lacy Kelly, League of Cities, Orange County Division; Les Card, LSA; Norma Arias-Lee, MWD; The Honorable Dick Ackerman, Nossaman; Reed Royalty, OC Tax; Will Kempton and Kris Murray, OCTA; Bob Bein, RBF; RJ Mayer, The Robert Mayer Corporation; Kristy Hennssey, Time Warner Cable; Bill Burger, Transportation Corridor Agencies; and Liz Toomey, UCI.
Orange County remains a strong presence in the national and global economy, but the obstacles we face from a disconnected legislative body place California and Orange County at a competitive disadvantage. The active participation of the business community is vital to the success of OCBC's aggressive advocacy role and to sustaining a strong voice in the formulation of public policy that affects your business.
May 24, 2010
2010 OC WATER SUMMIT KEEPS WATER TALK FLUID
OCBC sponsored OCWD/MWDOC’s annual water summit at the Disneyland Hotel this month. A few highlights from the well-attended conference:
Chris Schmutte of the Metropolitan Water District of Southern California led an interesting discussion on the effect of sea levels rising and salt contaminating the Delta region of California. “Improving the levee system for millions of dollars would not solve the salt issue of rising seas,” said Schmutte. “By 2050, sea levels will have risen by 12 inches and it would take 9,000 Rose Bowls full of water to get the Delta region on an even plain with the risen sea. If salt were to contaminate the Delta, all of the water would be useless for drinking, irrigation, or as a suitable habitat for thousands of plants and animals.” He summed up his presentation by stating that the Delta is extremely important to California and the State needs to act now in order to preserve this fragile eco-system and supply of fresh water.
OCBC member Scott Maloni with Poseidon Resources gave an excellent presentation on the Huntington Beach Desalination Project. At no cost to the public, the facility would provide 50 million gallons of water per day to Southern California. The facility would ensure there is sufficient high quality water to meet the demands of Southern California. “Desalination used to be too expensive for cities and states to consider. But, as technology advances the prices have dropped dramatically and projects like these are now cost competitive,” explained Mr. Maloni. “Using existing infrastructure would significantly reduce construction costs as well.”
Scott’s most interesting point of his presentation was that the facility would use the discharged water from the Huntington Beach Power Plant to desalinate as an alternative to sucking up millions of gallons of water straight from the Pacific. “Fifty percent of Orange County’s water is imported and the goal is to replace all of that imported water with our own desalinated water,” said Maloni. “We are not going to be able to desalinate our way out of this water shortage; however we can start the conversation to our constituents and government agencies about Southern California’s local water supplies.”
“Water has been at the core of every great civilization for thousands of years,” said Author, Economist, and Forbes’ columnist, Joel Kotkin. “How do we accommodate the amount of water on this planet with our ever-growing population?” By 2050, there will be one hundred million more people on Planet Earth. With more people comes a demand for more food and agriculture, as well as water. This will provide the U.S. (especially California) with a giant opportunity to meet these demands. “Water has a very important roll in the Economic Development and sustainability of California,” voiced Kotkin. But, with California’s economic status faltering and an aging infrastructure, where do we start? “We need to get back to the basics,” stated Kotkin. “The cost to repair the aging infrastructure is steep, but with sensible development and maintenance it can be done.”
May 24, 2010
OC SUPERINTENDENT BILL HABERMEHL URGES LOBAL CONTROL OF EDUCATION FUNDING
Orange County’s top education leaders, representing a half million students and 55,000 employees, called today for lawmakers to give school districts local control over budgeting and spending to soften the impact of the state’s ongoing fiscal crisis and better ensure that students graduate from high school ready for work or college.
The Orange County District Superintendents’ Organization, which includes 28 district superintendents and the county superintendent of schools, held a press conference to unveil reform measures designed to permanently allow school boards and communities to determine spending priorities based on their most pressing local needs.
"As educational leaders, we want to be part of the solution to this budget crisis, as opposed to sitting on the sidelines," William M. Habermehl, Orange County Superintendent of Schools, said. "We’re not here to whine and moan. Instead, we’re here to offer specific recommendations to Sacramento and Washington for tangible economic relief without additional cost to our taxpayers. To get that relief, we need control at the local level."
As experienced chief executive officers, the superintendents are well situated to issue the call for reform. They oversee complex organizations that are operating at 2005 funding levels, while the cost of doing business has continued to climb. The superintendents estimate that from the 2008-2009 school year through 2010-2011, their budgets will have suffered a combined loss of more than $850 million—and counting.
