Below is an excerpt of the full Commission report. You can read the full report here.

In June 2023, 66 members of California’s legislature asked the Little Hoover Commission to examine retail theft. The report responds to that request.

“For many Californians, the evidence of retail theft is plain to see. Videos on social media and in news reports show brazen thefts of property, sometimes by large or violent gangs. Retailers say that they rarely call law enforcement when theft occurs, and some law enforcement officials say there are few consequences even if citations are issued. Businesses are locking up more items on their shelves. Public officials have taken notice. Governor Gavin Newsom awarded $267 million in extra funding to local law enforcement to combat organized retail theft. The Legislature created a new committee to address the issue, and a variety of bills were introduced” and are now making their way through the legislature. And, major retail chains like Target and Walmart bank rolled enough signatures to get Prop 36 placed on the November ballot. Local leaders such as San Francisco Mayor London Breed announced crackdowns and her support for Prop 36.

As reported in the Sacramento Bee, “Proposition 36, criminal penalties: This measure would revise Prop. 47, a 2014 ballot initiative that downsized some lower-level crimes to misdemeanors and put in place a $950 threshold for shoplifting felonies. The ballot measure’s backers, which include San Francisco Mayor London Breed and the California District Attorneys Association, argue Prop. 47 has led to increased crime and retail theft. The proposed changes would raise penalties and sentences for some drug and theft offenses. For example, fentanyl would be added to the list of drugs that warrant a felony charge if the person also possesses a gun, increasing the punishment from up to one year in jail to up to four years in prison. Another major revision would hike up punishments for convicted shoplifters with two or more prior theft-related convictions. Gov. Newsom and other Democratic leaders in the legislature are opposed to Prop. 36. They have floated their own 14-bill package to reduce retail theft instead.”

“Reports of retail theft increased in 2022, but remain far below reported levels of the 1970s, 80s and 90s. Different regions of the state reflect different experiences of retail crime – some increasing, others decreasing. The rate of “shrink” – the term used by the retail industry to refer to theft and other inventory losses – shows a modest increase. Perhaps most important, the rate of under-reporting of theft to law enforcement, a crucial issue, is hotly debated. Retailers and some law enforcement officials suggest a substantial amount of under-reporting; scholars who study data about retail theft say it is difficult to assess the level of under-reporting with any degree of certainty. All of these factors have contributed to an increased degree of public fear and concern about theft, yet these issues also point to a need for more and better data.”

Underreporting is not helping the data either. “Not all retail theft is reported, but by its nature underreporting is extremely difficult to measure. Little data is available. A federal study of the reporting of household and personal property crimes shows a moderate downward trend in the rate of reporting since 2010.” And, when major retailers do make reports, they can be penalized for it as in the case of Target store in Sacramento recently. As Ishani Desai reports in the Sacramento Bee, “The Sacramento City Attorney’s Office warned a chain retail store that it could face a public nuisance charge due to a large number of phone calls placed to police when thieves repeatedly stole from its Land Park location. A person with knowledge of the warning, but not authorized to speak publicly due to the fear of retaliation, told The Sacramento Bee that city officials threatened the Target at 2505 Riverside Blvd. in the past year with an administrative fine. A Sacramento police spokesman confirmed the location — a site that prompted heavy ire from Land Park residents due to repeated crimes — when asked about the apparent warning.”

“Any increase in retail theft has real-world impacts on businesses, consumers and others, and it is important to understand the concrete effect of this form of crime. Retail theft’s most direct consequences are the losses experienced by businesses. Some businesses have cited theft as a reason for closing stores. Mom- and-pop businesses, often operating on razor-thin margins, have a smaller safety net than national retailers to recover from these losses. In addition to the immediate monetary losses, there are indirect costs associated with retail theft, such as enhanced security measures and an increase in insurance premiums. In extreme cases, these cumulative expenses can result in business closures, subsequently affecting local employment. The effects aren’t limited to businesses. Losses due to theft are often recuperated through higher prices. This can be particularly challenging for economically vulnerable populations. Furthermore, frequent incidents of theft can lead to an unpleasant shopping experience, characterized by a visible security presence, locking items away from customers, and other measures resulting in a perceived decline in customer service. This, in turn, can lead consumers to shop elsewhere, further harming the store’s bottom line.”

The Hoover Commission report makes recommendations. Below is Recommendation #2 which is fully supported by NBLC.

Recommendation 2: To better understand the complexities involved in the causes and effects of retail crime and to develop evidence-based solutions, the State of California should fund studies on the following topics. This research should be conducted by the University of California, the California State University, the California Community Colleges, independent universities, or other nonpartisan research institutions.

