Viewing blog posts written by Gino DiCaro

A smart regulatory-making process will generate California revenue

Posted by Gino DiCaro, VP, Communications on Feb. 4, 2011

Last week we heard about California's budget crisis in Gov. Jerry Brown's 20-minute State of the State address.

While Gov Brown stuck to state budget details in his address, the regulatory crisis movement is gaining momentum as a realistic solution to revenue shortfalls here and across the country.

For example:

In late Jnauary, there were some particular light-shedding developments in a hearing at the Little Hoover Commission on California's regulatory process.

California has thousands of regulations that impact the way we operate. Given the state of our economy, many people ask the very valid but overwhelming question, "If there were just a few regulations that we could fix or eliminate to help us compete, what would they be?"   That was not the question before the hearing last week.

This is too daunting a question, at least for the moment. For a state with 37 million people, tens of thousands of businesses, a $1.7 trillion economy, and -- after years of the rule-making status quo -- thousands of regulations that might or might not be cost effective, a hundred people will give you 100 different answers to that simple question.

We learned in the hearing what most of us already felt. California is flying blind on the cost effectiveness of new regulations, with only a politically charged environment as its guide.

It's not that people aren't doing their job. Legislators are passing bills that they think are valuable. Agency rule-makers are implementing those laws or goals with regulations based on input. The folks tasked with economic impact analysis, Office of Administrative Law (OAL), are providing opinions on those impacts.

The problem lies in the anemic levels of economic analysis and an expedient culture to rule-making. Depending on the step in the process, you either get a foregone conclusion or a cursory analysis because of limited resources.

But here's the big kicker that came out of last week's hearing: When the hard working folks at the OAL suggest to a rulemaking agency that a regulation might have some negative economic impact on an industry or a consumer, they have almost no recourse to pull that regulation back. It was stated by OAL that not one regulation has been pulled back once their disagreement with an agency reached a judge who had authority to do so.

Overall, the OAL said the following:

  1. Resources are too limited for sufficient cost-benefit analysis on regulations.
  2. When they do see a potential problem, the process only provides for an expedient way to approve a regulation anyway.
  3. There are too many "underground regulations" that circumvent the analysis-requiring Administrative Procedures Act.

If you watch the hearing, you'll wonder, "What has everyone been so afraid of?"   Why has one of the most effective tools -- independent economic analysis -- been shunned by California?

Don't let one industry, one person, or one consumer tell us what regulation should be fixed or repealed. We can all make our case for certain regulatory fixes or relief (and we will), but independent economic analysis must be the government's guide or, at the very least, a well-regarded tool in their rulemaking for smarter regulations. Last week's hearing (the second conducted by the commission) went a long way in getting us there.

UC Davis economist, James Sanchirico (comments), and Harvard economist, Robert Stavins (comments) both provided compelling points that also underscored the need for sufficiently funded, independent and rigorous regulatory assessment.

0 comments | Post your comment

Promote -- don't revoke -- economic recovery policies set for 2011

Posted by Gino DiCaro, VP, Communications on June 10, 2009

Senate Pro Tem Darrell Steinberg mentions eliminating "corporate tax breaks approved in past budget negotiations" in today's Sacramento Bee article, Senate Dems push to raid budget reserve. With that statement it can be concluded that the Net Operating Loss (NOL) carry-back and the elective Single Sales Apportionment Factor are being debated for elimination -- both will help drive California's economy (and state revenue) with high wage job growth and retention in the future.

Those "breaks" were intended to remove barriers to California’s economic growth and neutralize a portion of the more than $9 billion in tax hikes and revenue accelerations on the business community. Certainty and predictability are primary tipping points for businesses looking to grow, stay or site in a location. Revoking economic stimulus policies 6 months after they were passed sets a dangerous precedent and sends signals to high wage employers that the state can't be trusted.

The NOL and the single sales factor provisions do not apply until January of 2011 and their elimination would do nothing to infuse cash to the 2009-10 budget.

Watch how the Legislature treats and delineates these important job growth provisions in the budget debate.

0 comments | Post your comment

Sen. Rod Wright scores one for equal respect for all students' dreams

Posted by Gino DiCaro, VP, Communications on May 26, 2009

Last Thursday, the California State Senate voted in support of Sen. Wright's SB 381 on an overwhelming and bipartisan vote of 32-2  (2 no's: Simitian and Wiggins -- 5 abstains: Alquist, Cedillo, Oropeza, Romero, Wolk).  Over the weekend, the most emailed article out of the New York Times was a piece, written by Matthew Crawford, on how we have devalued working with our hands. The two items together represent a growing shift back to education reality and the fulfillment of all our students' dreams. 

Crawford summed up how, over time, our country has begun to view our children's success:
"A gifted young person who chooses to become a mechanic rather than to accumulate academic credentials is viewed as eccentric, if not self-destructive. There is a pervasive anxiety among parents that there is only one track to success for their children."

The fact that SB 381 passed so overwhelmingly shows that we might be reaching the tipping point for a more balanced educational system that provides more than the traditional access to a resume of academic credentials, but options for technical skills and careers.

SB 381 calls for curricular balance in school districts that adopt the UC/CSU course admission requirements (known as "a-g") as a high school graduation requirement, by also requiring those districts adopt alternative graduation coursework that includes the core academics currently mandated by the state, along with a series of at least three career technical education classes.

We must not forget also, that this bill is a simple and clear reminder to districts of their legal obligation to maintain curricular equity and balance, as outlined in Education Code Sections 51224 and 51228:
51224. The governing board of any school district maintaining a high school shall prescribe courses of study designed to provide the skills and knowledge required for adult life for pupils attending the schools within its school district. The governing board shall prescribe separate courses of study, including, but not limited to, a course of study designed to prepare prospective pupils for admission to state colleges and universities and a course of study for career technical training.
More 51228

California's manufacturers offer high paying but very technical careers to our workforce.  These jobs play an important role in our society and pay, on average, $20,000 more than service sector wages for our hard working families.  At the very least, students should have the choice of exposure to these skills and this particular pathway.   SB 381 takes a big step toward equality for all students' dreams and, after weeks of internal legislative squabbling, garnered almost unanimous support.  SB 381 now moves to the Assembly. Stay tuned.

Here's some video from the floor debate that's worth your time:

SB 381 Author, Sen. Rod Wright's, closing speech (4:41)

Sen. Mark Wyland on SB 381 (6:31)

Sen. Pro Tem Darrell Steinberg on SB 381 (4:46)

Sen. Bob Dutton, on SB 381 (1:08)

1 comments | Post your comment

Copyright © 2019, California Manufacturers & Technology Association. All rights reserved.