Electric security fences like this one from AMAROK can now be permitted much more quickly.
FBAC, our Statewide Sponsor AMAROK, and other installers of electric fences won a great victory at the Capitol last year when our sponsored bill AB 2371 was signed into law. AMAROK installs 10-foot-high electric fences inside the fence of an outdoor storage facility. These electric fences aren’t lethal, but it is virtually impossible to get past them.
The bill was needed because the average time it took to get a permit in California for this simple concept was 372 days. Some local governments dragged the process out for as much as five years. Our bill provided that, if certain requirements were met, these fences could be installed without going through the permitting process.
With some good lobbying, the bill had unanimous support in both houses of the Legislature and was signed into law by the Governor on an urgency basis, so it went into effect on September 14, 2024. Since that time, in just five months, 450 fences have been installed and another 50 are in the pipeline. Approval times have dropped from that 372-day average to an average of just 16 days!
If this kind of reform could be done in more areas, it would really improve the business environment in our state. Kudos to AMAROK and our lobbying team for a job well done.
FBA Chairman Ken Monroe wrote this op-ed for the Pacific Coast Business Times, which serves Ventura, Santa Barbara, and San Luis Obispo counties. The article suggests that help may be on the way from DC but it’s time for Sacramento to take a hard look at its regulatory regime as well. The full piece can be found here.
Family businesses are the backbone of California’s economy. From family farms to shops and restaurants to manufacturing companies, our businesses don’t just provide goods and services; we create jobs, support communities, and carry on legacies built over generations.
As chairman of the Family Business Association of California, I hear all the time from our members that our businesses are facing a threat that is difficult to overcome: excessive government regulations that affect virtually every aspect of our operations.
Regulatory mandates are often well-intended. They were enacted to provide protections to workers, the environment and the public as a whole. In many cases, regulations make sense.
But too often, they are excessive — and the cumulative costs of complying are a major reason why a steady stream of California companies are moving operations to more business-friendly states.
California has been completely controlled by one party since Gov. Arnold Schwarzenegger left office in 2011. Under total progressive rule, we have witnessed unbridled spending, tax increases, and a tsunami of regulations imposed on family-owned businesses, making it harder for our companies to remain profitable or even stay in business. Some examples are:
Labor code expansions including paid and unpaid family leave, expanded sick leave and mandated lunch breaks before the fifth hour
PAGA lawsuit abuse
The AB 5 independent contractor three-part test
A $ 20-an-hour minimum wage for employees of quick-service franchise food industry employers
An unfunded unemployment insurance system resulting in higher payroll taxes for employers
And 1,100 pages of law in just the employment arena, making it virtually impossible for businesses to comply.
These examples are only a small fraction of the laws and regulations negatively impacting businesses’ ability to compete with other states in the pursuit of economic growth and sustainable quality of life.
More recently, retail theft, drug abuse and chronic homelessness have added cost burdens and harms our ability to provide a safe environment for our employees and customers. These problems began to explode after voters passed Proposition 47, the so-called “Safe Neighborhoods and Schools Act,” in 2014. This grossly deceptive ballot title and summary, written by then-Attorney General Kamala Harris, helped ensure the measure was enacted.
The widespread crisis created by Prop. 47 must be solved, which is why the Family Business Association of California strongly supports the passage of Proposition 36 on the November ballot.
Prop. 47 has proven to be catastrophic for California. Its soft-on-crime “restorative justice” policies supported by politicians and prosecutors backed by far-left hedge fund tycoon George Soros aimed at keeping criminals out of jail have made California less safe. The statistics are alarming. According to Yolo County District Attorney Jeff Reisig:
Homelessness has skyrocketed in the state by 51% since Prop. 47 passed, while in the rest of the country it has decreased by 10%
Smash-and-grab thefts have exploded to the point where retail theft is costing California businesses nearly $9 billion a year in lost revenue
Fentanyl is being trafficked over the border and infiltrating into our communities. More than 100 Californians die each week from this deadly poison and more than 20% of youth deaths in California are now due to fentanyl.