1. Retail theft preventative measures and effectiveness. This should include information on the types and effectiveness of retail theft prevention programs, policies, and technologies.
2. Underreporting of retail theft. By examining the frequency of underreporting and the degree to which underreporting changes over time, this study could resolve the most important gap in current data about retail theft.
3. Economic impact of retail theft. This should include direct and indirect costs to businesses, insurance companies and premium taxpayers, the community, and local and state government.
4. Causes of public perception of retail theft. In addition to understanding what the public’s perception of retail theft is, this study should investigate why the public believes what it does.
5. Fencing of stolen goods. This study should look at how and where stolen goods are disseminated to consumers and who is purchasing them.

Written in an article by Chandra Alexandre, CEO of Community Action Marin and Joanne Webster, president and CEO of the North Bay Leadership Council, “Access to housing is one of the greatest issues facing Marin County. It impacts employers and employees alike. We need more – not less – housing stock. A commitment to build affordable housing is both a demonstration of our shared values and an economic imperative critical to Marin’s future.

Between April 2023 and April 2024, Marin added 1,700 jobs to the local economy. But when it comes to new construction in the county, only 1,700 new units were built in the past decade. This reality has created a severe housing shortage that impacts us all and undermines our county’s long-term economic vitality.

The inability to house our workforce in Marin translates to a loss of talent and reduces productivity. It limits innovation and profit, as well as decreasing the quality of life across our communities.

In the realm of our local economy, we’re facing a predictable talent shortage that is being driven by the housing crisis. Employers across sectors that include health care, education, essential services and more report significant barriers to recruitment and retention. Many employers have had to offer increasingly higher wages and other perks to attract and retain talent which cuts into their bottom line.

These costs are passed on to consumers, showing up in increased wait times and limited access as well as driving up what we pay for goods and services. An estimated 45,000 people in the Marin workforce commute to work – and this number is growing. In the past 10 years, commuters coming into Marin from other counties increased by nearly 8,000 people.

Meanwhile, the number of workers who both live and were employed in Marin dropped by about 10,000 people. Long commutes and housing instability lead to increased stress, poorer health outcomes and reduced opportunities for social mobility. This doesn’t include the impact that super commuting has on traffic congestion and the environment, both key issues of concern to many in Marin.

A 2023 needs-assessment report conducted by Community Action Marin shows the affordable housing crisis is disproportionately impacting people of color, with 58% of Latino and 56% of Black renters spending more than 30% of their income on housing. The racial inequity in Marin is embarrassingly visible, with affordable housing concentrated in certain crowded and segregated neighborhoods in Novato, Marin City and San Rafael.

Many families in these neighborhoods are doubling and tripling up in housing units just to be able to afford rent. Recent census data shows that the incidence of overcrowding in rental units is a shocking 7% in Marin. And that’s just what’s officially reported. It’s likely much higher.

Marin County Superintendent of Schools John A. Carroll sees firsthand that children in overcrowded housing situations are more likely to struggle academically and face health, emotional, and behavioral challenges. He has addressed the fallout that is hurting our community and our children.

“Affordable housing is not just a cornerstone of our community’s well-being; it’s essential for attracting and retaining the talented educators who shape our children’s futures,” Carroll said. “Without stable, affordable homes, we cannot expect to maintain the high standards of education our students deserve. Investing in affordable housing is investing in the strength and sustainability of our schools.”

The cost of inaction is clear: We are failing our children, our neighbors, our workers and our employers. We’re creating insurmountable barriers that will further hamper the future strength of our county and well-being of future generations.

Ensuring everyone has access to safe, affordable housing reflects our values and it makes good business sense. Marin County has long been a place of opportunity and innovation.

We can continue to lead by addressing our affordable housing crisis. Our actions today can pave the way for a strong and bright future for Marin and demonstrate that economic prosperity and social justice go hand in hand.”

May has been declared Affordable Housing Month. There is even a website affordablehousingmonth.org. where it is stated that this month is, “our time to imagine the Bay Area we know is possible when we invest in affordable housing solutions and everyone has a safe place to call home. Where children can stay in the communities in which they were raised, and workers can afford to live in the city where they work.” State legislators got the memo too, because there are over 50 pro-housing bills in front of the legislature this year. CA YIMBY tracks and analyses them here.

At NBLC we have identified creating more workforce housing and affordable housing in the North Bay as a top priority. A new report released May 8^th by Enterprise Community Partners and Bay Area Housing Finance Authority (BAHFA) analyzes affordable housing projects in various stages of predevelopment and identifies solutions for moving them toward completion.

From a Bay Link Blog we discover that “ the updated research reveals there are now 433 projects in various stages of predevelopment that would create more than 40,896 affordable homes across the nine-county Bay Area. These would account for nearly a quarter of the 180,000 affordable homes the state’s Regional Housing Needs Allocation (RHNA) Plan determined are needed in the Bay Area by 2031.”

