The Small Manufacturers Association of California (SMAC)  board of directors has reviewed the May 19, election ballot and  is recommending that voters vote NO on 1A, NO on 1B, NO on 1C, and YES on 1D, YES on 1E and YES on 1F The SMAC board voted unanimously on the no vote for first three ballot issues while three-fourths of the members voted yes for the last three issues.

BUDGET RELIES ON VOTERS
On May 19 voters are being asked to approve six ballot measures which supporters argue would set a cap on future state spending, and institute a “rainy day” fund, authorize the state to sell bonds based upon future lottery revenue, shift money from certain social programs and guarantee billions more for schools.
 
A California Legislative Analyst Office (LAO) report has said “the budget package relies on the passage of three ballot measures to provide nearly $6 billion in 2009–10 solutions—$5 billion from the borrowing of future lottery profits (Proposition 1C), about $600 million by redirecting dedicated childhood development funds (Proposition 1D), and about $230 million by redirecting dedicated mental health funds (Proposition 1E). If these measures were to fail, the legislature would need to quickly develop even more solutions before the start of the fiscal year as alternatives.
 
“In future years, if all six measures on the special election ballot were to pass, the state’s finances would be affected in a number of ways. Propositions 1D and 1E would provide General Fund relief for a limited number of years. On the other hand, under our (LAO) projections, Proposition 1B (education supplemental payments) and Proposition 1C would drive up General Fund costs by more than $1 billion annually by 2013–14.
 
“The fiscal effect of Proposition 1A, dealing with the Budget Stabilization Fund (BSF) “rainy day” reserve, is the most uncertain. While the measure would help balance future state budgets by extending recent tax increases for up to two years, it could also take billions of dollars “off the table” by requiring their deposit into the BSF. If the state is not always able to access these funds under Proposition 1A’s rules, the state’s budget shortfalls would grow even further in some years,” the LAO said.

SIX MEASURES ON MAY 19 BALLOT
The first five of six ballot measures on the May 19 ballot, must pass or the February budget compromise will be unworkable. The six measures and their ballot titles are:
Proposition 1A:”RAINY DAY” BUDGET STABILIZATION ACT. This is a very complex proposition. The Secretary of State claims it changes the budget process. They allege it could limit future deficits but if passed will result in $16 billion in higher state taxes.
 
Proponents say Proposition 1A is “meaningful, long-term reform. It will help stabilize future state spending and create an enhanced rainy day fund to save during good times so money is available when the economy falters.”
 
Opponents say “the expanded "Rainy Day Fund" will become a slush fund. The fine print allows unlimited "Rainy Day" funds to be spent on borrowing and “Pork Barrel” spending. More borrowing means more funds will have to be diverted into the slush fund to reach the 12.5 percent of annual budget goal—that's more than $13 billion.
 
The SMAC Board recommends a NO vote on 1A.
 
Prop 1B: EDUCATION FUNDING. PAYMENT PLAN (1A and 1B are tied together. Prop 1B can only pass if Prop 1A passes. If 1A fails Prop 1B automatically fails.)
Proponents of Prop. 1B say “California schools have been hit very hard by the state budget crisis. Education spending has been cut by over $12 billion. These horrific cuts have forced the layoff of more than 5,000 teachers and threaten the jobs of at least 13,000 more.
 
Opposition: while there is no formal opponents statement in the ballot booklet numerous groups and California newspapers are urging a no vote. For example the Riverside Press-Enterprise states “Political expediency, and not sensible policy, drives Prop. 1B. The governor and legislature wanted to forestall opposition to the other measures on the May 19 ballot. So legislators addressed an ambiguity in state law by trading potential savings now for greater long-term costs -- and all without clarifying the underlying legal confusion. Voters should reject Prop. 1B, the paper said. The Los Angeles Times also urges a no vote on this measure.
 
The SMAC Board urges a NO vote on 1B.

ROBBING PETER TO PAY PAUL
Prop 1C: LOTTERY MODERNIZATION ACT. This bill would permit the state to sell bonds and borrow $5 billion based upon future lottery income.
 
Proponents argue “By modernizing our state lottery, Prop. 1C will immediately raise $5 billion in new revenues without increasing taxes. Our lottery is out of date and underperforming. With a few simple changes our lottery can bring in much more revenue to the state”$5 billion immediately without costing taxpayers a dime, while protecting funding levels for schools currently provided by the lottery.”
 
