Traffic fees would rise from $20 now to $60, on top of the ticket's fine.
Parking violators would pay $3.50 extra and traffic school students, $40.
A one-cent statewide sales tax increase as early as January
to help close the gap in California's $16-billion budget deficit.
Suspension of the net operating loss deduction for two years.
Advancement of tax deadlines for limited liability corporations.
An increase in workers' comp benefits for the partially disabled.
But you can count these measures out, likely to be vetoed:
Paid sick leave. Employers won't have to provide it.
Workers taking medically prescribed marijuana. Forget about a law
that would make companies hire or retain employees who get the treatment.
Green buildings. No requirement for "zero net energy" homes.
Prevailing wages. State inspectors won't interview workers
on public works projects to see if the required wage rules are enforced.
Global warming fees. They won't be assessed by Los Angeles County
on fuels or vehicle registration to pay for greenhouse gas reductions.
Also forget these, which haven't cleared either house:
A tax on Internet downloads of movies, games and music.
A 1% surcharge on income tax for those earning over $1 million.
Green building requirements on commercial structures.
 Alternative energy firms crave desert land to set up power plants
running on solar, wind and geothermal energy. Demand is so strong
that the federal Bureau of Land Management isn't taking new applications
for solar power projects, the most popular plants being proposed.
Companies are meeting opposition from local conservation groups
and off-road-vehicle organizations, which don't want the land disrupted.
The BLM oversees 11 million acres of mostly desert Southern Calif. land.
Downtown Los Angeles condo projects are being converted to rental
as credit tightens up. The new TenTen Wilshire's 227 units were planned
as for-sale units but will be marketed now as temporary rental housing
for corporate customers. Rentals will cost $3000 to $10,000 per month.
L.A.'s Little Tokyo Shopping Center will become a Korean mall,
a sign of the growing influence of South Korean investors in the area.
Korean-American businessmen who purchased the Little Tokyo center
will evict Japanese firms. Some retailers will relocate in Torrance.
Chances are good for extending the Gold Line Foothill train
from Pasadena to Montclair. A bill to permit a local vote on a tax hike
financing the plan has good prospects this year in Sacramento.
Industrial property is still in demand in the Torrance area.
Storm Properties will put up three buildings totaling 182,189 sq. ft.
in the second phase of the 400,000-sq.-ft. Storm Business Park.
The buildings are for distribution centers, warehouses and factories.
 DHL's distribution hub at March Air Reserve Base is in jeopardy
because parent company Deutsche Post wants to outsource shipments
to DHL's competitor, UPS. Even if a UPS-DHL deal is reached this summer,
it will probably undergo a tough examination by antitrust authorities.
San Bernardino's airport will get a boost with a new hangar
that will house corporate jets. Million Air Interlink of Houston
is in talks to lease the 65,000-sq.-ft. hangar at the former Norton AFB.
 Mayor Jerry Sanders will have trouble getting a friendly majority
on the city council in the fall election to support him
and his probusiness plan. His success may have ended with his re-election
on June 3 and voters' approval of three financial ballot measures.
Democrats will be able to fight off his reform programs
unless Republicans can gain two of the three council seats at stake.
That will be difficult in the general election, when new voters
drawn in by Sen. Barack Obama's campaign will help Democrats.
 Santa Barbara County's housing market won't recover until 2010,
according to the UCSB Economic Forecast. In the first quarter,
60% of single-family home sales were of bank-owned properties.
But a good retail market and a healthy wine industry will help the area.
Ground will be broken on two Lompoc wineries this summer.
Sea Smoke Cellars and Cerdoc LLC plan facilities on adjacent lots.
A winery with no wine tasting is in the works for Santa Ynez
under an agreement negotiated by Happy Canyon Winery with neighbors,
who worried that public wine tastings would bring heavy traffic.
Santa Maria is gearing up for a major housing/commercial project
called Mahoney Ranch South. Once 319 acres of farmland are rezoned,
developers will build 1405 homes, a shopping center and a school.
 Area home prices probably won't rise again for another two years.
Even when sales pick up, there are too many foreclosed homes
on the market for a quick rebound from a nearly 50% price drop.
A lighting manufacturer will open a Stockton distribution center
at Massie Industrial Park. TCP Inc., which makes energy efficient lights,
is moving out of a smaller warehouse and office facility in Sacramento.
Fertilizer costs are hurting farmers, who are shelling out double
the $300 per ton they paid last December. One reason: The high demand
for fertilizer to produce animal feed for rapidly developing nations.
Cool spring weather will slow growth in fruits and vegetables.
Melons, tomatoes and corn are ripening up to two weeks late this year.
Expect higher prices for these crops at the supermarket in coming months.
