ECONOMIC DEVELOPMENT INCENTIVES TO BE EXPANDED?
Addressing a deficiency in Utah’s Industrial Assistance Fund, Rep. Harper has filed a bill to provide greater flexibility to the Governor’s Office of Economic Development Board to assist existing companies in Utah to retain employees and not just to expand operations and add new employees. Historically, most of the emphasis of the Industrial Assistance Fund has been on attracting new companies to Utah. For several years UMA has promoted greater emphasis on existing companies to level the playing field with out of state entities.
HB-118 begins to level that playing field and gives the GOED Board more flexibility to help instate companies and waives some requirements to add new employees. It also increases the cap on the Industrial Assistance Fund from $30 million to $50 million.
UMA supports this effort and will work for its passage. This is a high priority for UMA. The bill was voted out of the House Business and Labor Committee to the floor this morning. It appears to have good support.
WORKPLACE DRUG AND ALCOHOL TESTING MOVES FORWARD
February 5, 2010 – “UMA on the Hill”
UMA was involved throughout the summer of 2009 with Representative Trish Beck, (D) Sandy, to work out details of a proposal to rewrite procedures for workplace drug testing. The new procedures included in HB-23 establishes new standards for confirmation testing of non-negative drug tests. The new procedures are no more stringent than the current standards but actually provide additional protections for employers who voluntarily use a medical evaluation of the tests.
UMA has carefully helped develop the new standards to ensure protections are preserved for employers who do drug testing and take actions on non-negative tests. The bill has passed the House of Representatives and on Friday was approved by the Senate Health and Human Services Standing Committee for consideration by the full Senate. The original proposal last year that gave light to this year’s bill would have mandated the use of a medical review officer. HB-23 makes it voluntary and adds additional protections for employers who choose to use MRO’s.
UMA SUPPORTS CLEAN AIR RESOLUTION
February 5, 2010 – “UMA on the Hill”
A Joint Resolution on Clean Air, HJR-5, by Representative Carol Moss, encourages citizens of Utah to eliminate all unnecessary idling of automobiles. It was the brainchild of a fourth grade class at Morningside Elementary School in Salt Lake County. The students have made a study of the impacts of auto emissions to air quality in the Salt Lake Valley and came to the Legislature with a rather impressive presentation including a video.
The UMA Legislative Committee reviewed the resolution and suggested we embrace the non-binding resolution to give us a chance to do some messaging about the historical efforts of business and industry in improving air quality along the Wasatch Front. Nearly all the improvements in air quality so far have been accomplished by industry. The remaining improvements will need to be done by citizens and their automobiles.
With the aid and testimony of UMA the resolution passed committee unanimously and was forwarded to the House for further action. It appears any effort by the public to reduce their contribution to air pollution will be helpful to improve the air quality and reduce the burden on industry.
VENDING MACHINES IN PUBLIC SCHOOLS RISES FROM THE ASHES
February 5, 2010 – “UMA on the Hill”
A perennial issue on the hill is an effort by a relatively small number of legislators to regulate what is available to students in the public education system in vending machines, both beverages and snack foods. The effort for the past several years has been lead by Senator Pat Jones. Her approach this year is to codify industry standards for beverage and snack foods to ensure compliance.
Many lawmakers oppose regulating choices in schools and have been successful defeating past efforts. UMA member companies who are in the soft drink bottling industry and snack food manufacturers are complying with industry standards and have tried to get proponents of regulating selections in schools to recognize their efforts and give them time to move to where proponents support over time rather than mandate compliance.
This year’s bill would put in law what the industry is already doing. UMA and the Utah Beverage Association have taken a neutral position on Senator Jones’ bill. However, in committee this morning, her bill was substituted for a version that would give the responsibility to the State Office of Education to adopt industry standards and recommend them to local school districts that could adopt them or something different provided they give a written report as to why they are adopting a different standard.
The bill was held over until next Tuesday due to lack of time to finish discussion and debate. UMA questions the need to codify a standard that is already being achieved but is leaving that policy decision to legislators. Our concern for bottlers and snack food manufacturers is that they not be unnecessarily burdened by regulations that don’t accomplish any meaningful purpose.
