BOMA SUPPORTS PROPOSITIONS 1A-1F

In a bold move, the BOMA California Board of Directors has voted to endorse the historic package of budget reforms placed on the May 19 ballot by the Governor and Legislature.

California is facing the worst budget crisis in its history. The worldwide recession has pummeled state revenues and put California’s budget into a $42 billion deficit. To make matters worse, our budget system is broken. The system allows overspending and doesn’t force legislators to save in good years, which has led to massive deficits, huge cuts and tax increases in bad years. Our system is in desperate need of reform.

Props 1A, 1B, 1C, 1D, 1E & 1F include long-term reforms to stabilize state spending in the future and short-term revenues to get us through these unprecedented times. The tendency of some may be to pick and choose pieces of the package, but the board decided that all the reforms are needed to make these solutions work. If they fail to pass, California will lose more than $20 billion in funding beginning immediately and over the next four years -- leading to a prolonged debate between more drastic cuts to schools, infrastructure, public safety and healthcare, and/or more tax increases.

PROPOSITION 1A - RAINY DAY BUDGET STABILIZATION AND ACCOUNTABILITY ACT

Of all the ballot measures, Proposition 1A seems to be getting the most attention as it is the long-term “structural” reform that many believe we need to help stabilize revenues and funding for vital services over the long-haul, and to prevent massive deficits in future years. It is also garnering attention because it would lengthen the sales tax increase, already approved by the Legislature, an additional two years. According to the proponent, here are the tenets of the measure:

• Prop. 1A forces the Legislature to put money away in good years, so we have it in bad years. Prop. 1A requires the state to direct 3% of General Fund revenues into a “rainy day” budget stabilization fund each year, except when the fund is full or during economic downturns.
• Mandates increased savings. 1A increases savings in the “rainy day” fund from 5% to 12.5% of General Fund revenues. Money can only be taken out of the rainy-day fund when there is a budget deficit or an emergency.
• Stabilizes state spending. 1A ensures that, each year, the state budget is consistent with state revenue trends over the past 10 years. Any money above this amount will be saved into the “rainy-day” budget stabilization fund until it reaches 12.5% of General Fund revenues. This prevents unsustainable spending of one-time spikes in revenue, which can lead to big deficits when revenues drop.

It’s estimated that if Prop. 1A had been in place 10 years ago, the rainy day reserve would have allowed California to avoid $9 billion in tax increases and deep cuts that were passed as part of this year’s budget.

The proponent maintains that unless Prop. 1A passes, California will face another huge budget hole and will result in the loss of $16.2 billion in revenues between 2010-2013. These revenues were included in this year's budget, dependent on approval of Prop. 1A.

TAX COMISSION DISCUSSES SPLIT-ROLL AND OTHER ISSUES

A 14-member “Commission on the 21st Century Economy,” convened to advise the Governor and Legislature on possible changes to our state’s tax structure, held its fourth meeting at UC Davis this week and discussed a range of issues including a “flat” income tax and “split-roll” property tax that would treat business properties different from residential properties. Click here to read coverage of the meeting.

CBPA, along with a large coalition of business and industry groups and individual companies, known as Californians Against Higher Property Taxes, are organized to meet this renewed threat of split-roll property tax. As we have been reporting often over the past few years, leaders in the California State Legislature are seriously considering reviving the thoroughly discredited notion of dumping the protections provided in Proposition 13 and attempting to impose a split-roll property tax that would choke California businesses. Anyone who has objectively looked at this idea knows that Proposition 13 has made property taxes in California one of the most reliable and stable funding sources and they reach the same conclusion that penalizing non-residential property owners simply for existing would be very detrimental to the state’s economy.

CBPA and our coalition partners continue to meet this bad idea with early and stiff resistance, in any forum it rears itself, and will work to make sure California policymakers are educated about the long term benefits and stability that Proposition 13 has brought to our state. Stay tuned, more news about these efforts will be forthcoming in the weeks ahead. Click here to learn more about the issue in general and to read CBPA’s policy statement.

