GROUNDHOG’S DAY REVISITED

Eight days into the new fiscal year, legislative Democrats held a press conference to unveil a budget proposal that includes billions of dollars in tax increases on businesses and individuals. The advocated tax hikes include reducing the dependent child income tax credit, creating two higher income tax brackets, and increasing corporate taxes. The proposals, however, are seen as non-starters as the legislative Republicans, whose votes will be needed, responded with a collective Bronx cheer.

 

LEGISLATIVE SUMMER RECESS

Traditionally when a state budget hasn’t been passed, legislative leaders have forced the members of the legislature to stay in town as a form of punishment. The idea being, if folks get too hot and uncomfortable, they might come to an agreement. Also, traditionally they have taken this opportunity to do some work while in town. This year, however, both houses have shut down for a week and allowed their members to go home. We hope this new strategy results in a quicker budget agreement, but political insiders aren’t counting on it.
 

STATE REVENUES HIGHER THAN EXPECTED

State Controller John Chiang’s summary of the 2007-08 fiscal shows that State revenue for 2007-08 was $714 million higher than the previous year and the total General Fund revenue was higher than the Governor’s May Revise estimates. He stated, “while the additional revenue is welcome news, that does not alleviate the need for a budget in early August. Without a spending plan in place, the State will run out of cash at the end of September and be forced to engage in costly borrowing to cover its bills.” Click here for the summary.

SCHWARZENEGGER AND FEINSTEIN PROPOSE COMPROMISE WATER PLAN

In a very positive step to addressing California’s chronic water problems, Governor Arnold Schwarzenegger and U.S. Senator Dianne Feinstein have proposed a compromise plan to the Legislature to update California's water system by increasing storage, improving conveyance, protecting the Delta's ecosystem and promoting greater water conservation.

California is facing the most significant water crisis in its history. After experiencing two years of drought and the driest spring in recorded history, water reserves are extremely low and would not be able to meet public demand during a major disruption to the state's water delivery system such as an earthquake or levee breach. With the Sacramento-San Joaquin Delta ecosystem near collapse, court-ordered restrictions on water deliveries from the Delta have reduced supplies from the state's two largest water systems by 20 to 30 percent.

The $9.3 billion bond proposal that the Governor and Senator Feinstein have proposed includes the following elements from all stakeholders and is a compromise approach that will move California toward a reliable water future:

• Increased water storage to ensure our water supply is more reliable year-to-year and we're able to capture excess water in wet years to use in dry years
• Improved water conveyance to reduce water shortages
• Restored Delta ecosystem to allow California to take control of its own water systems
• Increased conservation and tools to use water more efficiently

The water shortfall in California is evident and the disaster is eminent unless we are able to act swiftly, decisively, and comprehensively to address issues related to levee safety, storage, conveyance, and supply. We applaud the Governor and Senator Feinstein for their leadership.

 

COST-EFFECTIVE APPROACH TO GREENHOUSE GAS REDUCTIONS?

From the AB 32 Implementation Group: What will be the most cost-effective and technologically feasible regulations to reduce greenhouse gas emissions while at the same time protecting California workers, consumers and employers? Those are the questions we must ask and act on now if we truly want the implementation of AB 32 to deliver real emission reductions and support a growing economy.

Although CARB has released its draft Scoping Plan, we have yet to see the results of the
related economic modeling. Stakeholders must have adequate time to review, evaluate and
comment on these critical analyses. We cannot ignore the economic facts – implementing AB 32 is going to come at a cost to California consumers and businesses. But, if we ask the tough questions now and persist in making sure the tactics used to implement AB 32 are indeed based on the best available and objective scientific and economic analysis, we will not be caught by surprise as these
regulations take effect.

The design of the cap-and-trade market is critical. Key considerations include:
• The market must be as broad as possible;
• Offsets play a very valuable role;
• Free allocation of allowances;
• Tax and auction requirements will penalize California businesses and consumers.

Much work needs to be done throughout the summer on the draft Scoping Plan. The AB 32
Implementation Group will stay focused on ensuring ARB does its homework to fully
understand the environmental, economic and social implications of its plan, so it may best
reach the goal of achieving the greatest emissions reductions at the lowest cost to California’s families, businesses and economy.

BOMA California is a member of the AB 32 Implementation Group, which is a broad industry-based organization whose mission is to be a constructive voice in the process to implement AB 32 and ensure that the greenhouse gas emission reductions required are achieved while maintaining the competitiveness of California businesses and protecting the interests of consumers and workers. Click here to read more about AB 32.
 

14% OF US CITIES HAVE ADOPTED GREEN BUILDING PROGRAMS

According to the recent American Institute of Architects study, “Local Leaders in Sustainability,” 14 percent of U.S. cities with populations of more than 50,000 have green building programs, and many more are about to follow suit.

In California, AB 2939 (Hancock; D-Berkeley) authorizes local jurisdictions to supplant Title 24, the state building code, with such private building standards. We believe the bill is unnecessary as state law already allows local jurisdictions to adopt standards above and beyond the state building code.

Los Angeles, Boston and Washington have mandated green standards for new commercial buildings ― and even some renovations of existing buildings.

To read the full article, “The Greening Of America” (Business Facilities magazine), click here.

 

BOMA CALIFORNIA 2008 CALENDAR

OCTOBER 23 —
COMMERCIAL/INDUSTRIAL/RETAIL REAL ESTATE INDUSTRY AWARDS DINNER
The Island Hotel (formerly the Four Seasons), Newport Beach, CA
5:30 p.m. – 9:00 p.m.

OCTOBER 24 —
BOMA CALIFORNIA BOARD MEETING & ELECTION OF 2009 OFFICERS
Newport Beach (The Irvine Company)
10:00 a.m. 3:00 p.m.