While the legislature is in session, the National Federation of Independent Business/California will be profiling anti-small business bills and the adverse effect they would have on California’s job creators. This is the fifth column of the 2011 series.

Even though the Legislature is technically on summer recess, bad bills still linger in the Capitol halls. Senate Bill 568 is one of those bills and would prohibit food vendors from using polystyrene foam food service containers (known by the brand name Styrofoam) in their establishments, increasing their costs and lowering the quality of their food products. Is now really the time to add additional mandates to the job creators in our state?

Polystyrene products are cheaper to manufacture, using much less energy in the process, and are several times less expensive than comparable coated paper products. These added costs will only make it more difficult for small business owners to run a profitable business and hire more employees. A similar ban was enacted in San Francisco with the result that the litter of polystyrene foam products was simply replaced with a litter of paper products.

This bill is a "de-facto" ban on polystyrene containers, allowing their use only if a local jurisdiction has a program that recycles 60% of used products. This is unrealistic and does not apply equally to other products (like paper) – there are no recycling programs that meet this goal. As a result, hundreds of good paying manufacturing jobs at California-based companies that make polystyrene containers will be in jeopardy if this bill is passed. Payroll and property taxes will diminish and goods and services provided by suppliers, vendors, and others will decline as well. Can California afford a decline in state tax revenue and in today’s economy where would these laid off employees find equivalent paying work?

A study by Keybridge Research on the economic impact of a ban on polystyrene containers in California found that:

• Reduced demand for polystyrene foam products would result in plant closures with a loss of $1 billion in output, $222 million in earnings, and 4,800 jobs.

• The operations of the six polystyrene manufacturing facilities in California paid at least $6 million last year to the state in desperately needed tax revenues.

Now is not the time for government to heap on additional bans and burdens on struggling small businesses in California. Instead, the elected representatives in the Capitol need to focus on helping small businesses create jobs and support their communities…it is the only sensible thing to do.


NFIB is the nation’s leading small business association, representing members in Washington, D.C. and all 50 state capitals. Founded in 1943 as a nonprofit, nonpartisan organization, NFIB gives small and independent business owners a voice in shaping the public policy issues that affect their business. NFIB’s powerful network of grassroots activists sends their views directly to state and federal lawmakers through our unique member-only ballot, thus playing a critical role in supporting America’s free enterprise system. NFIB’s mission is to promote and protect the right of our members to own, operate and grow their businesses. More information about NFIB is available online at www.NFIB.com/newsroom.