"School districts are managing their money really well," Superintendent Habermehl said. "We are making the tough budget decisions that every other big corporation in the private sector is making. The difference is we can’t scale back on our main mission. We still have to continue offering a quality education to every child who walks through our doors."
Magnified by the dismal budget climate are myths and confusion surrounding the management of education dollars.
"If we are to gain the public’s trust in the reform plan we are presenting today, we know it is important to clear up the confusion and debunk the myths," the county superintendent said.
For example, school districts are sometimes viewed as being top heavy, when in reality administrative costs constitute only about 4 percent of education budgets, and California is ranked 47th nationally in the ratio of administrators to students. Another commonly held belief is that lottery funds contribute a significant amount of revenue, when the funds actually compose less than 2 percent of budgets.
Reform measures include:
Permanent Local Control Over Restricted Spending
Having to comply with the state’s extensive categorical regulations is burdensome and wasteful. Three-fourths of categorical programs are restricted, which mandates very particular programs and approaches, regardless of their appropriateness at the local level. While one of every three state dollars set aside for public schools is restricted, in contrast, all state charter-school funding is unrestricted and may be used for any purpose determined by the charter school.
The effects of ending funding restrictions could be rigorously assessed under the state’s current accountability system.
"Keep the accountability system, of course, but give us the spending authority essential to improving outcomes for students," said Dr. Gwen Gross, Superintendent of the Irvine Unified School District. "Currently, we are held accountable for student achievement, but are not given the responsibility and total authority over the allocation of all resources."
Restricted programs for which local control is essential include:
- Economic Impact Aid (funding for students who are educationally disadvantaged due to language proficiency or poverty)
- K-3 and 9th Grade Class Size Reduction
Overhaul of State and Federal Mandates
School districts are responsible for fulfilling dozens of state-ordered mandates. In February, the independent California Legislative Analyst’s Office (LAO) called for an overhaul of this system, after determining that inefficient state-ordered programs cost $400 million annually and burden the state with billions in unpaid reimbursements to school districts.
The deferral of mandate payments means that in the 2009-2010 state budget, the state gave $41,000, or $1,000 per mandate, to each district to carry out the required activities. "Despite receiving virtually no funding, districts must still perform the activities required by each mandate," the LAO report stated.
"Now is absolutely the time to end this nonsensical practice," said José Banda, Superintendent of the Anaheim City School District. "We have long maintained that it is unfair to be required by Sacramento to carry out a nonessential task and not even receive the proper amount of money to conduct the task."
School districts should be given block grant revenues to perform essential mandates, and if the state does not fund a mandate, districts should not be required to report on it, or carry it out. In addition, new mandates should not be added unless they are fully funded.
Another vastly unfunded mandate that has giant financial ramifications is special education services required under the federal Individuals with Disabilities Education Act. Last year alone, Orange County’s share of unfunded special education mandates was $321 million, forcing money to be shifted from general purpose funds to make up the difference for these important programs.
The superintendents are asking Congress to support a five-year pay down of its 40 percent share of the cost of providing such services.
"Without question, we believe every special education student deserves the best possible education. We also believe the federal government should be paying its share," said Superintendent Gregory Magnuson of the Buena Park School District. “Every year, Congress considers legislation in this area, but never seems to get around to putting through an apportionment to pay for it. If the federal government is unwilling or unable to come up with a pay-down plan to bring us up to the 40 percent guaranteed level, then we need relief from the regulations and mandates for which they are currently holding us accountable.”
Because federal special education laws now largely overlap with state laws, any duplicative mandates should be eliminated since federal requirements already offer the necessary protection.
According to the superintendents, additional funding reform measures that would increase student achievement and performance include:
- Being able to use Title I funds, which are earmarked for economically disadvantaged students, for district reform efforts, including establishing career pathways and early-childhood education articulation
- Offering funding to Program Improvement schools for addressing the achievement gap and increasing college readiness, instead of tying funding to sanctions
The superintendents acknowledge that their reform agenda is ambitious, yet maintain there has never been a more urgent need for reform.
"If not now, when?" asked Habermehl. "Currently, California not only determines school district revenue levels, it determines what the dollars are spent on more than in other states. Today, more than ever, the money going to school districts should be much more closely tied to the needs, costs, and preferences of local residents. It is the best method for ensuring the future success of all students."
