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Take that, California lumbermen!

BY HBSDEALER Staff

HCN has nothing but happy memories of California.

It was here in 2007, under a sunny San Diego sky, that we recognized Augie Venezia and Fairfax Lumber as the 2007 Independent Pro Dealer of the Year.

We have followed Venezia’s subsequent career with keen interest, and have applauded his handling of regulatory storm clouds. This last one is a whopper.

Venezia is currently president of the board of the West Coast Lumber & Building Material Association (WCLBMA). Last month, he and colleagues were at a California Board of Equalization (BOE) hearing, representing the interests of lumberyards as the state bumbles through its implementation of a “lumber products assessment” — an additional 1% fee on retail sales of lumber.

A little background.

Well after midnight on the last day of the California legislature’s final session of 2012, and under the cloak of “emergency legislation,” the assessment was voted into law. And to pour salt in the wound: The law was made effective for the first day of 2013.

“There were no hearings, no opportunities for input, and the bill passed at 2:45 a.m., as the final action of the legislature,” wrote WCLBMA executive director Ken Dunham in an editorial for the California Taxpayers Association. “The bill has been described as one of the worst examples of legislative abuse in years.”

Now, how is the state going to collect? That’s been a bone of contention ever since. The state’s plan was to throw a little money at the lumber retailers so they can implement the necessary point-of-sale adjustments.

“Some of our lumber association members literally had to dump their old computer systems and invest in all new software and hardware to implement the tax,” Venezia told HCN.

What would be a fair compensation to dealers? Dunham did the math and suggested $5,500 per location.

The Board of Equalization had a different idea of an appropriate reimbursement: $735. A laughable amount, but considerably more than a previous BOE staff suggestion of $250.

Fast forward to the September hearing of the BOE, attended by Venezia and crew.

The legislators and their staffs seem to have no idea what they’ve gotten into. They’re not sure how many retailers in California sell products that should be taxed under the rule.

The meeting opened at 10 a.m., and the lumber tax agenda item concluded at 7:15 p.m., with the less-than-satisfying result of tabling the matter for a future hearing.

For fighting the good fight, for their patience and for the defense of small business, California dealers are to be commended.

“One fear out of all this is that the state could use the same ‘emergency legislation’ method to add on more fees/taxes to a wide range of products and services,” said Venezia. “Today it’s lumber. Tomorrow it could be Italian sausages.

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What to tell workers during open enrollment for 2014

BY HBSDEALER Staff

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Workers will be confronting a changed benefit landscape in 2014. For one thing, all Americans will be required to have health care coverage or face a penalty. By Oct. 1, 2013, employees should have received a required notice about their options under federal- or state-run health care exchanges (marketplaces), notices that many will find more confusing than enlightening. Employers also may be making changes to rules that determine which employees are eligible for health coverage, perhaps excluding part-time workers who previously received coverage. But the recent Supreme Court decision that resulted in federal recognition of same-sex marriages may mean more spouses and dependents are eligible for benefits.

“Employees typically spend very little time choosing their health benefits each year,” Craig Rosenberg, leader of consultancy Aon Hewitt’s health and welfare benefits administration practice, said in a news release. “This year that can be a risky, and potentially costly, strategy. In some cases, not making an active decision during enrollment means employees could get defaulted into a health care plan that doesn’t meet their needs.”

To ensure workers make the best benefits choices for themselves and their families, organizations should send or post the following tips during enrollment season, Rosenberg suggests.

Participate in the enrollment process.  Make sure you understand what’s changing, when you need to make your choices and what your employer is requiring of you. Use the information and tools provided to get educated about your options and to make your decisions.

Review coverage that your employer offers before making a decision about purchasing health insurance through a state marketplace. You will hear a lot about these new marketplaces, including the availability of federal subsidies based on your income. In most cases, if your employer offers coverage that meets certain minimum coverage and cost levels, you will not be eligible for a subsidy in the marketplace. Make sure you take the time to understand the health plans your employer offers before declining coverage to purchase insurance through the marketplace. It is important to note that most employers subsidize coverage they offer and allow you to pay for it on a pretax basis, which saves you money by lowering your taxable income. Coverage purchased through the marketplace, however, is not pretax. You can visit healthcare.gov to learn more about the marketplaces.