Opponents argue “The California lottery should be left as the voters originally intended it to be. When the voters approved the lottery twenty-five years ago, they had a clear understanding of how the program would function. They knowingly placed restrictions on the operation of the lottery in order to limit its size and scope. The lottery has performed as it was designed to perform.“  ED. Note: Concurrently, but not affected by this ballot issue the state lottery plans to build a new $180 million headquarters. Efforts to reduce that to $40 million in the legislature was rejected.)

The SMAC Board urges a NO vote on 1C.
 
Prop 1D: CHILDREN’S SERVICE FUNDING This bill permits the state to take up to $608 million for the 2009-2010 budget and $268 million annually from 2010–11 through 2013–14, by temporarily redirecting a portion of cigarette tax funds from the California Children and Families Program to fund state health and human services programs for children up to age five.
 
Proponents say “Voting for this measure will not permanently shift these funds away from their original purpose. This solution will help solve California's current budget crisis and prevent further cuts in services to children under the age of 5. Please vote yes to help our state continue critical services to children under the age of 5.”
 
“Opponents say “Proposition 1D was placed on the ballot by Sacramento politicians who want you to trust them instead of the leading pediatricians, parents, teachers, nurses, and law enforcement officials who urge you to join them in voting no on Prop. 1D.
 
The SMAC board recognizes that the state has a serious fiscal shortage and believes these special interest social taxes should be diverted to the state’s general fund to pay state bills rather than being hoarded for future field trips for tykes.

Prop 1E: MENTAL HEALTH FUND. TEMPORARY REALLOCATION. This bill will also divert tax money away from special interest projects and to the general fund.
 
Proponents led by State Senate President Pro Tempore Darrell Steinberg state “As the co-author of Proposition 63, I support diverting funds from the Mental Health Services Act only as a last resort to help balance the state budget this year. California faces an unprecedented $42 billion budget deficit. Solving a budget crisis of this magnitude has been painful and difficult. Everyone has had to give something. But as a collective we must all share in the sacrifice to help put California back on track.”
 
State Senator Lou Correa argues “shifting Mental Health Services Act funds away from these programs will impede us from serving even more people. I recognize how difficult the current fiscal climate is. However, Mental Health Services Act programs are working and save the state money. We need to preserve programs that are effective and respect the will of the people. Please vote no on Proposition 1E.”
 
The SMAC Board agree with Senator Steinberg call for diverting these $230 million funds and urges a Yes vote on 1D.

Prop 1F: ELECTED OFFICIALS SALARIES. PREVENTS PAY INCREASES DURING BUDGET DEFICIT YEARS. This bill was approved as a bribe to GOP state Senator Abel Maldonado get his  budget yes vote.. It purports to encourage balanced state budgets by preventing elected Members of the Legislature and statewide constitutional officers, including the governor, from receiving pay raises in years when the state is running a deficit.)
 
Proponents say “Since 2005, legislators have had their pay increased three separate times. In four years their pay has increased nearly $17,000. Every year legislators have received a pay raise the state has been in a deficit.”
 
Opponents argue “The current salary for nearly all legislators is $116,208. In most of California, this is solidly middle-class compensation. Many small business owners, doctors, lawyers, engineers, and managers make far more. You may earn more or you may earn less, but you've got to admit that our elected leaders aren't getting rich on their salaries.  (Ed note : Legislative leaders also receive an additional $8,000 to $17,000 in pay annually and every member qualifies for an additional  $35,000 in tax free expenses. )
The SMAC board recommends a YES vote on 1F.)

WHAT HAPPENED TO SMAC vs. PRI?
By Brad Ward, President & CEO
Small Manufacturers Association of California

The conflict between Performance Review Institute (PRI) and SMAC is as real, and is even more viable than it was 18 months ago. The SMAC Board has steadfastly insisted on securing individual personal protection from the opposition as the process moves forward.  This took  a lot more time than originally planned.
 
A vital cog in the wheel was for SMAC to develop a background of acceptable and truly effective (to the government as well as to industry) alternative remedies to the issue of supplier quality assurance assessment and certification once Performance Review Institute (PRI) is excised from the equation.
 
The alliances necessary to establish in order to fulfill this most critical of requirements takes much time and requires the approvals of  a diverse group of corporate boards.  We now turn our main focus to completing the task of fund raising for this effort to gain additional momentum. We ask for your support.

KNOW THE LAW
The Alternative 10-40 Workweek

If your employees want to work an alternative 10-40 workweek you must meet the requirements in Labor Code Section 511 LC 511.

(a) Upon the proposal of an employer, the employees of an employer may adopt a regularly scheduled alternative workweek that authorizes work by the affected employees for no longer than 10 hours per day within a 40-hour workweek without the payment to the affected employees of an overtime rate of compensation pursuant to this section.
 
