In 1517, Martin Luther published his seminal Ninety-five Theses, criticizing the issuance of “indulgences” by clergy. These were permits that supposedly reduced punishment in the afterlife for sins committed by the purchasers or even their loved ones.
The state Legislature must have missed the 507-year-old memo when passing Assembly Bill 1228 last year. The bill raised the hourly minimum wage for fast-food workers to $20 and created a government council to set “minimum standards on wages and develop fast food restaurant minimum standards on working hours, and other working conditions.”
While taxpayer advocates and other fiscal conservatives warned that the bill would authorize an indirect tax because it would significantly increase costs that would ultimately be paid by consumers, others noted that the bill also contained some questionable exemptions.
Notably, the bill exempted an establishment that “operates a bakery that produces for sale on the establishment’s premises bread.” It went even further to note that the exemption applied “only where the establishment produces for sale bread as a stand-alone menu item and does not apply if the bread is available for sale solely as part of another menu item.” Bagels and croissants aren’t included, and you had to be in operation on or before September 15, 2023.
Capitol watchers had been perplexed by the weirdly specific carveout. To what does this apply? Who benefits from it? When the governor was asked, he attributed the carveout to “part of the sausage making.” Then came an article from Bloomberg last week that sent Sacramento spinning.
“Governor Gavin Newsom pushed for that break, according to people familiar with the matter,” the article alleged. “Among the main beneficiaries is [Greg] Flynn, a longtime Newsom donor whose California holdings include two dozen Panera Bread locations.”
After hours of radio silence, the governor’s office finally responded to the reports. They called the article “absurd” and said their legal analysis showed that Panera didn’t qualify for the exemption. Panera mixes the dough offsite and delivers it to be baked at the store. That supposedly makes them ineligible. Their case rests on the meaning of the word “produces,” which, conveniently, is not defined in the bill.
While this seems like a “depends on what the meaning of the word ‘is’ is” kind of situation, let’s take the governor and his attorneys at their word for a minute. If they are correct, then it again requires us to ask, what does this apply to and who benefits from it? Naturally the author of the bill, Assemblyman Chris Holden, should know, right?
“We don’t know how that came about,” Holden’s chief of staff told Bloomberg.
When Holden was asked by reporters, he tried to claim that he had “inherited” the bill and the “fundamentals” were already in place. But this lame excuse doesn’t fly because anyone can track amendments on the Legislature’s own website. The exemption was amended into the bill in the final stages when Holden’s name was already on it. When confronted with that, Holden said even though he is “author” of the bill he wasn’t involved in the final negotiations.
Now we’re finding out we may never know the truth after KCRA’s Ashley Zavala broke the news that negotiators on the bill signed non-disclosure agreements at the direction of the Service Employees International Union.
The only thing honest about this scandal is Gov. Newsom’s admission that this is “sausage making.” This is how things work in the Capitol. While your legislator’s name may be on the bill, they will somehow find a way to claim, in Nixonian terms, “plausible deniability.” But still, citizens should demand that their representatives at least know the facts of the bills they are carrying.
Unfortunately, political accountability is difficult to achieve when Democrats have a supermajority and few legislative districts are competitive. They answer only to themselves and special interests that could spend money against them in a primary. Placating those special-interest donors, not good governance, is their only real concern.
Meanwhile, Holden is carrying a new bill, Assembly Bill 610, that would exempt even more restaurants (in airports, hotels, event centers, theme parks, museums, and certain other locations) from the minimum wage law.
You may not be able to buy your way into Heaven anymore but, apparently, you can still buy your way out of bureaucratic hell in California.
Jon Coupal is president of the Howard Jarvis Taxpayers Association.