Reassess your and your dependents’ health care needs. Reserve time before open enrollment begins to take a fresh look at your health care needs for the year ahead and how you and your family have used health care in the past year. Consider how much you’ve spent out of pocket (e.g., deductibles, co-pays and co-insurance), the number of doctor visits you typically make and the cost of regular prescription drugs. Online tools can help you calculate your past expenses and estimate your future health care needs.

If you are enrolled in a health care flexible spending account (FSA), evaluate whether your contribution is right based on your actual and expected expenses. Remember: You must use any money in an FSA within the current year (sometimes with an extra grace period through mid-February) or you’ll lose it.

Evaluate whether a CDHP is right for you. Consumer-directed health plans (CDHPs) often have lower premiums but higher deductibles, coupled with employer-funded health reimbursement arrangements (HRAs) or health savings accounts (HSAs) that can be used to pay for eligible out-of-pocket costs. You can save money with an HSA by contributing dollars on a pretax basis — up to $3,300 in 2014 or $6,550 if you have family coverage, with no use-it-or-lose-it rule.

When evaluating CDHPs, you should figure out how much you are likely to spend out of pocket before you meet your deductible. Also factor in how much your employer will put into your HRA or whether your company will make contributions to your HSA. If you plan to enroll in a CDHP with an HSA, make sure you understand that any additional FSA would be limited to dental and vision care coverage.

Take advantage of wellness program opportunities. Most employers offer wellness-promoting tools and programs, such as health-risk questionnaires and biometric screenings (e.g., blood pressure and cholesterol testing). And you may even receive a financial incentive from your employer for participating in these programs. By learning more about your health risks, you can take action earlier.

Understand supplemental benefits and their costs. As you assess your health plan options for 2014, look holistically at your health and financial well being, including health care, life and disability insurance, and retirement planning. Many employers include voluntary supplemental coverage, such as income-replacement insurance or extra critical-illness coverage, as part of their annual enrollment process. Be sure to carefully review the available options and their costs, and then determine if certain voluntary coverage meets your needs.

Stephen Miller, CEBS, is an online editor/manager for SHRM.

Have HR-related questions and concerns? Get access to essential forms, policies and guides, plus a live call center, at ToolkitHR.com, powered by HCN and the Society for Human Resource Management (SHRM).

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China casts shadow of uncertainty

BY HBSDEALER Staff

“What’s going on with China?” is a typical question among North American lumber buyers as they try to calculate the next move in their markets, especially in spruce-fir-pine. Wholesalers ask the question because, unlike those times when their customers are obviously looking to replenish stocks, there is no “feel” for when Asian customers will enter the market to purchase additional volumes. It just happens. Subsequently, lumber availability can dry up in a matter of minutes, and prices can leap when they appear most vulnerable.

“It is the biggest unknown in the marketplace,” remarked an SPF trader, regarding China. That “unknown” could play a much different role in markets if western mills, and in particular those in British Columbia, did not sell significant volumes to China on a program basis. Those steady flows of program lumber limit the potential for large, open market buys, thus reducing the likelihood of market volatility. So, while it might be easier for wholesalers to keep tabs on a marketplace in which all lumber exports to China flowed consistently, it would also likely eliminate some of the market volatility that is so vital to their profit margins.

Recently, North American SPF buyers stayed out of the market in significant numbers. Many wondered what the next market move might be. The price of western SPF 2×4 #2&Btr has now risen or held for 16 consecutive weeks, yet is still $50 below its 2013 high. It is also October, and the potential for snow is increasing, yet secondaries have reported steady takeaways from their yards as of late. And then there is China. When considering that part of the equation, and whether that country will again leave a bigger footprint in the market in the coming weeks, it is important to remember that China typically imports some of its greatest volumes from North America in the last quarter.

This article was provided by Crow’s Market and Price Service/RISI. For a free trial of this service, visit RISI.com/crowsfree.

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