We will continue to work on this bill to ensure it does not move to a mandatory measure.
My Corner: Cut Spending to Balance Budget
By:Vice President - Royce Van Tassell
With the Legislature in full swing again, lawmakers are more focused on balancing Utah’s budget than they have been in many years. Last year they could rely on largesse from President Obama’s stimulus plan to cover gaping holes between the on-going costs of state programs and the on-going revenues necessary to fund those programs. Without that fig leaf this year, appropriations committees, legislative leadership and the Governor are all focused on finding either “revenue enhancements” or opportunities to cut spending.
Governor Gary Herbert submitted a budget to the Legislature without any general tax increases, and his State of the State address reiterated his commitment to “no new taxes.” Unfortunately, some in the Legislature are still determined to raise taxes.
The most common tax hike proposals on Capitol Hill focus on increasing the tobacco tax. Representative Paul Ray wants to nearly double the tobacco tax, while Senator Christensen wants to nearly triple the tobacco tax. Both Rep. Ray and Sen. Christensen want the tax increase so fewer Utahns will smoke, but many of their colleagues are eyeing a tobacco tax increase to help balance the budget. If the latest state revenue numbers are any indication, increasing tobacco taxes will make it even harder to balance Utah’s budget.
The latest TC 23 monthly report, which compares actual and projected revenues, arguespowerfully against relying on a tobacco tax increase to help balance the state budget. As the nearby table indicates, tobacco tax revenues collected during the last six months of 2009 dropped a collective 17.5%, as compared with the same six-month period in 2008. A drop that sharp demands explanation, and two possibilities seem plausible. First, the recession may have been deeper in 2009 than it was in 2008. In other words, during 2009 Utah consumers had less discretionary income, so they bought fewer cigarettes. There is little doubt that fact is partially responsible.
However, it simply begs credulity to lay this drop solely at the feet of the recession. The second contributing factor is the $0.60 per pack increase in the federal tobacco tax which took effect on April 1, 2009. In response, Utahns bought fewer cigarettes.
As noted above, some tobacco tax advocates celebrate that as a success. Whether you celebrate fewer smokers or not, this evidence argues strongly against any hope that a tobacco tax increase will help balance the budget. It won’t. Raising Utah’s tobacco tax will instead only deepen the already gaping budget hole.
Instead of raising taxes, the Legislature should be looking for ways to cut unnecessary spending. Louisiana offers a reform model Utah officials should consider replicating. Louisiana is in a similar boat, facing a $3 billion deficit over the next two fiscal years (representing roughly 12 percent of the general fund budget in FY2011 and rising upwards of 24 percent in FY2012).
Accordingly, Pelican State policymakers—led by Governor Bobby Jindal—have embarked on a proactive, wide-ranging package of reforms to reduce the size and cost of state government.
Last spring Louisiana created a Commission on Streamlining Government that presented the Louisiana governor and Legislature 238 recommendations which would save over $1 billion. The recommendations include adopting a statewide spending limit, shifting all of the state's retirement funds to 401-K style defined contribution plans for all new hires, and revamping state education finance to promote a student-based budgeting approach where education dollars directly follow children into the classroom.
Louisiana policymakers also improved their budgeting process by eliminating many protected funding streams. Instead of having funds automatically flow to specific projects, Louisiana removed some statutory limits on how far they could cut certain programs, and piloted with some agencies an outcome based budgeting process. The result was that government could fund first things first, focus on performance measurement and results, and allow Louisiana more flexibility in adjusting and potentially eliminating funding streams.
Similar to Louisiana, Utah Governor Gary Herbert has also raised the issue of government efficiency in his creation of an efficiency panel chaired by former Governor Norm Bangerter.Your Taxpayers Association encourages the panel to consider the success of Louisiana as itcreates recommendations for the Utah Legislature. These common-sense reforms will do far more to balance Utah’s budget, now and into the future, than any constellation of taxincreases. Your Taxpayers Association is working to make sure Utah’s elected officials cutspending, manage their budget wisely, and stop dipping into your pockets.
