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    May 19


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    The Governor has release an updated version of his proposed budget originally submitted to the Legislature in December.  Known as the “May Revise,” the budget plan for 2017–18 exhibits restraint on new spending with a warning from the Governor that the economic recovery won’t last and uncertainty in Washington adds to unpredictability in California’s budget outlook.

    According to the Governor’s news release, the state’s Rainy Day Fund will end the 2017–18 fiscal year with a balance of $8.5 billion, 66% of the constitutional target of 10% of tax revenues

    By the time the budget is enacted in June, the release points out, the California economy will have completed its eighth year of expansion, two years less than the longest recovery since World War II.

    Here are some of the Budget Highlights:


    • More Funding for Schools:Due to the slightly improved fiscal outlook, the May budget increases funding for K–12 schools by about $4,058 per student over 2011–12 levels.


    • Reducing Pension Liabilities:The Governor proposes a $6 billion supplemental payment to the California Public Employees Retirement System (CalPERS) with funds borrowed from the Surplus Money Investment Fund, part of the state’s short-term savings account. The payment is estimated to save the state $11 billion over the next two decades while continuing to reduce unfunded liabilities and stabilizing state contribution rates.


    • Transportation System Funding:The May revise reflects the first $2.8 billion in new funding from the $54 billion transportation package adopted earlier this spring, plus enhanced oversight of the California Department of Transportation.


    • Restored Child Care Funding:Instead of the one-year delay in providing rate increases to child care providers as proposed in January, the May revise proposes restoring the funding and maintaining the $500 million child care package from the 2016 budget.

    The nonpartisan Legislative Analyst’s Office (LAO) reported its estimates of state General Fund revenues and transfers are just slightly above the administration’s – close to $900 million over three fiscal years.

    The difference, the LAO said, is due to its higher estimates of personal income tax and sales-and-use tax revenues, offset by lower estimates of corporation tax revenue.

    The LAO said the Governor’s proposal for the additional CalPERS payment is a “very new idea” that “has promise,” but suggested the Legislature wait to finalize the plan until later in the legislative session to allow time to make sure the plan works and fully maximizes its potential benefit for the state

    The changes are currently being reviewed by the Legislative Budget Committees.  Click here for full information on the Proposal.

    May 19


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    The Governor has signed SB 130 (Committee on the Budget) which expands the existing Vehicle License Fee Adjustment to the cities of Eastvale, Jurupa Valley, Menifee and Wildomar, allowing them to receive millions of dollars in additional property tax revenue.  This is an idea that has been championed by Senator Richard Roth (D-Riverside) for the last few years.

    “With this bill, millions of tax dollars will flow to benefit the people of Eastvale, Jurupa Valley, Menifee and Wildomar,” said Governor Brown. “Senator Roth and Assemblymember Cervantes pushed hard to ensure these communities weren’t left behind.”

    Based on Department of Finance estimates, these cities are expected to collectively receive up to $19 million in additional funding annually. This revenue will help these cities fund critical needs.

    This is an issue that many of our members in Riverside County have been working on and advocating on behalf of for several years.  On their behalf, we thank Senator Roth for his tenacity in pursuing this change and the Governor for signing the bill.

    May 19


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    In a process that has taken well over a decade, Los Angeles County has released the Draft EIR for Tejon Ranch’s master-planned community, Centennial, on the south side of the Ranch.  Centennial is a master-planned community of 19,333 homes of all types, and 10.2 million square feet of retail/commercial/Industrial development, with 6,700 acres developed and 5,600 acres preserved as open space in the Antelope Valley.

    The project complies with the Los Angeles County Antelope Valley Area Plan (AVAP), and furthers the implementation of the Tejon Ranch Conservation and Land Use Agreement of 2008, where the Ranch will set aside 240,000 acres in conservation easements, while developing roughly 10-percent of our total 270,000-acre landholding.

    This is a great example of a modern and well thought out project that will provide housing and 30,000 permanent jobs and a $31 million surplus to LA County.  CONGRATULATIONS!