Additional resources: Bill Habermehl's Presentattion | OC Schools Categorical Funding | Special Education Encroachment
May 11, 2010
OCBC'S OCMOVES GETS STATE, NATIONAL AND GLOBAL PORT PERSPECTIVE
Douglas Thiessen, Managing Director of Engineering at the Port of Long Beach, was the guest speaker at the OCMoves Committee meeting last Friday. Mr. Thiessen gave an outstanding presentation on the Port of Long Beach and how important goods movement and the Port are to our nation’s economy. “The Port of Long Beach is the second biggest U.S. cargo container seaport and the fifth busiest complex in the world,” said Mr. Thiessen. “$40 Billion worth of trading and goods travels through Orange County every year, which creates over 300,000 regional jobs. One shipload of imports, can FILL South Coast Plaza with clothes and shoes, 8-feet-high, wall-to-wall.” Each day the Port hosts dozens of ships, handles 5,000 truck trips (10% of which are to and from Orange County), and manages over 50 trains.
Mr. Theissen went on to explain that “one of the leading economic forecasts trends is the movement of cargo in and out of ports and half of all United States imports arrives and passes through the Port of Los Angeles and Long Beach. It is imperative that these ports maintain their strong positions in the global trading industry.” Southern California is a major marketplace for imports and exports and with the one billion square feet of distribution centers in the Inland Empire, it is no wonder why the Port of Long Beach is as successful as it is.
“The Port is very fiscally strong and is ready to invest $2.9 Billion in terminal and environmental improvements,” stated Thiessen. “We have adopted the Clean Air Action Plan, as well as the Clean Trucks Program, which will reduce air pollution by 45% and truck pollution by 80%.” Along with environmental improvements, the Port will begin the Middle Harbor redevelopment, a $750 Million project to increase efficiency and triple Port’s capacity and the Pier S terminal project, a $650 Million redevelopment of former oil field that would serve as a 160-acre containment terminal. Perhaps the most important renovation plan however, is the 18-mile expansion of the I-710 Freeway for trucks. “There has always been a problem with transporting the goods from Long Beach to the Inland Empire warehouses via I-710,” Mr. Theissen concluded. “With this expansion, we would hopefully relieve some of the traffic and heavy truck presence on that freeway.”
Peter Buffa, a member of Orange County Transportation Authority’s (OCTA) Board of Directors, also spoke at the meeting in reference to the lack of federal funding goods movement receives. He shared his thoughts on getting a line item specifically for goods movement in a federal reauthorization funding bill. “We need an alliance between transportation agencies and ports in order for our voices to be heard in Washington, D.C.,” stated Buffa. Unfortunately, goods movement does not always get the federal funding required to improve the means of transporting imports and exports in and out of ports. This can cause a lack of efficiency and, over time, hinder the amount of goods being transported.
March 23, 2010
OCBC OPPOSES THE CURRENT HEALTH INSURANCE REFORM BILL--AMENDMENTS OR REPEAL?
On Sunday, The U.S. House of Representatives passed H.R. 3590 and H.R. 4872 on a strict partisan vote, winning final approval of legislation that expands the nation's health-care system coverage to 32 million people and attempts to contain spiraling costs.
Many provisions of the Senate bill would be altered by a separate package of amendments that the House also approved Sunday, by a vote of 220 to 211. That package now goes back to the Senate under special rules, known as reconciliation, that protect it from a Republican filibuster and requires only 51 Senators to pass it. President Obama has indicated he will not wait for the reconciliation action to take place and will sign the original legislation on Tuesday. Although Senate Democrats added in 161 business friendly amendments to the final bill that included: allowing individuals, small businesses, and trade associations to pool together and acquire health insurance at lower prices, the same way large corporations and labor unions do; giving states the tools to create their own innovative reforms that lower healthcare costs; there was no tort reform; and, allowing families and businesses to buy health insurance across state lines, the bill will be a hefty financial burden to California and taxpayers.
OCBC opposed the bill and its provisions that shift the cost burden of a new government health care plan to key industries in California's economy. Businesses such as medical device, bio-tech and pharmaceutical companies should not be punished with higher taxes or mandates when they are advancing health care through new treatments and products. Funding thousands of new federal positions, including an IRS for enforcement of health insurance purchases is particularly troubling. Growing government jobs does not grow the national economy.
Many of the new taxes included in the health care bill will significantly increase already high tax burdens in a state with some of the highest tax bills in the country. A new 3.8% tax on all investment income means that the capital gains tax rate (including California state tax) will rise to 33.9%. The tax on dividend income will rise from 15% today to 53.7% including California tax. The new tax would apply to income from interest, dividends, annuities, royalties, capital gains and rents for individuals who earn more than $200,000 annually and joint filers reporting more than $250,000, according to the legislation. The first-time Medicare tax on investment income would start in 2013.
