As the newest crop of legislators arrives at the Capitol today to officially assume their oath of office, one must ask: “Will this class of Senate and Assembly inhabitants have a greater appreciation and understanding of small business than history has shown?”
If more of our state leaders had hands-on experience signing the FRONT side of a check, they’d appreciate exactly what small business owners are going through in this economic downturn and how their decisions impact the jobs and lives of working Californians. Sadly, the majority of our Capitol leaders have no idea what kind of fatal blow new and unexpected costs – be they taxes, levies, assessments, fees – will do to small business owners and the people they employ.
Most small businesses have limited incomes and razor-thin profit margins, which basically means that every month, every pay period, once they have paid what is due for administrative, payroll, overhead, property, utilities, permits, inventory, and, yes, taxes, they are left with little, if anything, for their own livelihood or other unanticipated future needs. In fact, many small employers at this point in history are faced with the sad reality that they are steeped in red ink and are scrambling to find immediate sources of credit or some form of capital to survive.
Keep in mind that small businesses are the single largest contributor to jobs and the economy, not only in California, but throughout the nation. There are more than 3.5 million small businesses that employ approximately 7 million people in California. Small businesses contribute approximately $760 billion to our economy. Ironically, while small businesses are truly the engine that has been keeping our communities, state and nation running for generations, small businesses usually get the short shrift.
It’s also important to remember that small businesses are not like larger businesses. Aside from having significantly smaller budgets, small businesses aren’t afforded the luxuries of resources and services that larger businesses are fortunate to have – no administrative or payroll departments, no human resource divisions, no legal units to represent them when they are preyed upon by self-serving trial lawyers. Small business owners are usually easy targets and aren’t able to absorb new, unanticipated costs that our state leaders heap upon them.
Time and again, it has been proven that new costs will first and foremost cost California jobs. Last year, a study by the NFIB Research Foundation found that the 7.5 percent mandated healthcare payroll tax proposal would have cost more than 111,000 jobs over the first five years. A Research Foundation study of AB 2716, the mandated paid sick leave bill, would have resulted in the loss of nearly 400,000 jobs over that same five-year period.
NFIB and small business owners realize that the prognosis for our multi-billion dollar budget deficit is not pretty. Difficult decisions will have to be made, no doubt. But we elected our state leaders with the hope and expectation that they would do what is fiscally and ethically right, and treat government like a business. We have held out hope, time and again, that they would make reasonable decisions that spend “stakeholder” (yes, taxpayer) money honestly and appropriately, plan wisely for the future, and make difficult but important decisions during difficult times to ensure survival – in short, behave and manage the State like a business, not a bureaucracy. Sadly, our leaders have chosen to take the easy way out: calling upon small businesses and taxpayers to pay for their haphazard behavior. Some bailout, indeed!
Our elected leaders need to act now to stop the budget bleeding – and this begins by stopping their negligence, infighting and knee-jerk proposals such as new costs that will drive more consumers away, send more small business owners packing, and put even more Californians out of work.
The people we have sent to Sacramento, both in past years and on November 4th, have a responsibility to do the right thing by trimming more government waste, providing greater incentives that encourage businesses and employees to stay in California, and help direct people to the services and resources that will help lead them back to the road of financial security. We hope – and pray – that history does not repeat itself and that this newest bunch of “public servants” will truly demonstrate that they mean business – small business.