HEALTH CARE UPDATE
February 5, 2010 - NAM
House Democratic leaders are reportedly preparing legislation for consideration next week that would repeal the antitrust exemption for insurance companies. The legislation represents the first of a series of small health care bills that could see action this spring. Also, Senate Majority Leader Reid indicated there is a “strong possibility” that the House and Senate this spring would pass a budget “reconciliation” bill – which requires a simple majority rather than a 60-vote majority – that contains health care provisions. "We plan to do health care this year and do it as quickly as we can," said Reid. Meanwhile, more than 100 House Democrats signed a letter this week that urged Leader Reid to make “the public option” part of the reconciliation bill.
MORE THAN 550 NAM MEMBERS SIGN LETTER OPPOSING BECKER NOMINATION
February 5, 2010 - NAM
The NAM has been leading the effort to oppose the nomination of Craig Becker to serve on the National Labor Relations Board (NLRB). This week, the NAM sent a letter of opposition from over 550 NAM members to the Senate. The letter noted that Mr. Becker's “views and interpretation of labor law would radically change the nature of the NLRB” and that he would seek to advance elements of the jobs-killing Employee Free Choice Act through NLRB actions. Floor action on the nomination is expected early next week. Click http://documents.nam.org/GA/Becker.pdf to view the NAM 's letter
NAM WEIGHS IN ON EPA PROPOSED OZONE STANDARD
February 5, 2010 - NAM
The EPA conducted a public hearing February 2 on its reconsideration of air quality standards for ozone. NAM Director of Energy and Resources Policy Bryan Brendle, testifying on behalf of NAM members, noted that revisions to air quality standards, especially ozone, impact manufacturing either directly or indirectly. The NAM opposes a stricter ozone standard, especially since regulators already lowered the standard in 2008 from 80 to 75 parts per billion to protect public health. Tightening the standard further is unnecessary and will result in mandating new compliance costs that will hinder industry's ability to create jobs and reduce the nation's double-digit unemployment rate, said Brendle. To view Brendle's oral statement, click the following link. http://documents.nam.org/GA/ozone.org
OBAMA ADMINISTRATION DROPS $646 BILLION REVENUE ESTIMATE FOR CAP-AND-TRADE PROGRAM IN 2011 BUDGET
February 5, 2010 - Amanda Luhavalja – Utah Energy Users
With an overall consensus that any attempt to pass a comprehensive, economywide climate bill this year appears dead in the water, the recently released federal budget for fiscal year 2011 has dropped an estimate that the proposed cap-and-trade system in the United States would generate at least $646 billion in federal revenue over the first few years of the program.
The president's budget proposal for fiscal year 2011, released Feb. 1, assumes that an emissions trading program would be "deficit-neutral," producing no net gain or loss in federal revenue.
"A comprehensive market-based climate change policy will be deficit-neutral because proceeds from emissions allowances will be used to compensate vulnerable families, communities, and businesses during the transition to a clean-energy economy," the administration said in a footnote to the budget. "Receipts will also be reserved for investments to reduce greenhouse-gas emissions, including support of clean-energy technologies, and in adapting to the impacts of climate change, both domestically and in developing countries."
The president's budget plan last year assumed at least $646 billion in revenue, from 2012 to 2019, from the sale of emissions allowances under a cap-and-trade system. Most of the proceeds would be used to help fund a tax cut for the middle class.
Legislation to create such a system passed the House of Representatives in June 2009, but efforts to pass a bill in the Senate have stalled, with many believing passage this year will be hindered since many lawmakers, ahead of November elections, are reluctant to support any measure that could drive energy costs higher.
"Basically, I think it [the omission of the estimate] is an acknowledgement that climate legislation probably won't get passed this year," Phil Flynn, energy analyst at PFGBest Research in Chicago said. "I also think it acknowledges that cap-and-trade won't be a money maker for the government and that it might actually slow down economic growth."
