Today I had the pleasure of attending an online webinar for the Temecula Valley Chamber of Commerce. The topic was a legislative Summit discussing federal and state issues affecting businesses.
The webinar featured Senator Melissa Melendez Assembly Member Kelly Seyarto, and Allan Zaremberg from the California Chamber of Commerce. The speakers discussed Covid-19, water issues, stimulus, gas vehicle issues, climate change housing and wildfire mitigation.
Here are some key take-aways:
On Covid:
Senator Melendez stated that she suspects another significant CA lockdown from Governor Newsom and the next few days. Allan Zaremberg added that he believes that the level of lockdown will correspond to the hospital capacities and the availability of ICU beds.
Hospital capacity numbers have been the standard metric for many of the decisions made across the country during Covid. A possible solution would be to stop all elective surgeries (again), and re-assign hospital staff to prepare for the expected Covid surge that Newsom is basing his decisions on.
Recall that hospitals previously suspended elective surgeries, due to Covid and as a result lost lots of money!
Hospitals were laying off staff at a time when there was a supposed need for healthcare workers. Hospitals make money off of those elective surgeries, so don’t expect them to raise their hands to do the same again this time.
Senator Melendez indicated that she would like to see local control over the level of shutdowns rather than a statewide mandate. This would allow local leaders to make health decisions based on the needs of the community. Clearly small businesses in California can’t withstand another complete lockdown. An estimated 30-40% of small businesses will close permanently, according to Zaremberg.
What does the community look like when commercial property and shopping centers become vacant?
Trashy.
Empty store fronts bring crime, tagging, and vagrants sleeping on the doorsteps. Any surviving business that has a vacant neighbor suddenly has to contend with those side effects, further increasing their operating costs.
Look closely as you drive through your hometown, and notice the businesses that are already empty.
Do they look like opportunities or the wrong place to stop and ask for directions?
Another shutdown on small businesses will be devastating for all of California.
An interesting comment brought up was that people that are currently under lock down in Los Angeles are simply going to another county to eat and shop.
This is true, as my friend that lives in L.A. just asked me if the wineries are still open, because she’d like to go out on a date...
This, as she insists on quarantining from everyone else in her family…
So lock downs clearly won’t stop people, even virtue signaling people, from secretly living their lives in other (relatively) free areas.
Assemblyman Seyarto indicated that he would like to see relief money be diverted to small businesses. I agree, because that money would (likely) help owners keep employees working, keep their restaurant or store open to serve the community and continue to generate tax revenue.
On revenue:
Some good news brought up in the webinar, was that California just found $26 Billion somewhere in the state coffers. This would be a great chunk to put towards getting California back to work safely. However, as Zaremberg joked, that $26 Billion will likely be used towards the legislature’s $50 Billion dollars worth of “
Good Ideas” i.e. it’ll just be wasted.
On Climate:
As if Covid shutdowns weren’t enough to crush businesses in California, anyone that survives should start saving for the 2035 mandate to eliminate fossil fuel usage. A nice goal, but unlikely to achieve in 14 years...given that businesses are drowning.
Senator Melendez had a similar view, saying that California can’t rely solely on electric power but should instead add it to our portfolio.
Unfortunately the extreme progressives have an environmental stranglehold on the legislature, and any headway towards balancing our power usage between fossil fuels as well as renewable energy is proving difficult.
A 2019 study on oil and gas in California found that the industry produces $21.6 Billion in state and local tax revenues, creating 365,970 jobs that pay an average higher wage of $80,000/yr.
What happens when we lose all of
those jobs too?
All electric sounds nice until the seasonal Santa Anas hit California each year and the power grid is shut off.
Oops, how will evacuees leave their homes if their electric vehicle can’t be charged?
How will the town supermarket keep food from spoiling so people can eat?
What will restaurants cook with when natural gas is banned? Electric stove tops, ovens and fryers? These all consume massive amounts of electricity to run. That’s an additional equipment cost for small businesses that they can’t afford. That cost is passed onto you the consumer. And, don’t forget that their building had better have solar panels on top powering the place, so make sure to add that to costs as well.
This was a disheartening topic to hear about, as switching to all electric will hurt everyone in some way.
Businesses will fold, but this will apply to personal homes as well.
Consider how expensive it is to buy a small, old fixer-upper in California… it’s expensive right? Then add a mandated $15,000 dollar solar system to the roof within the next 14 years (2035 mandate).
Start saving Mr. Homeowner!
Home prices will go way up, and homeowners will need to switch home appliances from natural gas over to electric. I hadn't considered any of this when I first heard about the 2035 mandate. I'm not sure how this will all turn out.
Assemblyman Seyarto put it best in saying that California will need to balance its power sources and that it needs a reasonable timeline.
California will pay the (economic) price for making a statement to the world that has no overall effect on global climate change. Melendez added that California will have a wake-up call only after revenue drops.
Clearly, Newsom and company have not considered the side effects of eliminating all fossil fuels.
On Housing:
The webinar panel addressed legislative housing concerns as well. Zaremberg expressed that housing supply in California is low because CEQA regulations won’t allow cities to build.
There is little to no local control (similar to Covid business mandates) and that slows development progress. Additionally, environmental groups and slow growth people use CEQA regulations to delay or stop new homes from being built.
While well intended, I’m sure… these regulations and environmental advocates are using an extremist approach to protecting their interests rather than meeting in the middle. They are completely halting development, which makes all of our housing costs ridiculously high.
Because of these environmentalist "ideals" developers and investors have very little incentive to build anything new in California. These laws make it too expensive to build homes, and the homes that are being developed start around $700,000, hardly a reasonable price for most people.
Instead of new homes proponents of CEQA and slow growth push for cities to allow single family homes to add ADUs or 2-3 units on the property. This in turn increases density in neighborhoods without increasing parking spots, street sizes, parks, schools or hospital capacity… the very metric threatening our current Covid status.
It’s easy to assess what a neighborhood looks like in high density areas, just drive through areas of L.A. like Boyle Heights, Alhambra, or Downtown.
It's the perfect time right now, there should be zero traffic...since it’s shutdown.
The over all message is that as Californians we need to be aware of these issues and speak up. We must get involved and make our voices heard, otherwise we are in for a long, painful ride... but i guess we'll be in it
"together"