Every Congressional representative from Orange County voted "NO" on this bill except Rep. Loretta Sanchez. Both Senator Diane Feinstein and Senator Barbara Boxer supported the bill.
OCBC is tracking the bill which is currently in the Senate. The Parliamentarian is hearing arguments from Senate aides of both parties about whether a reconciliation health bill should be ruled out of order because of its potential effects on Social Security. Should he find in favor of the Republican challenge, the entire reconciliation bill could be thrown out. OCBC expects significant litigation and challenges to this bill making implementation hard to predict at this time.
For more info, contact Alicia Berhow.
Click here to see a summary of the bill's provisions by the U.S. Chamber of Commerce.
March 22, 2010
OCBC WRAPS UP DC TRIP, REPRESENTS ORANGE COUNTY
Orange County’s business community was well represented in Washington, D.C. this past week with a delegation representing a cross-section of Orange County’s industries and economic sectors. Our purpose was to bring Orange County’s business issues and concerns to the doorstep of our Congressional members, advocating for Orange County’s priority issues including: finance, public safety, federal stimulus funding, and infrastructure, including transportation, energy and water projects.
As part of the program, OCBC is collaborating with “Southern California on the Hill”, comprised of more than 20 business organizations and more than 200 civic and business leaders throughout southern California to co-host several events to promote major regional issues.
After an informal gathering on Monday night to meet, mingle and network with the other Southern California delegates, the entire 220 California delegation met formally for breakfast. OCBC's own Board Chair, Linda Martin, kicked off the event with welcoming comments to the entire delegation before turning the podium over to California’s senior senator, U.S. Senator Dianne Feinstein. Senator Feinstein directed most of her comments to the highlighted issue of last week, health care reform, but not before giving a shout out to the Orange County Business Council!
Regarding health care, Senator Feinstein commented that Congress was about to “vote, without actually voting” – in reference to the “Deem and Pass” maneuver – and she felt it was disrespectful to the public to not take an actual vote on such an historic issue. She continued on with comments focused on the federal budget and entitlement programs, although the Orange County delegation noticed a bit of a disconnect between the Senator’s comments – lamenting entitlements – and the power of the Senate to actually make changes to those programs. Not to mention the impending passage of a significant new entitlement program instituted by the health care legislation.
With Linda Martin at the lead, the hearty band of advocates began a day filled with meetings including time with Congresswoman Linda Sanchez, Congressman Gary Miller, Congressman John Campbell, Congressman Dana Rohrabacher and Congressman Ken Calvert. OCBC’s Dr. Wallace Walrod highlighted the disparity in per capita spending from ARRA funding (economic stimulus effort) for Orange County than the national average, which laid the groundwork for discussions related to transportation and infrastructure projects, requests for regulatory relief, and targeted requests for support on The Hoover Power Allocation and funding for the National Urban Search and Rescue (US&R) program. Detailed briefing books on all issues related to OCBC’s core initiatives were provided to each member.
Some members had the opportunity to enjoy a luncheon with Republican Leadership, hosted by Arizona Senator, and Republican Presidential Nominee, John McCain. Others also attended a special California delegation briefing with Senator Barbara Boxer.
The entire Southern California delegation met back up in the evening for a focused reception, “Transportation – California’s Economic Recovery Engine” hosted by California transportation leaders, OCBC, Chambers of Commerce and other business organizations. It was a well-attended reception and drew many congressional members and staffers.
OCBC was proud to host its legislative dinner at the DC Coast, presented by our generous sponsors: Orange County Professional Firefighters Association, Southern California Edison and The Robert Mayer Corporation and Parsons. We were honored to have three congressmen join us for dinner, OC’s Ed Royce and Congressman Dana Rohrabacher, as well as Bill Shuster (R-PA), who is the Ranking Republican Member on the Transportation and Infrastructure's Subcommittee on Railroads, Pipelines and Hazardous Material, which has jurisdiction over everything involving rail transportation, from Amtrak to cargo, employee contracts, and rail security. It was a festive evening, made more so by the unique joke-telling of one of our guests.
Day two started out with another big delegation breakfast, this time with Valerie Jarrett, Senior Advisor to the President of the United States, as the special guest. She too focused her comments on health care – or rather, health insurance reform, assuring her audience not to be put off by the process or the words used to describe the program.
Following breakfast was another busy day on the Hill in meetings with Congresswoman Linda Sanchez (regarding a specific issue related to Orange County pension reform and the IRS), Congressman Dennis Cardoza, regarding California’s water crisis, Congressman Ed Royce, Congressman John Mica, and a (Ranking Republican on the House Transportation and Infrastructure Committee), and a Legislative Fellow with Congressman Darrell Issa’s office regarding extension of SR-241.