 Development of S.F.'s Hunters Point is assured with passage
of Proposition G by voters. Approximately 10,000 homes
and 700,000 sq. ft. of retail space are planned at the former shipyard.
A new stadium will be built for the 49ers, if they choose to stay in S.F.
A hotel on Alcatraz Island? It could happen. That's one option
being considered by the National Park Service in long-range planning.
Officials want to attract more visitors to the former prison fortress.
The Port of Oakland is scaling back as Asian imports diminish,
oil costs rise and the economy softens. About 60 workers will lose jobs.
Chevron will expand its Richmond refinery after calming critics,
who want to limit the amount of crude oil the plant could produce.
Google will build an office complex at NASA Ames Research Center
near Mountain View with about 1.2 million sq. ft. of research facilities
and offices. The complex, which could accommodate up to 5000 workers,
will have employee housing and sports and conference facilities.
Silicon Valley's solar power companies are holding back hiring
to see whether Congress will extend the solar tax credit beyond Dec. 31.
If it doesn't, customers will lose credits of up to 20% for installation.
We think the solar credit will be extended. But layoffs may come
if Congress delays action and equipment buyers put off purchases.
Voters are becoming more sympathetic toward new construction.
Eminent domain can still be used for economic development
because of the June 3 defeat of Prop. 98. It was the second loss
in two years for groups trying to limit the seizure of private land
for localities' development projects...not just public infrastructure.
But owner-occupied homes can't be seized for private projects
because of the passage of Prop. 99, a milder statewide initiative.
On the local level, developers are also rebounding politically.
Napa County rejected a 1% annual growth cap on unincorporated areas.
In Santa Paula, Ventura County, a measure extending the boundaries
to permit development of 1500 homes received 83% of the vote.
Thousand Oaks refused to require ballot approval of big projects.
One reason for the local about-face: Low voter turnout.
More Democrats and antigrowth voters will show up in November. |
 Luxury markets are barely feeling the pain of the downturn
that is sweeping low-end markets of the state's inland regions.
High-end price dips are far short of the state median 32% one-year drop.
In Southern California, sales are strong in Beverly Hills
and parts of Los Angeles, Pasadena and Orange County luxury zones.
A home sold in a posh section of Beverly Hills for $5.25 million,
$500,000 over the asking price. One in Brentwood listed at $4.75 million
received multiple offers and finally went for $5 million, all in cash.
Another in Beverly Hills gained $1.3 million in value since 2006.
In Northern California, San Francisco, southern Marin County
and Peninsula neighborhoods are holding up well. In the East Bay,
Lafayette, Orinda and Moraga are strong in a weak submarket.
Eventually, the credit crunch will make a dent in these areas.
Wealthier homeowners can hold out longer before selling at a loss.
 Many employers will reexamine benefits for same-sex couples
now that the State Supreme Court has validated gay marriages.
California already requires that such partners get an even break
on benefits such as health care and Medi-Cal. But firms will be pressed
by some employees to provide other benefits covered by federal laws.
A worker shortage looms in the state's construction industry
as aging baby boomers retire. About 200,000 apprentices will be needed
in the next 10 years to learn the skills for building highways
and other infrastructure projects funded by $42 billion in bonds.
Those needed: 73,000 carpenters. 15,000 operating engineers.
And 25,000 plumbers, pipefitters, steamfitters and electricians.
 Businesses with good safety records will get large rate discounts
from the State Compensation Insurance Fund, the biggest insurer
in California. Companies will get an increase in the "claims-free" credit
of about 10% to 15% on average if their safety figures qualify.
Rates won't change after July 1 for most firms that can't get the credit.
Look for some carriers to issue fewer policies in California,
as payouts for injured workers grow and the firms' profits decline.
Most of the savings from the 2004 reforms have already been realized,
and insurers are skittish about prospects for future cost increases.
(Note: This item reflects a correction made after original publication.)
One reason: New rules raising payments for some injured workers.
The California Division of Workers' Compensation wants to boost benefits
for those with permanent injuries by 16%. Payments would be increased
from $7693 to $8153 for a permanent shoulder injury, $14,490 to $15,775
for a permanent hip injury and $6003 to $7521 for a lengthy ankle injury.
A new crackdown is coming on employers that don't buy coverage.
The Calif. Department of Industrial Relations will cross-check records
with the Employment Development Department, Uninsured Employers' Fund,
rating agencies licensed by the Insurance Commissioner and other sources.
Under a law approved in 2007, the agency can draw funds for enforcement
from the Workers' Compensation Administration Revolving Fund.
For editorial information call us at 202-887-6462
©2008 The Kiplinger Washington Editors
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