by John Frith | Apr 24, 2017 | Blog
Faced with a strong and growing FBA-led coalition opposed to his bill to reinstate California’s estate tax, Sen. Scott Wiener, D-San Francisco, has decided to make his SB 726 a two-year bill, meaning it will not be heard by legislative committees this year.
The Senate Governance and Finance Committee had been scheduled to take up the bill in late April, but it was pulled from the committee’s agenda at Wiener’s request.
FBA lobbyists assembled a coalition of nearly 50 business and farming organizations that recently sent a letter to Sen. Wiener outlining the many problems in the bill. FBA Vice Chair Ken Monroe also authored an op-ed that ran in Wiener’s hometown newspaper, the San Francisco Chronicle.
“We are pleased that Sen. Wiener has delayed action on his legislation, and will continue working with our coalition partners to persuade him to drop the bill altogether,” said FBA Executive Director Robert Rivinius. “Family businesses are the bedrock of California’s economy and our communities, and imposing a California-only 40 percent death tax would be a crippling blow to many family businesses and would cause many of them to relocate to more business-friendly states.”
SB 726 would ask voters to overturn ballot initiatives approved in 1982 to do away with the state’s estate tax. While Sen. Wiener says the measure would only be pursued if the federal government abolishes its 40 percent death tax, nothing in the legislation states that. The tax would generate about $4.5 billion a year for state government.
Rivinius also warned that the fight is not yet over and FBA must continue to lead the fight against the proposal.
“The best coalition is the largest one possible, and in our case that means having FBA members in every legislative district in California. Please join FBA today to help us continue the fight to defeat this dangerous bill.
by John Frith | Apr 11, 2017 | Press Releases
Two Central Valley family-owned businesses have joined the Family Business Association of California, the state’s only organization devoted exclusively advocating on behalf of family businesses.
Julius Clothing of Sacramento was founded in 1922 by Julius Anapolsky and the third-generation owner now is Bruce Anapolsky. The company retails high-end men’s and women’s clothing by such designers as Armani, Ermenegildo Zegna, and Elie Tahari, as well as custom-made suits. The firm is located in Sacramento’s Pavilions Shopping Center.
Hogan Manufacturing, a steel manufacturing fabricator based in Escalon, was founded in 1944 by Walter F. Hogan, Sr., as California Blowpipe and Steel Co. and is now run by the third and fourth generations of the Hogan family. The company has 160 employees and reports sales in excess of $50 million a year. Its LIFTU division has built and installed more than 40,000 heavy-duty transit lifts in more than 500 cities throughout the U.S. and Canada.
“These companies have the foresight to support our efforts at the Capitol,” said Robert Rivinius, FBA’s Executive Director. “Unfortunately, only about 30 percent of family businesses survive into the second generation, 12 percent to the third and just 3 percent to the fourth generation and beyond. And policies being proposed and enacted in Sacramento make it harder and harder for family businesses to remain family-owned. FBA was founded to be an aggressive advocate for family businesses and we’re extremely pleased that these two companies have joined.”
As an example of the obstacles family businesses face, legislation was recently introduced that would create a new California estate tax to replace the federal tax being considered for elimination. Estate taxes are one of the biggest obstacles in allowing businesses to remain family-owned from one generation to the next.
by John Frith | Mar 8, 2017 | Press Releases
Two Sacramento-area family businesses have recently joined the Family Business Association of California to support efforts to keep family businesses thriving despite tax and regulatory obstacles.
OneSource Stop Loss is a second-generation family business based in Elk Grove with an office in Irvine that provides insurance and consulting services for self-funded health plans. It is one of the largest wholesalers of medical stop loss in the nation.
And Rocklin-based Switzer Associates Leadership Solutions provides coaching, team building, and facilitating for family businesses, with the goal of helping leaders reach new heights in performance.
“Family businesses are the backbone of our state’s and our nation’s economy,” said FBA Executive Director Robert Rivinius. “Nationwide, they generate 57 percent of the nation’s GDP, employ 63 percent of the workforce and create 75 percent of all new jobs. In California they employ 7 million people.”
