Economist Survey on California Examines Effects of SB 2, Other State Laws
The Economist this week in a special survey on California examined the effect of regulations and laws such as SB 2 that are "gradually destroying" the competitive advantage of the state by "snarling up its businesses in unnecessary red tape" (Economist, 5/1). SB 2 will require some employers to provide health insurance to workers or pay into a state fund to provide such coverage. Under the law, scheduled to take effect Jan. 1, 2006, employers with 200 or more employees will have to provide health insurance to workers and their dependents by 2006 or pay into the state fund. Employers with 50 to 199 employees will have to provide health insurance only to workers by 2007. The law will exempt employers with fewer than 20 employees. The law also will exempt employers with 20 to 49 employees unless the state provides them with tax credits to subsidize the cost of health insurance for workers. A coalition of business groups has sponsored a measure on the November statewide ballot that would repeal the law (California Healthline, 5/5). According to the Economist, some companies in the state have begun "arranging themselves so they will never have more than 19 employees" to avoid the requirements of SB 2 (Economist, 5/1). The survey also includes articles on government structure, immigration, the environment, the technology industry, education and reform proposals.
Additional information on SB 2 is available online.