Proposition 36, the Drug and Theft Crime Penalties and Treatment-Mandated Felonies Initiative, creates targeted, commonsense reforms by tackling organized and serial retail theft, confronting the fentanyl crisis in our communities, and prioritizing mental health and drug treatment from a compassionate “carrot-and-stick” approach to ultimately getting people off the streets.
Stopping Repeat and Organized Retail Theft
One of the biggest problems created by Prop. 47 was making retail theft a misdemeanor if thieves stole less than $950 worth of property. These thefts remain misdemeanors even if the same criminal steals that much property from many different stores. Prop. 36 fixes this giant loophole by classifying repeated theft as a felony for those who steal less than $950 if they have multiple prior theft-related convictions, and allows stolen property values from multiple thefts to be combined so repeat offenders can be charged with a felony if the total exceeds $950.
It also authorizes judges to impose an enhanced penalty when an offender steals, damages, or destroys property by participating in organized theft with two or more offenses or by causing losses of $50,000 or more.
Confronting the Fentanyl Crisis
Prop. 36 adds fentanyl to the list of hard drugs, alongside drugs like heroin, cocaine and methamphetamine – appropriate since it is much more lethal. In fact, fentanyl is 50 times more potent than heroin, and according to the Drug Enforcement Agency, just 2 milligrams of fentanyl is enough for a lethal dose, the equivalent of just a few grains of salt.
In addition, Prop. 36 enables stricter penalties for dealers whose trafficking of fentanyl causes death or serious injury and provides warnings of potential murder charges if they continue trafficking as a result of fatalities.
Combatting Homelessness, Supporting Mental Health and Drug Treatment
Studies have demonstrated up to 75% of people chronically experiencing homelessness have a substance abuse or mental illness disorder. Prop. 36 provides critical mental health, drug treatment services and job training within our justice system for people who are homeless and suffering from mental illness or struggling with substance abuse
In addition, Prop. 36 enacts a new class of crime called a “treatment-mandated felony” where offenders with multiple hard drug possession convictions would be given the option of participating in drug and mental health treatment in lieu of incarceration. Finally, Prop. 36 allows offenders who successfully complete drug and mental health treatment to avoid jail time and have the charges fully expunged from their record.
The time is now to correct the destructive policies of Proposition 47 and restore safety while creating accountability and consequences by supporting Proposition 36. If we make crime illegal again, maybe we can look forward to a more business- and family-friendly state that can once again be “golden.”
As California’s only organization solely devoted to promoting and protecting family businesses, FBAC has taken the following positions on four measures that will appear on the November ballot:
YES on Proposition 36, which will reverse the damage done by Prop. 47 in 2014 and address retail theft and homelessness. FBAC is an active part of the coalition working to pass this measure.
NO on Proposition 5, which would lower the threshold to pass local bond measures from 2/3 to 55%.
NO on Proposition 32, which would raise the statewide minimum wage to $18 an hour.
NO on Proposition 33, which would enable local governments to adopt rent control measures.
Prop. 36: California is suffering from a continued explosion in theft and trafficking of deadly hard drugs like fentanyl, often because the people committing these crimes do not face serious consequences. Prop 36 will make our communities safer by creating real accountability for those drug traffickers and criminals who repeatedly steal while also providing meaningful treatment incentives for individuals with mental health and drug addiction issues. For more information, visit https://voteyesprop36.com
Prop.5 is a direct attack on Proposition 13. It makes it easier to raise taxes by eliminating the longstanding two-thirds vote of the electorate required to pass local bonds (borrowed money that must be repaid with interest). All new bond measures for “infrastructure” (nearly everything is “infrastructure”) and for public housing projects would pass with just 55% approval instead of the current 66.7%. Local bonds are paid for with extra charges on property tax bills, adding to the tax burden on homeowners and businesses, leading to higher rents for tenants and higher consumer prices for everyone. For more information, visit https://nonewtaxes.com
Prop. 32 would increase costs on family-owned businesses that can least afford it and force small employers to increase prices for consumers to absorb the higher minimum wage. After the new California fast-food minimum wage law took effect, fast-food prices rose by 7% in six months, the fastest in the nation. Some well-known “value meals” now cost over 40% more in California than the rest of the country. Prop. 32 would bring these record-setting price increases to small restaurants, grocery stores, convenience stores, small retail shops, farmers, and more, so we’re going to see the same sticker shock everywhere. (Website not yet launched.)