“Affordable housing developments typically are supported by a capital “stack” investment that includes a commercial mortgage; Low-Income Housing Tax Credits; tax-exempt bonds; and additional local, regional and state dollars that fill the gap between the cost of the development and the financing secured through debt and equity. The new report calculates that the hundreds of Bay Area projects now in the predevelopment pipeline need $9.7 billion in public funds to move forward, and that a $20 billion regional bond measure proposed for the ballot in Bay Area counties this fall would help close this gap.”

“The predevelopment pipeline includes projects in all nine Bay Area counties. These include more than 10,000 units in both Alameda and Santa Clara counties, with another 8,400 affordable homes pending development in San Francisco and more than 3,000 units in both San Mateo and Sonoma counties. “

“Project pipelines in other Bay Area counties range from over 300 affordable homes in Solano County to 1,173 units in Marin County; nearly 1,500 homes in Napa County; and over 2,500 units in Contra Costa County. Each Bay Area city, town or county currently is working on its own to meet the challenges of housing affordability and homelessness.”

According to a recent article in the SF Chronicle, “The bond would be funded by property taxes, with an estimated tax of $19 per $100,000 of assessed value —about $190 per year for a home assessed at $1 million. The amount of money each city receives from the bond would be based on how much that jurisdiction pays in taxes: For example, San Francisco would get about $2.4  billion to invest, while Sonoma County would receive about $806 million and San Mateo County would get $1.05 billion.”

Final ballot language and the final cost of the bond will be published in late June. With the slim passage of Prop 1, skeptical voters will need to be convinced that another tax is going to actually build units.

North Bay Leadership Council actively supports quality early child education and care programs as part of its work plan for 2024.  Our member employers are reporting that they and their employees are finding it more and more difficult to find quality, affordable child care in the North Bay, especially infant care. A Care.com survey of child care costs released in early 2024 found that on average, families were spending about 24% of their household income on child care, with 60% spending 20% or more. The U.S. Health and Human Services Department defines affordable child care as no more than 7% of household income.

Lack of child care can hinder a business’s ability to grow. This is especially true for small businesses as reported by Andy Medici, San Francisco Business Times, BizWomen.

Medici notes a new “survey of small-business owners who are parents or have employees who are parents by the Small Business Majority found 59% said lack of access to affordable child care is hindering their business growth. About 59% said their child care issues forced them to take substantial time away from their business, while 58% agreed that lack of affordable child care made it harder to start their business in the first place. While child care access is outside of the direct control of most small businesses, the survey made it clear it’s weighing on their fortunes and their workers”.

He shares with us that “John Arensmeyer, founder and CEO of Small Business Majority, said 4 out of 10 small-business owners say they have lost out on business opportunities because of challenges with child care. “Our research shows that child care is essential to the small business ecosystem and is a key factor in entrepreneurial growth,” Arensmeyer said.

The survey also found:

• Small-business owners saw their businesses suffer because of a lack of child care, with 56% saying a lack of child care forced them to take substantial time away from their business, and 39% said it caused them to lose out on business opportunities. About 26% said it forced them to shut down their business and rejoin the workforce.
• About 51% of small businesses said they’ve experienced lower productivity and 44% said they have been unable to operate longer hours when their employees face child care issues. About 31% reported lost earnings and 28% said they had to hire temporary workers to fill in child care gaps.
• Nearly three-quarters of entrepreneurs say that their employees adjust their work schedules due to child care issues at least a few times a month.
• About 62% of small-business owners experienced unplanned employee work absences and 30% said they had an employee quit — or have 27% turn down a promotion — due to child care issues. About 30% said they had a job candidate turn down an offer due to child care issues.

“As we’ve noted, child care businesses themselves are struggling due to the end of support from Covid-19 relief programs, demographic shifts and child care challenges for their own employees.

Janna Rodriguez, owner and founder of The Innovative Daycare Corp in Freeport, N.Y., said investments in child care are critical to removing barriers for economic growth.”

“Small child care businesses like mine rely on a small workforce to thrive,” she said. “But that workforce also desperately needs reliable, affordable child care themselves, and they may seek other employment or leave the workforce entirely if they can’t access affordable care.”

Medici continues, “the survey comes as the Small Business Majority and other advocacy groups push congress to pass the Child Care Stabilization Program, which would provide funds for child care centers and enact other measures to keep daycares from closing and encourage the opening of others. The previous $24 billion Child Care Stabilization Program passed during the pandemic provided funds to keep child care options open — but that expired at the end of September 2023, creating what experts had warned was a child-care cliff. “

“A separate survey by Motherly found that about 18% of mothers changed jobs or left the workforce in the last year — with 52% of Gen Z and Millennial mothers say the reason why was lack of affordable child care. But it’s not just risk of closures that is plaguing the child care industry, it’s that rising costs would require remaining providers to raise rates to levels even less affordable for families.”

