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In weak state economy, business lobby wields strong influence

Hector Amezcua/The Sacramento BeeLobbyists wait to testify before the state Assembly Committee on Utilities and Commerce.

Business interests were the top bill-killers inside California’s Capitol during Gov. Jerry Brown’s first year back in office, as concerns about the state’s weak economy cut into labor’s newfound clout.

Legislative data shows business interests wielded strong influence despite a Capitol dominated by Democrats in the Legislature and governor’s office. Business lobbyists defeated bills that would have cut back various tax breaks, required employers to give workers unpaid bereavement leave and prolonged the foreclosure process.

In the current economy, "all legislators are more sensitive to the argument that something would be a job killer or harmful for investment or expansion," said Dorothy Rothrock, a lobbyist for the California Manufacturers and Technology Association, which represents major businesses around the state. "That’s made it easier for us to stop or amend bills to make them less hostile or burdensome."

Brown’s current term has been good for labor unions, too. They successfully pushed bills that limit the state’s ability to use private contractors, allow local governments to require union construction crews on public works projects and reduce the use of electronic self-checkout lanes in grocery stores.

But in the tug-of-war between the Capitol’s two power players, industry more than held its own. Business-related groups dominated the list of organizations with the most influence, according to a review of hundreds of bills.

The Sacramento Bee and California Watch examined the final analyses written by legislative staff for all 906 bills introduced this year that listed supporters and opponents. For each group whose stand was registered on at least 10 bills, the news organizations tallied the number of cases in which supporters’ bills were signed by the governor and opponents’ bills stalled or were vetoed. Either scenario counted as a "win" for that group.

While such a tally is imperfect – it does not assess all influence exerted under the dome – it captures the outcome of the legislative year for many who carry clout at the Capitol.

Interviews with dozens of key players confirmed a trend suggested by the numbers: The weak economy was a major factor as groups decided which bills to push and lawmakers made up their minds.

Angie Wei, a lobbyist for the California Labor Federation, said 2011 was better for workers "than under any year under Arnold Schwarzenegger." Even so, Wei said the state’s financial reality made her union less aggressive.

The labor group sponsored AB 400, which would have required employers to provide paid sick days for their workers. But Wei said the union asked lawmakers to hold the bill in committee because "we didn’t think it was the right time to do it."

Among other findings:

  • Labor and business wielded their power differently. Labor groups generally won by passing new laws, while business groups mostly fought battles to maintain the status quo.
  • The two groups that prevailed on the largest number of bills this year were the California Chamber of Commerce, which won on 62 of 87 bills, and the American Federation of State, County and Municipal Employees, which triumphed on 61 of 106 bills.
  • Associations representing Realtors, bankers and insurance companies took positions on far fewer bills, but won at least 85 percent of the time.

Hector Amezcua/The Sacramento BeeFormer GOP Assemblywoman Bev Hansen, now a lobbyist, huddles with with Sen. Lou Correa, D-Santa Ana, at the state Capitol.

Interest groups exerted their influence with money – combined, they spent a total of $216.1 million on lobbying in the first nine months of the year, a 6 percent increase from the year before.

But the spending didn’t always guarantee victory in 2011. The California Manufacturers and Technology Association spent $1.9 million while winning half its legislative battles.

The American Civil Liberties Union and Sierra Club, meanwhile, each spent less than $350,000 on lobbyists during the first nine months of the year, yet did well in a Legislature in which majority Democrats are sympathetic to their causes.

Spending doesn’t always bring lobbying success

Campaign spending on legislative races likewise didn’t necessarily result in a high success rate in the Legislature. The 15 groups that spent the most on winning legislative candidates and took positions on at least 10 bills had an average win rate in the Capitol of 63 percent.

Still, special interests and other donors spent $229 million in political contributions on state candidates in 2010, $105.8 million of it on candidates for the Legislature, according to the National Institute on Money in State Politics. They contributed $36.3 million more to state candidates through independent expenditure committees, which cannot legally coordinate with candidates’ campaigns but can spend an unlimited amount to support or oppose a candidate.

The business lobby wielded much of its influence through JobsPAC, a political action committee that collects millions from insurance, oil, tobacco, pharmaceutical and other companies to make independent expenditures in key races. Last year, the committee spent $9.2 million statewide, a portion of it supporting candidates thought to be business-friendly in four key Senate districts: Republicans Sam Blakeslee of Santa Maria and Anthony Cannella of Ceres and Democrats Juan Vargas of San Diego and Lou Correa of Santa Ana.

By session’s end, Blakeslee and Cannella voted the California Chamber of Commerce’s way on each of the 13 important business bills listed in the chamber’s scorecard. Correa went the chamber’s way 69 percent of the time, tops among Democrats.

Some groups that spend a lot on lobbying and political contributions show up on few bill analyses, making it hard to measure how much they win. Interest groups typically wind up named as supporters or opponents on a bill analysis because they sent lawmakers letters stating their position. But nothing compels a group to write such letters. Some entities prefer to lobby by meeting privately with legislators, and legislative committees have different approaches to determine whom to list in their bill analyses.

But the findings broadly illustrate that business did better than might have been expected at the Capitol, where Democrats control both houses of the Legislature and, after several years under Schwarzenegger, now occupy the governor’s office as well.

Business lobby plays defense

The political domination of Democrats means many Republican bills carrying ideas generated by business interests did not proceed very far in the lawmaking process. Bills sponsored by labor groups were more likely to pass through the Democratic-controlled houses and make it to the governor’s desk.