If Prop 33 seems familiar, it’s because nearly 60% of California voters rejected nearly identical anti-housing schemes in 2018 and 2020. The measure is part of a broader anti-housing agenda and would effectively overturn more than 100 state housing laws, including laws making it easier to build affordable housing like ADUs. It would also authorize permanent price controls, even on single-family homes. Non-partisan researchers at MIT estimate extreme measures like Prop. 33 result in an average reduction in home values of up to 25%. For more information, visit https://noonprop33.com.
FBAC members and sponsors had a great time at the association’s first Sacramento Area Networking Event on August 20. The event provided them with quick updates about FBAC’s activities and important legislation as well as ample time to network.
Ken Monroe making points about membership
FBA Chairman Ken Monroe kicked things off with a progress report about the association’s growing influence at the Capitol and urged members to help build membership.
“More members give us the power to make a huge difference with the Legislature, and we’re at a point where we think we can make a difference,” he said.
Political Director Robert Rivinius followed with a brief summary of key ballot measures and legislation, especially the need to support Proposition 36 in November. That measure would create tougher penalties for serial retail theft and smash-and-grabs while confronting the fentanyl crisis and incentivizing drug and mental health treatment. FBAC is part of the coalition working hard to pass the measure.
Members and sponsors interviewed at the event strongly agreed that having a family business presence at the Capitol is critically important.
Kenneth Fat and Dan Kellow
“I think FBAC does a good job on behalf of California’s family businesses,” said Dan Kellow, a commercial and industrial relationship manager with River City Bank – one of the few family-owned banks in California.
“I think that it’s refreshing to have people speaking on your behalf in this maze of lobbyists and legislators who don’t really understand the impact of their legislation and that the Legislature is more receptive when a family member represents his business as opposed to just a business owner. A lot of people vilify business owners, but they don’t really understand that family businesses primarily support their own family and the families of their employees.”
Jim Relles
Jim Relles, the second-generation owner of Sacramento’s beloved Relles Florist – soon to mark its 78th anniversary – said his company is a member because FBAC’s mission is so important.
“It’s so important to get the word to the public and the legislators how important family businesses are,” Relles said. “I mean, you constantly hear the politicians always say that small business is the backbone of America. But I would say probably 90% of small businesses are family businesses, so it just goes hand in hand.”
Relles also pointed out the difference between family businesses and corporate ownership: family businesses treat employees like family.
“We’re involved with the employees, we care about our employees, and they work together with us. We’re close to them, and we’re very fortunate that is the case,” he said. “We had one employee who recently retired. I think she was with us for 40 years. She was a hearing-impaired lady and we worked around her abilities.
“And we have a couple of other ones who are reaching 30 or 40 years, and I sometimes think that I must be doing something right that they want to stay. I think they do because they know we’re a family business.”
Another beloved institution is Frank Fat’s restaurant in downtown Sacramento, which has been serving great Chinese food and being the place legislative deals are made since 1939. Kenneth Fat, Frank’s son and a prominent area dentist, said the family business is an FBAC member because members have common issues.
“We’re a family business, right? And, of course, the business climate in California and Sacramento has been tough. It’s a great, great challenge. And so it’s interesting to compare notes, discuss similar problems and how we’re going to approach them politically and businesswise and, personally,” said Fat, whose son, Jerry, is the company’s CEO.
He added that how to transition from generation to generation is also a reason to belong.
“You know, time goes by, and our generation will be gone, so what do we do next and how do we do the transition?” he said.
Fat echoed Relles about the difference being a family business makes.
“We have a lot of long-term employees. I was just speaking to one waiter for example. I think he’s been with us close to 30 or 40 years. He’s doing well and told me his youngest son graduated from UCLA, with a Ph.D. So here’s this young waiter building his family while he started as a waiter and he’s been able to support his family,” Fat said.
“And I think I think he likes working in a family business. He likes knowing the owners. He likes the personal aspect versus corporate, you know. We have several employees who have worked for us for 20-plus years. And we’re proud of that.”