“Recent data from Bank of America shows that’s the case so far. Households with child care payments saw that those payments were 32% higher in January 2024 than the 2019 average. Even as big increases in the Consumer Price Index and overall inflation have dropped from their 2022 peaks, day care and preschool costs are now outpacing inflation as a whole, Bank of America said.”

“Meanwhile, as higher-income households are making these bigger payments, Bank of America data shows low-income household child care payments are disappearing altogether, signs that they are no longer able to afford professional options.”

“About 79% of parents expect to be impacted in 2024 by the end of the stabilization funding for child care centers, and 54% are preparing to spend $600 per month or more on child care — with 40% saying they are already spending more.”

Written in an article by Gene Marks, “If you own a business, get ready. There’s a new federal reporting requirement for business owners, and you don’t want to ignore it. If you do, the penalties are high.

Here are seven key things to know.

What is the new requirement?

Effective Jan. 1, more than 32 million business owners need to complete a special form called the Beneficial Ownership Information Report. You’ll need to file it with the Financial Crimes Enforcement Network (FinCEN), an arm of the U.S. Department of the Treasury.

The form is required as part of the 2021 Corporate Transparency Act. This act aims to reduce money laundering and the concealment of illicit funds by targeting shell companies and many other entities.

Who needs to file the Beneficial Ownership Information Report?

Entities including corporations, pass-throughs, partnerships, estate and benefit plans, and foreign companies registered to do business in any U.S. state or Indian tribe will have to share information about their beneficial owners. Sole proprietorships are not included.

Beneficial owners are generally shareholders who own at least 25% of an entity, which may include:

• Profit interests
• Options
• Warrants
• Other instruments like convertible notes

Besides shareholders, beneficial owners also include people that exercise substantial control over an entity. This means senior officers, including:

• President
• Chief financial officer
• General counsel
• Chief executive officer
• Chief operating officer

Any other officer who performs a similar function to those listed above may be required to file a report. This includes anyone with the authority to appoint or remove officers or a majority of directors of the reporting company. It could also include an important decision-maker for the reporting company, or any other individual with substantial control.

It’s important to note that there may be more than one beneficial owner of a company. Filings also need to be updated when a beneficial owner has a change of address or marital status or obtains a new driver’s license. There’s no fee to file this report.

There are 23 types of businesses that are exempted from this rule. They include:

• Banks
• Credit unions
• Tax exempt entities
• Large operating companies (generally companies with more than 20 U.S.-based employees and revenues over $5 million)

Many of these entities are exempt because they’re providing similar information via other means. Review the full list in the FinCEN’s Small Entity Compliance Guide.

What information is required?

The information you need should be easy to obtain. It includes your company’s legal and trade names, or your “doing business as” name, and street address (post office boxes are not allowed). You’ll also need to include the state where your company was formed along with relevant tax and employer identification numbers.

In addition, you’ll need to provide an image of your articles of incorporation. If you can’t find this, you can likely obtain it from your state.

Each beneficial owner will need to provide their full legal name, birthdate, and home address (again, post office boxes are not allowed). They’ll also need to provide an image of either an unexpired passport, driver’s license, or document issued by a state, local government, or Indian tribe.

What’s the due date and where do I report?

Filings for existing companies must be completed by Jan. 1, 2025. For new entities created after Jan. 1, 2024, reports are required within 90 days. You can file your reports electronically on FinCEN’s website, where you will get an electronic receipt.

How secure is my information?

Under the Corporate Transparency Act, FinCEN is allowed to permit federal, state, local, and tribal officials, as well as certain foreign officials who submit a request through a U.S. federal government agency, to obtain beneficial ownership information for authorized activities related to national security, intelligence, and law enforcement.

Financial institutions will also have access to beneficial ownership information in certain circumstances, with the consent of the reporting company.

Otherwise, FinCEN will store information in a secure, non-public database. FinCEN uses the same information security methods and controls that are typically used in the Federal government to protect non-classified but sensitive information systems.

What happens if I don’t comply?

The penalties are steep. You could incur fees up to $500 a day, up to $10,000, and up to two years in jail (per occurrence) if you intentionally provide incorrect information.

Where can I find more information?

I strongly recommend working with an experienced certified public accountant, attorney or business advisor to complete this report. It’s also important to ignore the inevitable solicitations you’ll receive from firms that claim to be experts in this area. Seek out a professional you know, or ask for a referral.”

https://sba.thehartford.com/business-management/new-federal-reporting-requirement/?cmp=EMC-SC-SBA_240326-21840969&eml=1