SPLIT ROLL TAX STUDY SHOWS IDEA HURTS ECONOMY

Although reported before, with this renewed activity we want to make sure you are aware of a recent study that examines the potential economic impact of a split-roll property tax, taking into account how a split roll would affect the behavior of individuals and businesses who own commercial property. Completed last fall and distributed to policymakers in California, click here to read the study entitled "The Economic Effects of California Adopting a Split Roll Property Tax."
CBPA serves on the executive committee for Californians Against Higher Property Taxes, whose mission to educate the public and policymakers about the devastating impacts of higher property taxes. Although higher property taxes are very unpopular and voters have rejected them time and again, some policymakers and advocacy groups often push the issue as a way to raise additional tax revenue.

The study shows that such proposals for property tax increases will only hurt California consumers, seniors and taxpayers, and further damage our state’s struggling economy.

For more information on details of the discussion click here.

SO-CAL ACTION COMMITTEE UPDATE; SCAQMD LAND USE APPROVALS

CBPA continues to be deeply involved in the efforts against the South Coast Air Quality Management District’s (SCAQMD) attempt to circumvent local government’s land-use authority over project approvals. Included in the most recent Air Quality Management Plan (AQMP) is a requirement for the adoption on an Indirect Source Rule that targets emission reduction in the development and operational phases of projects. However the AQMP does not indicate the method to be used for achieving these reductions. CBPA along with other development-related organizations have drafted and submitted an alternative to the SCAQMD’s approach, which would maintain local government’s (Lead Agencies) approval by requiring the Rule to be incorporated into the approval process through the CEQA process. SCAQMD currently provides lead agencies with a CEQA Guidance Handbook, therefore the emission reductions can be achieved without granting the District the ability to over-ride a lead agency decision.

On April 1, an informational hearing was held with the SCAQMD Board of Directors. Our proposal was included by district staff as an option during their presentation. CBPA will continue to work with our coalition and district staff on Rule details and will be communicating with local governments on the importance of maintaining local control over project approvals. It is anticipated that the Rule will be heard again by the Board this Fall. For more information on this issue, please contact CBPA’s Southern California consultant Todd Priest.
 

INDUSTRY LEGISLATIVE POSITIONS

Representatives from several major real estate professional organizations, including ICSC, NAIOP, BOMA California, IREM, RILA, and several industry leading companies, met for a daylong discussion to analyze and debate the current crop of legislative bills, and set positions for our industry. Over the past three months, more than 500 bills with potential impact on the commercial, industrial, and retail real estate industry have been vetted in preparation for setting positions that represent the broad range of industry hopes and concerns.

In all, positions were taken on more than 188 bills on a broad range of topics from CEQA reform, to energy and water efficiency measures, to tax bills, and a multitude of measures that would impact building management and construction. These positions will guide your Sacramento advocates’ activities as the Legislature acts on these bills throughout the rest of the year.

We also want to make sure that members know the Legislative process is very fluid and bills constantly change – we actively engage on all of these measures and keep an eye on the rest of the field. Your participation and expertise is welcome and encouraged.

LEGISLATION RELATED TO PARKING

Several bills related to “parking” issues have been introduced in the Legislature. We are sharing these bills because we think they could have a significant impact on your operations and are inviting feedback:

* AB 519 (Duvall) Towing Bill of Rights

* AB 1155 (Strickland) Private Parking Facilities

* AB 1186 (Blumenfield) Non Residential Building Parking

* SB 518 (Lowenthal) Parking Fees

* SB 728 (Lowenthal) Employee Cash-out Program

If you have any analysis or comments about how these measure will impact your operations please contact Matthew Hargrove. Thank you for any assistance you may be able to provide.

BOMA CALIFORNIA 2009

JUNE 2009

June 9-10—
CALIFORNIA COMMERCIAL REAL ESTATE SUMMIT
Sacramento

June 10—
BOMA CALIFORNIA BOARD MEETING
Hyatt Regency, Sacramento
2:00 p.m. - 5:00 p.m.

June 28-30—
BOMA INTERNATIONAL ANNUAL CONFERENCE
Philadelphia, PA

 NOVEMBER 2009

November 5—
BOMA CA BOARD MEETING & ELECTION OF 2010 OFFICERS
Meritage Hotel, Napa, CA
11:00 a.m. - 3:00 p.m.

November 5-6—
COMMERCIAL REAL ESTATE STRATEGIC ISSUES CONFERENCE
Meritage Hotel, Napa, CA