Cameron Rappeleye
FBAC Sponsors also see the value in supporting family businesses. Cameron Rappeleye is an interim vice president and partner with InterWest Insurance who has emerged as an evangelist for the Association, having recruited five new members last year alone.
“I went to an FBAC meeting last year and what really sparked my interest was what they were trying to accomplish with PAGA reform, which was taking the attorneys out of it and actually thinking about the employees. I sent that information to about 10 family business clients and five came back and said they were interested in learning more,” he said.
“This was a group that was specifically built over 10 years ago to fight for reforms versus just complaining about things and hoping something gets done.”
He also tells prospective members about the networking opportunities.
“These are pretty intimate settings, right? If you just walk across the room, you get to meet Ken Monroe of Holt Caterpillar. That’s not available for most business owners. There are people you’re going to meet that you would probably never cross paths with in everyday life,” he said.
After 145 years in California, Chevron finally threw in the towel and announced last week that the company had had enough and was relocating its corporate headquarters from San Ramon to Houston effective Jan. 1.
The San Francisco Chronicle reported that during the next few years, some 2,000 corporate positions will be shifted to Houston, joining the 7,000 corporate employees who have been relocated there in recent years.
Given California’s relentless push to eliminate the use of fossil fuels – despite the fact the state generates less than 1% of the world’s carbon emissions and thus its actions will have no significant impact on worldwide climate change – it was probably inevitable that the country’s second-largest oil company would move its corporate operations to a much more business-friendly state.
While Chevron CEO Mike Wirth said the move was made to “enable better collaboration and engagement” with other executives, employees, and partners and remains committed to its refineries and other oil-related operations, the company stated that the state’s regulatory climate was a factor.
“We have previously stated that we believe state policy makers have pursued policies that raise costs and consumer prices, creating a hardship for all Californians, especially those who can least afford it. These policies have also made California investment unappealing compared with opportunities elsewhere in the U.S. and globally,” the company said. “Texas offers a business-friendly environment, a more affordable cost of living, and better proximity to key counterparts in the service sector, our industry and academia.”
Jim Wunderman, CEO of the business-backed Bay Area Council, said state officials needed to take a hard look at what their actions are doing to the economy.
“Chasing jobs and employers out of California is no way to run the economy,” Wunderman said in a statement. “It’s an embarrassment for California that we’ve lost so many global companies because of misguided policies that make it incredibly difficult to do business here. California’s elected leaders need to take stock of the decisions they’re making that affect millions of families and workers, impact the state budget and have grave consequences for the future economic health of this state.”
FBAC has been carrying that message to lawmakers, the Governor’s Office and regulators since our founding 12 years ago. Unfortunately, too many policymakers just don’t understand how businesses and the economy work. Perhaps this blow to the state’s ego will help.
Unfortunately, Governor Gavin Newsom’s spokesperson basically said goodbye and good riddance in a statement to the Chronicle. “We’re proud of California’s place as the leading creator of clean energy jobs — a critical part of our diverse, innovative, and vibrant economy.”
But there may be more to the story. CalMatters columnist Dan Walters pointed out that Chevron’s exodus from California may not be done quite yet.
In his column today, the veteran newsman noted that Chevron has warned state officials it might close its two refineries in the state, which are major producers of the state’s unique gasoline blend.
Voters in Richmond, the site of one Chevron refinery, will decide in November whether to impose a special tax on the refinery, $1 per barrel, and the company has accused Richmond’s leaders of “playing chicken” with their largest taxpayer and employer.
Politico reported that Andy Walz, a top Chevron executive, warned in an interview about the potential consequences of the Richmond tax measure. “I’m not going to tell you that that’s the death knell, but we’re getting close,” he said, adding, “if I can’t invest there, and I can’t get a return, we will move on.”
Newsom and other California politicians openly intend to eventually shut down the oil industry to reduce the state’s carbon footprint. But they want a gradual reduction so many millions of gasoline-powered cars still on the road can run until phased out.
Were Chevron and other producers to decide, as Walz warns, that continuing operations in a politically hostile California no longer pencils out, the state could see an abrupt and economically devastating fuel shortage.
