Author: John Kabateck

Earlier this month, the Senate Appropriations Committee defeated Assembly Bill 2716, deciding against imposing yet another costly, unnecessary mandate on California small businesses – for now. AB 2716 would have mandated that employers provide workers with one hour of paid sick leave for every 30 hours of paid work. In smaller businesses, employees would have been allowed to take up to 40 hours or five days of leave in each calendar year, and all other workers would have been able to take up to 72 hours or nine days of leave per year.

A study released in June by the National Federation of Independent Business Research Foundation showed the loss of approximately 370,000 jobs within five years in California had AB 2716 become law. In addition to significant job losses, the bill imposed a direct cost, just like a tax, of $4.6 billion on California employers that would have disproportionately affected small businesses.

When Senator John McCain delivered the keynote address at the National Federation of Independent Business 2008 National Small Business Summit last month, he did much more than speak to several hundred interested small business owners. He pushed the concerns of a significant voting bloc to the forefront of the presidential campaigns. In fact, both Senators McCain and Barack Obama have spent much time specifically addressing the number one issue among small businesses—healthcare. And it’s about time.

Recognizing that healthcare costs have become unmanageable for many entrepreneurs, Senator McCain said, if elected, his administration would introduce healthcare reform that would provide hardworking Americans more options and expand portability of coverage.

Senator Obama, who was invited to speak at the summit but did not attend, responded to Senator McCain’s remarks by reiterating that small businesses need more options to access quality, affordable healthcare coverage. We also know both candidates recognize that implementing health information technology and addressing an inequitable tax structure should play a part in any comprehensive reform package.

Soaring fuel and energy costs rank second only to the cost of healthcare among the problems facing small business owners, according to one of several surveys by the National Federation of Independent Business, California’s leading small business association. According to NFIB’s recently-released Small Business Problems and Priorities survey, 42.3 percent of the small business owners nationwide rank the cost of natural gas, propane, gasoline, diesel and fuel oil as a “critical” concern. That’s up from 26.1 percent on the previous survey, conducted in 2004. Both surveys rank the cost of health insurance as the number one issue facing small business owners.

Details of the most recent Small Business Problems and Priorities survey, sponsored by Wells Fargo, are available here. For information on the 2004 survey, click here.

The National Federation of Independent Business represents small businesses in a wide range of industries that are being hurt by higher fuel prices. In addition to the Problems and Priorities survey, the NFIB Research Foundation has published two other national polls – Energy Consumption and Adjusting to Cost Increases — which are available on NFIB’s small business information Web site, www.411sbfacts.com.

Today, NFIB Research Foundation released a study that shows the paid sick leave mandate proposed in AB 2716 by Assembly Member Fiona Ma would result in the loss of 370,000 California jobs over the next five years. AB 2716 will force all employers to provide paid sick leave for all employees regardless of whether or not employers can afford to pay for it.

How much will paid sick leave cost California businesses? According to the Research Foundation study, $4.6 billion and will disproportionately affect small businesses in California. What is worse is that these businesses will have less money to pay for the mandated benefit as the new law would cost California firms an estimated $59.3 billion in sales over the first five years of enactment, and more than half of that will be losses to small businesses.

One question comes to mind: Is this really the time to pile additional mandates on the job creators of California? The Legislature is currently trying to find a solution to California’s massive deficit – at last count, it was somewhere in the neighborhood of $16 or $17 billion. Now is the time our leaders should be looking at ways to stimulate the growth of small businesses in California by allowing them to do what they do best – create jobs and employ people in the communities where they live.

This past week, the national spotlight was on the impact small businesses have on America. Small business entrepreneurs are the backbone of the American economy and create tens of thousands of jobs every year in America.

I had the opportunity to attend the 2008 National Small Business Summit in Washington D.C. this week and saw, first–hand, the dedication and commitment of small business owners to having their voice heard by policymakers. The organizers brought together a wide range of speakers to give our members an opportunity to hear about economics, politics and other issues that small business owners care about.

Throughout the history of American politics, small business owners, which many of our Founding Fathers were, have played a pivotal role in the nation’s public life.

Entrepreneurs still deeply care about their government and its activities. A National Federation of Independent Business Research Foundation Poll about political participation found that a disproportionately large percentage of small business owners-95 percent-are registered to vote and an almost equally large share-84 percent-usually do so.

It’s a sad state of affairs when millions of taxpayer dollars can be spent on a political campaign to fool voters into supporting faux property rights protections.

But that’s precisely what happened last night with the passage of Proposition 99 – which will do nothing to protect property owners from eminent domain abuse. Proponents of this measure, namely wealthy developers and government fat cats, have succeeded, for the moment, in protecting the status quo and their bottom line.

Last week, the California State Assembly passed yet another mandate bill that is bad news for small businesses around the state.  AB 2716 by Assembly Member Ma passed with a 45-33 vote and will force all employers to provide paid sick leave regardless of their ability to pay and would expose small businesses to yet another round of lawsuits.

And to add insult to injury, when did this vote take place?  On the very day that California has set aside to honor the best and brightest small businesses around the state – California Small Business Day.  Dozens of legislators voted against the interests of California’s economic powerhouse – small business – by supporting a multi-billion dollar job-killing mandate, then walked across the street to proclaim their undying support for the very businesses they had just crushed.  To say the least one must question their motives for attending the event.

As our leaders look to revive the flat-lined 2007 "Year of Healthcare", it is important to remember that small business owners, employees, and family members make up 60 percent of the uninsured, so until healthcare is fixed for small business it is not "fixed".  But what does truly "fixed" health care look like for California’s job creators?

NFIB has put forth ten principles for small business healthcare reform which include:

• Universal: All Americans should have access to quality care and protection against catastrophic costs.  A government safety net should enable the neediest to obtain coverage.
• Private: To the greatest extent possible, Americans should receive their health insurance and healthcare through the private sector.  Care must be taken to minimize the extent to which government safety nets crowd out private insurance and care.
• Affordable: Healthcare costs to individuals, providers, governments, and businesses must be reasonable, predictable and controllable.