Others, however, believe the fact that the Obama administration dropped the cap-and-trade revenue estimate does not hinder the chances for the passage of comprehensive legislation, even before year's end, a Connecticut-based broker with CantorCO2e said.
In fact, the broker called the move a "good sign," because by taking the revenue estimate of auctioning off 100% of carbon allowances out of the budget, it may mean that Obama is willing to compromise, "as no program would pass with 100% auction, and the House bill has free allocations of the allowances."
Under the Waxman-Markey bill passed by the House, electric utilities, large-industrial sources and other entities that emit 25,000 tons or more per year of CO2-equivalent would be required to have tradable federal allowances for each ton emitted into the atmosphere. Starting in 2012, the sectors would be required to meet a cap of 3% below 2005 levels. That cap increases to 17% below 2005 levels by 2020, and to 83% below 2005 levels by 2050. The Waxman-Markey bill allocates 30% of total emission allowances for free to local distribution companies, with 5% to merchant coal plants that operate in unregulated power markets.
Because the House has already passed its version of a climate bill, most of the hope for climate action to move forward is centered on the efforts of Sens. John Kerry, D-Mass., Lindsey Graham, R-S.C., and Joseph Lieberman, I-Conn., who are continuing to press on to find 60 votes for some form of a climate bill.
Even if climate legislation fails to pass this year, market sources have indicated carbon market activity in the U.S., particularly on a regional level, will continue to grow.
"If the Senate doesn't manage to pass anything within the next five months, which I don't think they will, state-level initiatives will be reignited," Milo Sjardin, director of North American research-carbon markets at New Energy Finance in New York City, said.
TAXES IN PRESIDENT'S BUDGET WILL STIFLE ECONOMIC GROWTH
February 5, 2010 - NAM
President Obama released his FY2011 budget on February 1. The NAM commended the President for increasing investments in infrastructure, broadband and energy security, extending key international and investment tax provisions, making permanent the R&D credit and significantly increasing basic research funds. Unfortunately, the plan's massive tax increases – nearly $500 billion in new taxes on businesses over the next 10 years – would ultimately stifle growth, says NAM Executive Vice President Jay Timmons. “Manufacturers and their workers are disappointed that the Administration's budget proposal discourages job creation by adding new costs to business,” said Timmons.
Click http://www.nam.org/NewsFromtheNAM.aspx?DID=%7bE057800E-610F-40B3-8595-A257E739EEBF%7d to view the NAM's statement on the budget.
THICKET OF REGULATION STRANGLES JOBS
February 5, 2010 - Jack Stewart, California Manufacturers and Technology Association Special to “The Bee”
For all the rosy talk, California's new "green" jobs now account for less than 1 percent of the state's work force. Certainly we need these jobs and should be doing everything we can to nurture them. But pretending that they alone will pull California out of our current economic bog is naive. Growing thousands of green jobs while driving away hundreds of thousands of manufacturing jobs won't recapture our state's economic glory. We need both to reignite our economy.
California's manufacturing sector provides high-wage jobs for millions of middle-class families while generating billions of dollars in tax revenue for schools, infrastructure and other public services. But these jobs are disappearing. We aren't talking about old "smokestack" industry jobs, but aerospace, high-tech, biotech and other skilled positions that pay on average $20,000 a year more than service-sector jobs. This month, our last auto manufacturing plant is closing.
Manufacturing and other companies are leaving California or failing to expand, in large part, because of the state's notoriously expensive and uncertain regulatory environment. Businesses are afraid to invest here because the rules keep changing while the cost of compliance spirals ever higher.
"It's difficult for most employers to make a solid case for starting up or expanding a business in California," observed Trends Magazine recently. "Government regulations seem perversely aligned to discourage people from doing business there." Last year, one California company told the Legislature it had been inspected by regulators 165 times in 2008, nearly every two days, and that inspections had increased another 26 percent in 2009. Reports like this scare other companies away.
Since 2001, California has lost nearly a third of its manufacturing base, a 32 percent decline in just eight years.
The impact has been devastating: 600,000 lost jobs, $75 billion a year in lost wages and $5 billion annually in lost tax revenue, money that once helped balance the state's budget.