    Click Here to read the full press release.

    May 19


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    A bill with multiple tax hikes on businesses and identified as a “Job Killer” by the Cal Chamber, passed a major hurdle this week on a party line vote in the Senate Governance and Finance Committee.

    SB 567 (Lara; D-Bell Gardens) significantly increases taxes on California businesses, who already have one of the highest tax burdens in the country.  The bill targets family-owned businesses that transfer the business upon death to other family members. Under SB 567, the family members who inherit the business/property, would be forced to pay capital gains on the property that has appreciated in value, if the family member(s) have an adjusted gross income of $1 million or more.

    This change would take California out of conformity with federal law, and place another layer of taxes on a small group of Californians paying the highest personal income tax, at 13.3% and will have an overall negative impact on the state’s economy, jobs, and set a terrible precedent.

    We will continue to oppose the bill as it moves forward.

    May 19


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    Today representatives from commercial and residential real estate groups came together with experts from local government and arts groups to discuss how to create more and safer live-work artist spaces in California urban areas.  Unfortunately, this discussion has been spurred by the tragedy in Oakland known as the “Ghost Ship Fire,” but hopefully good policy will come out of the discussion.

    Staff from the Senate’s Governance and Finance Committee are working with a broad range of stakeholders to identify ways the state can help local governments, building owners, and artists create safe and affordable spaces.  Ideas ranging from changes in CA complicated code structure to providing local governments with “model codes” have been discussed.  We will keep you posted and would welcome ideas.

    May 19


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    We are very pleased to report productive conversations with Senator Wiener (D-San Francisco) regarding his bill SB 71, a bill that is looking to better enable adoption of solar in residential and commercial settings.  Although this early version of the bill gives some of our members heartburn because it seems to unintentionally undermine the codes process in order to mandate solar in statute, through communications with Senator Wiener and his staff, we are hopeful our issues can be addressed.

    Strict solar requirements are heading our way. This is California, afterall.  So addressing some policy issues ahead of time is a priority for our industry and we are pleased Senator Weiner is engaging in such a thoughtful manner.

    May 5


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    Kudos to our allies at the California Building Industry Association (CBIA) – the past six months have seen two big victories in the housing column – first the passage of the school construction bonds by the voters of California in November and most recently stopping the legislative effort to make all new housing construction in California be built at prevailing wage costs. Both of these are positive steps to creating more affordable housing in our state.

    May 5


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    We don’t share a lot of op/eds by California politicians, but this one by Assemblymember Raul Bocanegra (D-San Fernando) just seems to make a lot of sense so thought we’d share:

    For years, economists, business leaders and policymakers warned that the decline in blue-collar manufacturing jobs in California would leave us with a shrinking middle class, limited economic mobility and a plethora of social ills traditionally equated with systemic poverty.

    A recent report by the Los Angeles Economic Development Corporation demonstrates that those warnings have become a reality.

    Since 2007, the loss of our manufacturing base has cost Los Angeles nearly 89,000 good-paying middle-class jobs. Those jobs have been replaced with service-sector jobs that pay less than half of the jobs they replaced. At the same time, Los Angeles County has seen poverty rates climb, the middle class shrink, housing affordability grow beyond the grasp of working people, and homelessness hit crisis proportions. Our “middle class” is slipping away into a world of haves and have-nots.

    Even more troubling is the clear racial and ethnic components of the growing class divide. As we become more racially diverse, we are also becoming more segregated by class. Latinos have emerged as the largest ethnic group in California at precisely

    Click here to read the full op/ed.

    May 5


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    Well, you know how the saying goes.  SB 584 by California Senate President pro Tem Kevin de León implies that you can do a lot more to save and reduce Global Warming. A day after releasing a plan that would make California’s cap-and-trade program even less appealing to market-based solutions, Democrats in the Senate are introduced a proposal that calls for 100 percent of the retail electricity sold in the state to come from renewable energy sources by the end of 2045.