In addition, he noted that studies have found that family businesses tend to pay their employees better, train them better and provide more generous benefits than nonfamily companies. And because families are in it for the long term, he said they focus on not just the next fiscal quarter but the next quarter-century.
“Unfortunately, only about 30 percent of family businesses survive into the second generation, 12 percent to the third and just 3 percent to the fourth generation and beyond,” Rivinius said. “And policies being proposed and enacted in Sacramento and Washington, D.C., make it harder and harder for family businesses to remain family-owned. FBA was formed to be an advocate for family businesses and we’re extremely pleased that these two companies have joined.”
For 2017, FBA has adopted an aggressive advocacy program that includes accelerating work on eliminating regulations and preventing onerous new ones; continuing to explore opportunities to expedite the transfer of ownership and property between family members and through successive generations; fight against attempts to raise taxes on family-owned and commercial properties; and opposing proposals and legislation that would add new regulations, costs and complexity for family businesses.
As an example of the obstacles family businesses face, legislation was recently introduced that would create a new California estate tax to replace the federal tax being considered for elimination. Estate taxes are one of the biggest obstacles in allowing businesses to remain family-owned from one generation to the next.
by John Frith | Feb 8, 2017 | Press Releases
Raley’s, Nor-Cal Beverage put distinctive decals on delivery trucks
If you’ve driven behind a truck from Raley’s Family of Fine Stores or Nor-Cal Beverage Co. lately, you may have noticed a distinctive decal that announces that those companies are both proud members of the Family Business Association of California.
Robert Rivinius, FBA’s executive director, said the two companies – both founded in the mid-1930s – have placed the signs on their vehicles to underscore the importance of family businesses to the state’s economy and quality of life.
“Family businesses are the backbone of our economy,” Rivinius said. “Nationwide, they generate 57 percent of the nation’s GDP, employ 63 percent of the workforce and create 75 percent of all new jobs. In California they employ 7 million people.”
Beyond that, he said, studies have found that family businesses tend to pay their employees better, train them better and provide more generous benefits than nonfamily companies. And because families are in it for the long term, he said they focus on not just the next fiscal quarter but the next quarter-century.
“Unfortunately, only about 30 percent of family businesses survive into the second generation, 12 percent to the third and just 3 percent to the fourth generation and beyond,” Rivinius said. “And policies being proposed and enacted in Sacramento and Washington, D.C., make it harder and harder for family businesses to remain family-owned.
“FBA was formed to be an advocate for family businesses and we’re extremely pleased that these two leading companies have decided to show their support.”
Michael Teel, Raley’s owner and CEO, echoed those thoughts.
“The Family Business Association works to protect and support family businesses grow in California. These decals show our commitment to the future of family business, while promoting the association’s purpose,” Teel said.
Grant Deary, executive vice president of Nor-Cal, agreed.
“We have incorporated the FBA decal on our truck fleet because that decal communicates our values statement beyond Nor-Cal Beverage Co.,” he said.
“Nor-Cal has been family-owned since its founding as Hires Bottling Co. in 1937 by our grandfather, Roy Deary. The company has successfully grown, diversified and changed to address the needs of a dynamic beverage industry, but what has not changed is our company’s commitment to remain a family values-centric company. We are family owned, but more importantly, we are family operated, and as a result our employees are extended members of our family and it’s not uncommon for them to be with us for 25 or 30 years.”
Raley’s operates Raley’s, Bel-Air Markets and Nob Hill Foods in the Central Valley, Bay Area and northern Nevada. Nor-Cal is the largest independent co-packer of teas, ades, chilled juices, waters and energy drinks west of the Mississippi; sells, services and installs a wide range of on-tap beverage dispenser systems; and is also an equipment service provider to the convenience store industry.
For 2017, FBA has adopted an aggressive advocacy program that includes accelerating work on eliminating regulations and preventing onerous new ones; continuing to explore opportunities to expedite the transfer of ownership and property between family members and through successive generations; fight against attempts to raise taxes on family-owned and commercial properties; and opposing proposals and legislation that would add new regulations, costs and complexity for family businesses.