A proposal to adopt an alternative workweek schedule shall be deemed adopted only if it receives approval in a secret ballot election by at least two-thirds of affected employees in a work unit.
 
The regularly scheduled alternative workweek proposed by an employer for adoption by employees may be a single work schedule that would become the standard schedule for workers in the work unit, or a menu of work schedule options, from which each employee in the unit would be entitled to choose.

(b) An affected employee working longer than eight hours but not more than 12 hours in a day pursuant to an alternative workweek schedule adopted pursuant to this section shall be paid an overtime rate of compensation of no less than one and one-half times the regular rate of pay of the employee for any work in excess of the regularly scheduled hours established by the alternative workweek agreement and for any work in excess of 40 hours per week.
 
An overtime rate of compensation of no less than double the regular rate of pay of the employee shall be paid for any work in excess of 12 hours per day and for any work in excess of eight hours on those days worked beyond the regularly scheduled workdays established by the alternative workweek agreement.
 
Nothing in this section requires an employer to combine more than one rate of overtime compensation in order to calculate the amount to be paid to an employee for any hour of overtime work.
 (c) An employer shall not reduce an employee's regular rate of hourly pay as a result of the adoption, repeal or nullification of an alternative workweek schedule.
 (d) An employer shall make a reasonable effort to find a work schedule not to exceed eight hours in a workday, in order to accommodate any affected employee who was eligible to vote in an election authorized by this section and who is unable to work the alternative schedule hours established as the result of that election. 
 
An employer shall be permitted to provide a work schedule not to exceed eight hours in a workday to accommodate any employee who was hired after the date of the election and who is unable to work the alternative schedule established as the result of that election. 
 
An employer shall explore any available reasonable alternative means of accommodating the religious belief or observance of an affected employee that conflicts with an adopted alternative workweek schedule, in the manner provided by subdivision (j) of Section 12940 of the Government Code.
 (e) The results of any election conducted pursuant to this section shall be reported by an employer to the Division of Labor Statistics and Research within 30 days after the results are final.
 (f) Any type of alternative workweek schedule that is authorized by this code and that was in effect on January 1, 2000, may be repealed by the affected employees pursuant to this section.  Any
alternative workweek schedule that was adopted pursuant to (Industrial Welfare Commission) Wage Order Numbers 1, 4, 5, 7, or 9 of the Industrial Welfare Commission is null and void, except for an alternative workweek providing for a regular schedule of no more than 10 hours' work in a workday that was adopted by a two-thirds vote of affected employees in a secret ballot election pursuant to wage orders of the Industrial Welfare Commission in effect prior to 1998.

THOUSANDS OF STATE EMPLOYEE
RETIREES RECEIVE SIX FIGURE PENSIONS
California Foundation for Fiscal Responsibility, a Sacramento nonprofit organization has reported that 4,818 former state employees are annually receiving more than $100,000 in state pension pay. That number was from May 2008 and each month, an additional 120 retirees break the $100,000 barrier, the report said.
 
Those levels of compensation for state and municipal employees are unsustainable, said Marcia Fritz, vice chairwoman of the organization.
 
"We could run out of money, literally," Fritz said. "I'm worried about pension plans becoming insolvent. There will be dramatic cuts in services if we don't do anything to stop the flow of benefits concentrated on retirement rather than current employees."
 
Under California's system, it is possible for retirees to earn more from their pensions than they did while working.
 
In 2002, when the economy was booming most state and local governments instituted a 50 percent increase in benefits for active workers to "3 percent at 30," meaning employees with 30 years of service could receive 3 percent of their salary multiplied by the number of years they worked, or 90 percent, when they retired. After a few years of cost-of-living adjustments, some employees could see their pension benefits exceed their salaries while employed.
 
Before the increase seven years ago, most pension benefits were capped at 2 percent of the salary multiplied by the number of years of service.
 
And the pension benefits are blind to the status of the employee, meaning some retirees can return to work at another company or government agency, earning another salary as well as receiving the pension benefits.
 
The state's pension plan, known as CalPERS, has been battered by turmoil in the financial markets. Its portfolio has dropped about 27 percent since June 30, 2008, to $175.6 billion as of April 28, 2009.
 
Retirees' pension checks haven't been reduced following the market crash because the benefits are guaranteed by state law.
 
CalPERS passes through its costs to governments that use its fund, so cities and state government is on the hook for any shortfall. State pension managers have alerted state and local governments that premiums could rise beginning in June.