Small businesses speak out
Over-regulation and large tax burdens key concerns
With the biggest “small business” legislative days of the 2013 session just past, owners and employees weighed in on their top points of contention for the present biennium.
Heading the list is the fact that, according to a recent State Auditor’s office report, small businesses are required to jump through nearly 1,400 licensing and inspection hoops within 26 different government agencies before they can even get up and running, or make any improvements.
“Small businesses’ biggest concerns are that they’re being over-regulated, and the tax burden on them,” said Rep. Gary Alexander, R-Olympia, who is also the auditor for Thurston County. “As a whole, they feel hard-pressed to comply with all of these regulations.”
At the Small Business Administration’s district office in Seattle, director Nancy Porzio agrees.
“The burdens brought on by regulations are cumbersome to small businesses,” she said. “What we’re hoping for this session is for the Legislature to reduce some of those regulatory pitfalls, so that our small businesses have more chance to thrive.”
However, regulatory cutbacks are just one main issue of contention in the works this session for local companies, says the Washington state branch of the National Federation of Independent Business.
According to the NFIB, which held its lobbying day in Olympia on January 30, a recent member survey illuminated five major areas of state business concern, including the new health care mandate and workers comp, both of which stand to raise small business costs at every level.
Initially, though, owners are indeed talking regulations and taxes. For the latter, specifically, worries abound that the $800 million “temporary” tax increase adopted in 2010 — including the 20 percent increase in business and occupations tax on service-oriented companies — won’t expire this July as planned.
“Obviously, budget and tax issues continue to be our first and foremost concern in our members’ needs,” said Patrick Connor, Washington state NFIB spokesman. “What we would like is for the Legislature to balance the budget without increasing taxes, and for the 2010 tax package to expire, as Gov. Inslee promised.”
The solution to many budget and tax issues comprises another hot-listed item on the state’s small business agenda: passing the proposal for a 2/3 vote to raise taxes. The initiative, which has been on the table in five previous sessions, has been voted down every time by legislators.
“It’s high time to give the voters, particularly those concerned with business in our state, a chance to say yes or no to what happens in the tax realm,” said Connor. “Hopefully, the sixth time’s the charm.”
Regarding regulations, the NFIB found that small businesses are also concerned that they’ll be facing additional workplace mandates the state Legislature has been considering in recent years, such as another hike in the minimum wage.
“As the minimum wage continues to escalate, it’s tough for businesses to take care of their other employee obligations,” Alexander said.
At the Association of Washington Business’ legislative day on Feb. 7, though, gubernatorial chief of staff Mary Alice Heuschel said that Gov. Inslee’s main goal for the next four years is job creation, rather than deregulation.
However, adding to this, gubernatorial policy director Ted Sturdevant said that Inslee is indeed looking to work with business leaders to fix existing regulatory sticking points, and that he is aiming to positively impact the economy through workforce education and regulatory reworking.
A major part of that reworking will be for the state’s new health care exchange, which the NFIB says “threatens to undermine the private health insurance market, limit choice and variety of coverage available to small businesses and their employees, and increase the cost of coverage.”
That’s a true concern being expressed by small businesses, Connor said, since the development of the health care exchange will take its $50 million commitment just to get it started and the stores open — without including doctor’s visits, prescriptions, and other expenses.
“Those costs will all be passed onto the businesses, through different types of fees and higher taxes,” he said. “All of which we will oppose.”
Ultimately, Porzio said that small businesses are hoping that the Legislature will encourage banks to continue making loans for small business growth and expansion. Encouragement in that arena has already come through several FDA new loan programs that support local community banks in providing funding to local companies.
“We’re seeing a little bit of a positive turnaround there, and we’d like that to continue,” she said. “Any efforts the Legislature can do to support that will be helpful to our business communitites.”
Reach writer Holly Smith Peterson at hpeterson@BusinessExaminer.com