In between, the delegation stopped for a lunch that featured the Chief of Staff for Congresswoman Loretta Sanchez as well as Dena Bunis, the OC Register’s Washington Bureau Chief. Be sure to read her posting in the Register’s “Total Buzz” blog, “OC biz council in DC: Want stimulus bucks”
It was a successful trip made possible by the active participation of our delegation, to whom we would like to extend our most gracious thanks:
Fred America, RBF; Tony Bedolla, OC Professional Firefighters; Peter Buffa, OCTA; Jo Ellen Chatham, Southern California Edison; Maureen Hayes, Parsons; Will Kempton, OCTA; Linda Martin, Porter Novelli; RJ Mayer, The Robert Mayer Corporation; Kris Murray, OCTA; Julie Puentes, Hospital Association of Southern California; and Art Yoon, Cox Communications.
Your participation is vital to the success of OCBC's aggressive advocacy role and to sustaining a strong voice in the formulation of public policy that affects your business. We encourage you to join us in Sacramento for part two of our “Once Voice, Two Capitols” advocacy effort, May 17-18, click here for more info.
January 12, 2009
OCBC APPLAUDS GOVERNOR'S SOLID PATH TO JOBS CREATION--ENCOURAGES MORE
With a nod to the good intentions of every New Year's resolution, OCBC commends the Governor for his comprehensive plan to put California back on the road to recovery and focus first on jobs creation. OCBC supports the California Jobs Initiative and, in particular, jobs training and the new hire credit but encourages more of the good thinking behind the Governor's proposals--especially with a looming $20 billion state budget hole to fill caused by a decrease in state revenue, failed budget "fixes" from last year, litigation losses incurred by the state and other economic disasters.
"There's a lot of money already going to job training right now," said OCBC President and CEO Lucy Dunn. "What we need are actual jobs! With jobs, folks pay taxes, businesses grow, revenue flows to the state. To accomplish this, California needs to clean up its regulatory morass and make it easier to do business."
That means more regulatory reform concepts to include things like CEQA streamlining applied to all infrastructure projects, including a comprehensive state water project system and AB32 and SB375 exemptions for roads, water, and housing projects. Most importantly, it means more job creation incentives, like Enterprise Zones --which give tax credits to businesses that hire the unemployed-- applied statewide.
"If I were queen of the world, I would make the whole state an enterprise zone," added Dunn. "I know businesses would respond to that. It attracts businesses and grows businesses."
Lastly, the OC local economy will not escape the state budget mess. We expect hits to local Prop 10 dollars and local government funding.
or more information, please contact Kate Klimow.
January 12, 2010
CALIFORNIA INCREASES COMPETITIVENESS IN RACE TO THE TOP EDUCATION REFORM
Sacramento took a bold step last week, passing the final legislation needed to ensure California's eligibility for the Obama Administration's Race to the Top funding. President Obama set aside $4.3 billion to distribute to states that demonstrate real education reform and target improvement in the lowest performing schools. The legislative package passed recently by the Legislature and signed by the Governor helps to make California's application highly competitive for up to $700 million of this funding.
Among the key elements of the legislation are: a) linking teacher and principal evaluations to student performance; b) giving more power to parents with children in the worst-performing schools, enabling them to transfer their kids to a better school in the district or in another school district; c) empowering parents at poor performing schools to force changes in school operations; d) along with other measures to turn around low-performing schools.
The process began with Governor Schwarzenegger calling a special session and introducing a bi-partisan legislative package. One of the Senate bills introduced as part of the package was recently split into the two bills that were signed into law by the governor last week: SBX5 1 introduced by Senate pro Tem Darrell Steinberg (D-Sacramento) and SBX5 4 by Senator Gloria Romero (D-Los Angeles). The state is now set to apply for the first phase of RTTT funding with an application deadline of January 19, 2010. The competition for these federal funds presents a significant opportunity for California's education system by offering the financial assistance to make improved and innovative changes.
OCBC was actively involved in advocating for education reform legislation that would improve California's application for the federal funding. With school districts already suffering from severe budget cuts and the state looking at another budget shortfall this year, this RTTT legislation was an imperative. Growing a talented, well-educated workforce is critical to Orange County's economic prosperity. Improving California's education system through these reforms is helping to put California back on the path to recovery and to improving the future prospects of our students, businesses and our economy.
For more info, please contact Alicia Berhow.