If we're serious about reversing California's reputation as a lousy place to do business, we need to get serious about regulatory reform. We don't need to dismantle environmental, worker or consumer protections to improve California's regulatory climate.
But we do need to remake the system so it's lean, efficient, predictable and accountable, with common-sense rules that are fairly applied. It's a smart way to begin repairing our image (and our economy) because it can be accomplished quickly and without cost. Moreover, the benefits will be felt almost immediately, as it will send a powerful message to the business world that we genuinely want their jobs and the revenue they provide. Very quickly, we'll once again be competitive with other states.
To achieve this, three things need to happen.
First, the Legislature needs to restore its authority over the state's regulatory bureaucracy. Unelected officials now have sweeping powers to impose new regulations, with no requirement that these regulations be reviewed or approved by the Legislature. This creates an uncertain and unpredictable regulatory climate that can easily be fixed by requiring legislative approval for each new regulation proposed by the bureaucracy.
Second, there needs to be a system that accurately measures the potential impact of proposed regulations on jobs and the state's economy, so informed decisions can be made about whether the benefit of a new regulation is worth the cost.
Requiring the Legislative Analyst's Office to complete an unbiased, independent economic impact report for every major regulation that's proposed will achieve this.
Third, to begin trimming California's regulatory thicket, the Legislature should review every regulation already on the books, and require periodic review for all new regulations adopted in the future. Doing so will ensure that regulations are working as intended, and rid the state of regulations that are outdated, ineffective and redundant.
Clearly, other steps must be taken to fully revive California's economy and stop the exodus of jobs and tax revenue. But regulatory reform is a good place to start because it provides tangible and immediate proof to wary investors and company decision-makers around the world that California is back in business.
UTAH HEALTH EXCHANGE LAUNCHES LARGE GROUP PILOT PROJECT
February 5, 2010 - PR or News Wire
The Utah Health Exchange (UHE) launched a new pilot program designed to admit large employer groups into the Exchange earlier than originally anticipated.
When established last year, the plan was opened for early testing only to small employers, 2-50 individuals. The Utah Health Exchange was not scheduled to admit large employer groups for beta testing until fall of 2011. However, at the urging of several large group employers, Utah House Speaker David Clark included a provision in his most recent health system reform bill authorizing the Governor’s Office of Economic Development’s Office of Consumer Health Services to initiate a pilot project for large employer groups. The first four employer groups to contribute to plan design through participation in the pilot are Zions Bank, APX Alarm, HealthEquity, Inc. and Spanish Fork City government. Zions Bank, a pioneer in consumer driven health plan (CDHP) implementation, will evaluate the UHE program and consider the benefits it may present to employees alongside the CDHP plans it has offered for the past five years.
“Together, these four groups constitute yet another ‘unprecedented partnership’ on the path towards meaningful health system reform,” said Speaker Clark.
“Utah businesses are demanding more predictable and controllable health care costs and increased choice and flexibility for their employees. The Health Exchange provides an avenue to address these concerns,” said Spencer Eccles, executive director of the Governor’s Office of Economic Development in whose agency the health exchange is being developed.
The Utah Health Exchange is a critical component in moving towards a consumer-based system. The Exchange allows employers the opportunity to simplify benefits management by offering employees a “defined contribution”, or specified amount of pretax dollars set aside for the purchase of an employee-selected health plan from a menu of various plans and prices. The Exchange also allows employees, rather than employers, to compare and select the health plan that works best for their individual needs and circumstances.
As more employers choose to offer health benefits on a defined contribution basis via the Exchange, increasing numbers of workers will be able to take their coverage with them from job to job. Increased portability means greater continuity of care and a reduction in the number of uninsured.
By statute, all plans offered through the Exchange must meet federal standards for employer-sponsored coverage; thus, participating employers and their workers can be confident the insurance they choose will be quality coverage from responsible carriers. Furthermore, it is expected the element of consumer choice in this market will put downward pressure on prices and while simultaneous putting upward pressure on quality. This combination constitutes the most effective means whereby consumers may maximize value in their health coverage.
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