CalChamber Opposes “Virtually Permanent” Prop 30 Tax

With the California Chamber of Commerce announcing yesterday that it will oppose the Proposition 30, income tax extension, the question arises if a campaign will come together to match the financial firepower that the teachers, medical professionals and other public employee unions bring to the table in support of the measure.

Officially, the word from the Chamber is that it is opposed to the extension but nothing has been announced about a potential campaign … yet.

Proponents of the 12-year income tax extension filed signatures recently to get the measure on the ballot.

CalChamber noted in the release announcing opposition to the initiative that it did not oppose Proposition 30 in 2012. The measure was supposed to be temporary to deal with a financial crisis.
However, CalChamber declared that the extension would make the tax “virtually permanent, even when the state’s budget is balanced.”

The Chamber’s announcement comes on the heels of word from the California Business Roundtable (CBRT) that the decision to organize a campaign in opposition to the Prop 30 extension will depend on actions taken by the legislature on business issues.


Rob Lapsley, President of the California Business Roundtable (CBRT)

Rob Lapsley, President of the California Business Roundtable (CBRT)


CBRT president, Rob Lapsley, told the Sacramento Business Journal that the Roundtable will watch if the legislature tackles health care and education reforms along with specific bills of interest to the business community such as the requirement to give employees a seven days notice before changing work shifts.
Lapsley emphasized that the Roundtable’s decision would also rest on how the Prop 30 extension may impact the state’s economic health.

One issue the CalChamber raised in opposition to the extension was the problem of revenue volatility tied to higher income taxes. The Chamber feared significant reduced revenue to the state during future recessions.

Keeping the higher income tax rates for income over $250,000 could also hurt small businesses that pay taxes through the business owners’ income. In a recent BizFed poll in Los Angeles County, a key finding was that “personal income taxes have the most impact on small business (of 100 employees or less).”

Will concern from the business community over the Prop 30 extension effort gel into a campaign to stop the initiative that will be backed by millions of dollars in union support?

About the Author: Joel Fox is Editor of Fox & Hounds and President of the Small Business Action Committee. This article originally appeared in Fox & Hounds and appears here with permission.

Union Files Lawsuit Exploiting ObamaCare in California for Organizing Purposes

Add ObamaCare to the list of laws that California unions are exploiting for “corporate campaign” strategies to coerce labor agreements or exert pressure during labor disputes.

On September 4, 2013, the National Union of Healthcare Workers sued the California Health Benefit Exchange to boot Kaiser Permanente from the list of 12 health plans approved for participation in the exchange. Unions are abusing the California Patient Protection and Affordable Care Act, which implements the federal Patient Protection and Affordable Care Act (ObamaCare) in California and sets standards for health plans to qualify for participation in the program.

A copy of the lawsuit – National Union of Healthcare Workers v. California Health Benefit Exchange – is available on the National Union of Healthcare Workers web site. Here are excerpts from the September 9, 2013 announcement from the National Union of Healthcare Workers claiming their motivation for the lawsuit:

NUHW Sues California’s Healthcare Exchange to Protect Patients

Earlier this year, Kaiser Permanente was cited for numerous serious deficiencies by the California Department of Managed Healthcare (DMHC) in areas critical to providing effective patient care in its mental health services, including its failure to ensure clinically appropriate care to Kaiser enrollees.  In June, the DMHC took the unprecedented step of fining Kaiser $4 million, the second highest fine in the agency’s history.

Despite notifying the Exchange twice in writing regarding Kaiser’s serious deficiencies, the Exchange never replied to our concerns, and, we believe, in violation of federal and state law and its own regulations, contracted with Kaiser as a plan to be offered when Obamacare is soon implemented.

Our goal is simple: before Kaiser is allowed to enroll thousands more patients through Obamacare, it should demonstrate to the DMHC that it can take care of the millions of Kaiser patients who are already paying Kaiser for their care…I want Kaiser to provide the highest quality care possible, rather than focusing on how to increase Kaiser profits at the expense of patient care.

Business publications were not fooled. In reporting the lawsuit, the San Francisco Business Times observed that the National Union of Healthcare Workers “last April lost a ‘do-over’ election to represent 45,000 workers at Kaiser Permanente.”  A September 5, 2013 article in the Sacramento Business Journal about the lawsuit (Union Seeks to Block Kaiser from Health Benefit Exchange) noted that the National Union of Healthcare Workers is in “contentious contract negotiations with Kaiser.” It quoted a Kaiser representative:

The union continues to make unfounded allegations as part of their protracted labor negotiations with Kaiser Permanente, and this behavior does nothing to further the negotiations that should be taking place at the bargaining table.

Adding to the evidence that the lawsuit was not really about standards of mental health services, The Hill newspaper in Washington, D.C. reported on September 9 (in the article “AFL-CIO Convention Avoids Healthcare Union’s Protests”) that “the bitter struggle” between the union and Kaiser manifested itself at the AFL-CIO annual convention:

In a Sept. 6 letter sent to AFL-CIO President Richard Trumka, obtained by The Hill, NUHW leaders said they were “alarmed to learn that the AFL-CIO will be featuring Kaiser Permanente and its trademarked ‘Instant Recess’ during the AFL-CIO’s upcoming convention in Los Angeles, in effect holding Kaiser up as a model employer.”

“Multiple affiliates of the AFL-CIO are currently in the middle of an epic struggle at Kaiser to defend standards that workers have fought decades to establish. We again request that you and the rest of the AFL-CIO stand with us and not with this multi-billion dollar HMO,” said NUHW officials in the letter…

“This is the same employer that has been fined by the state for $4 million for patient care violations. … They are also at the bargaining table with us trying to demand the elimination of defined benefit pension plans and health plans for retirees,” Borsos said. “Hardly the kind of employer that should be honored by labor.”

It shouldn’t be a surprise that a California union has recognized the state implementation of ObamaCare as a new law ripe for exploitation. It’s part of union organizing culture in the state. A prominent law firm for labor unions has produced multiple editions of a guidebook entitled Using The California Labor Laws Offensively: Organizing Through Enforcement Of State Employment Laws.

This guidebook only limits itself to the California Labor Code, which it describes as “a potent weapon of worker advocacy.” It acknowledges that union-backed “amendments to the Labor Code during 2000-2004 substantially increased the protections California law affords workers.” Those were the years when bills signed by Governor Gray Davis became law. Governor Jerry Brown has been signing and is expected to sign another series of union-backed “protections.”

Several articles in have reported how unions submit extensive objections or file lawsuits under the California Environmental Quality Act (CEQA). (See the list of those CEQA articles.) By intervening in the licensing process at the California Energy Commission, unions hold up large thermal power plants with massive data requests and other antics permitted under the Warren-Alquist Act. Sometimes unions supplement their environmental actions with other actions against proposed development by exploiting local zoning laws.

Also reported in was the participation of unions in a lawsuit based on the California Voting Rights Act of 2001 and the potential for more mischief using this law. See “Unions Will Control Mid-Sized Cities with California Voting Rights Act.”

Kevin Dayton is the President & CEO of Labor Issues Solutions, LLC, and is the author of frequent postings about generally unreported California state and local policy issues at Follow him on Twitter at @DaytonPubPolicy.