    Requiring all of the State’s energy come from less efficient sources such as wind and solar means your bill will go up.

    But wait, there’s more…

    In addition to upping the total amount needed, the bill also shortens the timelines to hit interim targets along the way that became law under de Leon’s Senate Bill 350 in 2015. That bill dictated that 50 percent of California electricity must come from renewable sources by the end of 2030, which the proposal bumps up five years to the end of 2025.  That bill also dictates that existing buildings in California (as a whole) must become twice as energy efficient.

    Many worry that all the “savings” you and/or your tenants purportedly get by investing in energy efficiency is simply getting re-directed to higher cost energy and that all of this is hitting small businesses that can least afford it the most.

    May 5


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    We are happy to report that the Dual Agency Ban Bill, AB 1059 (Gonzalez Fletcher), has been pulled from the Assembly Judiciary Committee docket and we have been told by the author’s staff that she will not pursue the measure further right now (but that it may be revisited over the Interim Recess or next year).  This is great news and we appreciate the fact that Ms. Gonzalez Fletcher has chosen not to move forward with this bill.

    Right now is a good time to breathe a sigh of relief, and take stock of where we are on the issue – but we want to be clear that the war is not necessarily over.  However, we can assume the sponsors of this bill will likely continue to press this issue and we should work to communicate about the benefits of dual agency with policymakers, clients, and the public at large.

    On this bill, we saw a mobilization of our industry unlike any we have seen in several years.  In a coordinated effort through the CBPA office in Sacramento, local chapters of NAIOP, BOMA, AIR and members of ICSC and individual members of CBPA across the state worked quickly to educate our own members and potential allies about the negative impacts of the bill and shared our concerns with Assemblymembers and their staff.

    And to find a positive in the midst of a storm, this was actually a great opportunity for our industry to work with legislators and their staffs and discuss the differences between residential and commercial transactions and why the State treats them separately in statute and how Dual Agency was being mischaracterized by the sponsor of the bill.  This type of education is very important and helps lay positive groundwork and builds trust for success on other commercial real estate issues.

    We will continue to watch for activity in the Legislature while working with local chapters, associations, and companies to provide a “roadmap” to continued education of policymakers and the public about our industry.  But this bill may come back early next year and we need to be ready.

    Until then, thank you to the hundreds of companies and individuals that stepped up to meet this threat to our industry.

    May 5


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    Our industry is part of a coalition that strongly supports AB 600 (Cooper; D-Elk Grove) and SB 600 (Galgiani; D-Stockton) two bills that encourage manufacturing investment in California by extending the existing partial Sales and Use Tax Exemption (STE) creating a more powerful incentive for manufacturing and R&D investments in California.

    These bills build upon the 2013 Governor’s Economic Development Initiative (GEDI) to encourage manufacturing investment and job creation in California. Extending the STE provides greater certainty that California is committed to manufacturing industry growth and promotes higher levels of investment.

    California manufacturing is critical to the overall economy because manufacturers create high-paying jobs that help mitigate the growing income inequality that exists in California and helps rebuild the middle-class. In 2016, the average manufacturing wage was $86,000 annually, well in excess of the state overall average wage of $62,000. As California attracts more manufacturing jobs to the state, the middle-class grows, communities are strengthened and state tax revenue grows from all sources.

    Both bills face a big test in committee next week and we will be there to support them!

    May 5


    Posted by CBPA | No Comments

    We are very pleased to report productive conversations with Senator Wiener (D-San Francisco) regarding his SB 71, a bill that is looking to better enable adoption of solar in residential and commercial settings.  Although this early version of the bill gives some of our members heartburn because it seems to unintentionally undermine the codes process in order to mandate solar in statute, through communications with Senator Wiener and his staff, we are hopeful our issues can be addressed.

    Strict solar requirements are heading our way. This is California, after all.  So addressing some policy issues ahead of time is a priority for our industry and we are pleased Senator Weiner is engaging in such a thoughtful manner.