Yet even with a Democratic governor who received much of his campaign backing from labor unions, business interests still held sway – albeit mostly by playing defense. Labor lobbyists, meanwhile, said they were more selective than usual in advancing bills that would cost money and put lawmakers in an unpleasant political situation.

About this story

The Sacramento Bee and California Watch examined hundreds of bill analyses written by legislative staff. We looked at the most recent analysis of all 906 bills that listed both supporters and opponents.

For each group listed on at least 10 bills, we tallied the number of cases in which supporters' bills were signed by the governor and opponents' bills stalled or were vetoed. Either scenario counted as a "win" for that group.

This methodology shows the influence of large associations that openly communicate their positions, but does not provide a perfect reflection of what occurred during the legislative session. Some groups actively lobby bills, but are not recorded in the analyses as officially for or against them. Groups may change or remove their position from an analysis as a bill evolves. The data in this story shows public positions recorded in the final analysis of each bill.

Some groups that spent the most on lobbying in 2011 do not show up in the data because they recorded positions on fewer than 10 bills. This could be because they did not register positions on all the bills they lobbied and/or because they spent significant resources lobbying outside of the Legislature, trying to influence the state bureaucracy's rule-making process.

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"The arguments business has made, that companies and job creators have made for years, are resonating more with Democratic legislators given the (state’s financial) situation," said Robert Callahan, a lobbyist for TechAmerica, a trade group that represents roughly 1,000 technology companies.

TechAmerica succeeded on 11 of the 12 bills on which its position was listed in an analysis.

Two key victories, Callahan said, were defeating legislation that would have rolled back some tax credits. One, SB 508, proposed including "sunset" dates in all new tax break programs so they would be phased out after a period of time. Another, SB 364, sought to allow the state to charge a fine and take back the money from a tax incentive if a company laid off at least 10 percent of its employees in a year.

Labor unions supported both bills, arguing that the state should be more careful about handing out tax breaks, given the ongoing budget crisis. TechAmerica and other business groups opposed them, saying the first bill painted all tax breaks with the same brush and the second created too much uncertainty for employers. Brown vetoed both bills with short messages saying they were too broad.

The vetoes also stack up as wins for the California Taxpayers Association and California Chamber of Commerce, which joined TechAmerica in opposing both bills. The chamber had a good year, despite supporting Brown’s Republican opponent, Meg Whitman, in last year’s gubernatorial race. In the Legislature this year, chamber lobbyists fended off 25 of the 30 bills the group labeled "job killers." They successfully persuaded Brown to veto four of the five that made it to his desk.

"From a political standpoint, when the economy goes down and business is what can bring you back, then people listen to business," said Marc Burgat, vice president of government relations for the California Chamber of Commerce.

One of the so-called "job killer" bills Brown vetoed was AB 325, which would have required employers to offer up to three days of unpaid bereavement leave to workers who lose a loved one. The chamber made the case that California already requires several types of leave and adding another would be a burden on employers who may be juggling requests from several workers. It also argued that the bill would have established broad rights for workers to sue, a view that was repeated in Brown’s veto message.

After Brown finished considering the bills on his desk in mid-October, the chamber produced a two-and-a-half-minute video praising the governor and touting the success of its "job killer" lobbying campaign.

"As business grows, we employ more people, we pay more taxes and the general fund grows," Burgat said. "I think that message has resonated."

Labor union registers many positions

AFSCME – the labor union that represents 1.6 million public-sector workers – produced a full-color 44-page report to wrap up its year of legislative influence.

"Much of AFSCME’s hard work during last year’s election season has come to fruition for us this year," the report says. "With the election of Jerry Brown, AFSCME has been able to enjoy a greatly improved relationship with the Governor’s office."

The union sponsored 20 bills in 2011. Twelve of them made it to Brown, who signed nine. Among them: AB 366 benefits mental hospital employees by streamlining court procedures for giving anti-psychotic medication to certain patients, SB 857 strengthens public employees’ right to strike, and SB 930 removes the fingerprinting requirement for recipients of In-Home Supportive Services.

But AFSCME took positions on dozens more bills, sending a letter to lawmakers on almost every one. That broad approach is typical of the union’s lobbying strategy, said AFSCME lobbyist Willie Pelote.

"We take positions on a large number of bills because we care about the communities in which our members live," he said. "We care about how our streets look, how our schools are."

The union also makes its case by getting lawmakers to see firsthand the work its members perform. AFSCME takes legislators on field trips to accompany laundry workers in hospitals, custodians in mental health centers and caretakers who go house to house feeding and bathing the infirm.

"That is a very good tool for them to see it and smell it and taste it, instead of them going to Hawaii to do it," Pelote said, making a reference to the annual trip some interest groups sponsor for lawmakers to attend.

Yet even with the all of the positions AFSCME took this year, the state deficit caused the union to hold back on pushing for many new laws it would have liked to introduce, Pelote said. Other unions echoed that sentiment.

"During this fiscal crisis, we've pulled back half our bills we want to run because they’re just not a reality. Either they have a dollar amount or we don’t want to put members in that position of having to go after something that’s tough right now," said Randy Perry, a lobbyist for several law enforcement unions.

"The times have changed the last couple years, even on what we’re introducing. It’s a stalemate right now because of the economy."

Rosenhall is a reporter for the Sacramento Bee. Davis is a reporter for California Watch. This story was produced as a collaboration between the Sacramento Bee and California Watch. It was edited by the Sacramento Bee's Dan Smith. It was copy edited by Nikki Frick.

Filed under: Money & Politics

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