Some Employee Scheduling Flexibility Now Available

(March 3, 2009) Economic stimulus measures and good government reforms are included in the final state budget package approved by the Legislature on February 19.

The budget compromise for closing an estimated $42 billion state budget deficit includes $15 billion in spending cuts, $12.5 billion-$12.8 billion in temporary tax increases and $11.4 billion in borrowing. About $1 billion is set aside for a budget reserve.

California Chamber of Commerce President Allan Zaremberg called the adopted budget “a painful but necessary response to the economic recession and years of living beyond our means. California needed this plan to avoid going over a financial cliff.”

The compromise plan, he said, is “a balanced approach that includes deep cuts and does not use new revenue to grow government. In fact, this solution will shrink state government and roll back state spending to 2006 levels.”

Economic Stimulus

Economic stimulus measures in the budget package include:

• Employee scheduling flexibility. Legislation in the budget package offers greater flexibility in employee scheduling by permitting an employee, with the employer’s approval, to move from one alternative workweek menu option to another on a weekly basis. The legislation also states that a “work unit may consist of an individual employee as long as the criteria for an identifiable work unit in this section is met.”
• Incentives for job creation in California. A permanent elective, single sales factor will allow companies to weight sales made in a state (versus property or payroll) to determine corporate taxes.
• Environmental permit streamlining. In addition to an exemption from the California Environmental Quality Act (CEQA), permit process streamlining is granted for $1.4 billion in transportation projects through 2010 and for surplus state property.
• Public-private partnerships. These are allowed for transportation projects until 2017, enabling more jobs to be created more quickly.
• Design-build authority. This is permitted for 10 state transportation projects, five local transportation projects, five offices, courts and prison projects and 10 local redevelopment agency projects, again meaning faster and more cost-effective construction of projects.
• Tax incentives for television/movie production. These will encourage projects to be produced in California.
• Carl Moyer Program changes. Changes will provide incentives for faster turnover of agricultural equipment.

Reforms

• “Rainy day” fund/spending cap. A constitutional amendment subject to voter approval sets aside a set percentage of annual general fund revenues, plus additional revenues from good times in a “budget stabilization fund” to be tapped in leaner times. The measure also caps spending based on a 10-year trend in revenue.
• Open primary. A constitutional amendment to be presented to voters for approval will permit voters to choose from among all candidates, regardless of party affiliation, on a primary election ballot, with the top two vote recipients appearing on the general election ballot.

Other Provisions

Another constitutional amendment to be submitted to voters for approval will prevent state-elected officials from receiving pay raises during years when there is a budget deficit.

Revenue increases to protect essential and necessary services include temporary increases in broadly based taxes: the state sales tax, vehicle license fee and personal income tax, plus a reduction in the dependent tax credit.

The CalChamber has been advising policymakers for months to avoid targeted tax increases or extending the sales tax to services, noting that both would hurt the economy, the targeted industries and the ability of businesses to create jobs.

Staff Contact: Marc Burgat