The Los Angeles County Business Federation’s (BizFed) tenth consecutive yearly poll of its members shows that business concerns and priorities can change over a decade. Ten years ago, in the heart of the Great Recession, access to capital, state and local budget concerns and workers compensation were listed as the top three business fears. Today, state and local budgets don’t break into the top ten of business worries, while access to capital and workers compensation came in 20th and 21st in a list of critical issues facing business.
While the issues of taxes and regulations did not have a prominent place for BizFed members a decade ago, they have pretty much dominated the top spots in the poll since then. For the eighth consecutive year concerns over taxes took the top spot. Problems with government regulations finished second for the fifth time over those eight years.
The tax issue is a tricky one for the business organization. While members continually list taxes as a top concern, BizFed has been all aboard in support of local taxes the last few years. The group supported the sales tax increase for transportation, Measure M, along with the extension of another transportation sales tax, Measure R, in 2016. The next year on the county ballot, BizFed endorsed Measure H, a sales tax to help the homeless and also backed Measure HHH, a bond to confront homelessness.
BizFed argues it backs taxes and fees that directly support infrastructure and other needed investments but opposes other taxes and fees, including the City of Los Angeles’ gross receipt tax.
The poll indicates that the taxes BizFed members rail against most have nothing to do with local governments but are levied by the state: income taxes, corporate taxes and payroll taxes.
A BizFed release noted that the income tax hurt small and mid sized business in which owners generally pay personal income tax on their business earnings. This argument was raised against Proposition 30 in 2012 when the income tax was dramatically increased but to no avail.
Those state taxes have an impact on businesses remaining in LA County and in California. When asked for reasons businesses and jobs are leaving the county and the state, poll respondents cited high taxes and fees and regulations above both traffic congestion and housing.
Yet, housing was notable in the BizFed poll. The issue of housing was named third on the list of critical issues, jumping way up from tenth the previous year after not even being considered in prior years. Homelessness also leaped up in the list of concerns from 17th last year to 9th this year.
Given the negative feelings about the state taxes and citing taxes as the top reason business and jobs leave LA and the state, it is not surprising that only 14% of the respondents found the state to be business friendly, a figure that has held steady for three years in a row. The BizFed members were a bit more accepting of county government as business friendly with 24% approving of the county’s attitude toward business. Local government fared best with 46% declaring cities business friendly.
Poll respondents were 710 members of the BizFed groups representing business owners, CEOs, closed corporations, individual proprietorships and non-profits covering small organizations with a few employees to businesses with over 500 employees.