“If family businesses are the bedrock of our communities and our economy, shouldn’t government enact policies that will enhance that role, rather than forcing too many companies to sell to new owners who may be far more interested in their short-term bottom line than the long-run strength of our communities?” Rivinius asked.
by John Frith | Nov 24, 2016 | Press Releases
By Stan Van Vleck and John Taylor
Originally appeared in the Sacramento Business Journal
This year, our two family-owned farming companies are celebrating major anniversaries. Van Vleck Ranch in Rancho Murieta turned 160 years old, while Taylor Brothers Farms in Yuba City is celebrating its centennial. We wouldn’t be here today without the hard work and leadership of our parents and grandparents, and we hope that our businesses will still be in our families decades from now.
Unfortunately, the never-ending deluge of taxes and regulations imposed here in California makes that dream less and less likely. And new tax regulations proposed by the outgoing Obama Administration would make it much harder for families to pass down their businesses to the next generation. And that would be a shame, because family businesses like ours are more than just employers. We are the bedrock of our economy and our communities and need to be preserved.
Our businesses have deep roots in Northern California. The Van Vleck family began farming operations in Apple Hill in 1856 after coming to California by covered wagon from Wisconsin, and expanded operations to our cattle ranch in 1915. Today I’m the fifth generation owner of the business and have created a thriving operation specializing in ultra-premium beef for many of the nation’s top restaurants, including Michael Mina and The French Laundry.
The Taylor family has a similar story, settling in the Loomis area before the turn of the last century. In fact, Taylor Road is named for our family. Earl Taylor moved north to begin farming the rich soils of Sutter County in 1916. His son, George, carried on the family tradition until my brother, Richard, and I took over in the early 1980s. Today we are the world’s largest organic prune grower and processor.
Our families have both been success stories at a time when it’s harder and harder for family-owned businesses to grow and thrive. That’s why we are proud members of the Family Business Association of California, because family businesses absolutely have to make sure our voice is heard at the Capitol. As the old saying goes, if you’re not at the table in Sacramento, you’re on the menu.
Only about 30 percent of family businesses survive into the second generation, about 12 percent make it into the third generation and just 3 percent operate in the fourth generation and beyond.
These statistics should trouble everyone. A recent study showed California has 1.4 million family businesses that employ 7 million people. Nationally, family businesses generate 57 percent of the nation’s gross domestic product, employ 63 percent of the workforce and create three-quarters of all new jobs.
Studies have found that family businesses tend to pay their employees better, train them better and provide more generous benefits than non-family companies. And we’re less likely to significantly downsize during tough economic times. Because our families are in it for the long term, we focus on not just the next fiscal quarter but the next quarter-century.
Unfortunately, it’s increasingly difficult to keep family businesses in the family. The next generation may not be interested in the family business, and we both tell our children that they should stay involved only if they’re passionate about it and if it makes long-term economic sense.
We also face the likelihood of significantly higher inheritance taxes. We already spend years – and a lot of money on lawyers – to prevent our heirs from being forced to sell the business to pay the death taxes. Now proposed IRS regulations could change long-standing precedent and require transfer of interests in family-controlled companies to be valued as though the recipient has a right to sell it back at a “minimum value” that they couldn’t obtain in real life. Eliminating minority share discounts would significantly increase estate taxes and would force many family businesses to eventually throw in the towel.
Too many elected officials say they support family businesses and that they want us to remain here and to do well, but then turn around and say we’re doing well so what’s the problem? Well, at Van Vleck Ranch our net income is about the same as it was a dozen years ago when our gross income was 10 times less. And some bluntly say that it doesn’t really matter if we leave because others will come to replace us. This is California, after all.
But if family businesses are the bedrock of our communities and our economy, shouldn’t government enact policies that will allow us to continue in that role, rather than forcing us to sell to new owners who may be far more interested in their short-term bottom line than the long-run strength of our communities?
Stan Van Vleck is the owner of Van Vleck Ranch in Rancho Murieta. He can be reached at stan@stanvanvleck.com. John Taylor is vice president of Taylor Brothers Farms in Yuba City. He can be reached at jtaylor@succeed.net.
