Author: John Kabateck

Yesterday, the National Federation of Independent Business/California, the state’s leading small business association, formally joined in legal efforts to prevent legislators from circumventing the state Constitution by cleverly replacing the word “tax” with “fee” in an effort to obtain a simple majority vote to raise taxes on hard-working Californians.

Why did our organization, and the 23,000 small businesses we represent, choose to engage in this lawsuit? Frankly, because California’s “mom and pop” business owners – indeed, our state’s number one job creators – are absolutely outraged. As well they, and millions of other voters throughout the Golden State, should be!

Last November, California voters sent a new crop of presumed “leaders” to Sacramento with the hopes that they would not only create the law, but that they would abide by it as well. Moreover, voters approved Proposition 11, the Voters First Act, to put redistricting into the hands of the people of California, not the elected leaders (foxes) who have for too long been guarding their precious and plum positions (henhouse).

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.

A coalition of unlikely bedfellows, including my own association, is making good on its promise to step on the healthcare gas pedal shortly after America selected a new president.

In a Veterans Day full-page ad in USA Today, the National Federation of Independent Business, America’s largest small business association, AARP, Business Roundtable, and Service Employees International Union sent a joint letter to President-elect Barack Obama calling on him to make healthcare reform one of his top priorities in the first 100 days of his administration.

“If you will commit to taking action on this critical issue early in your administration, we will commit to engaging our members by hosting a health care reform summit, working with you to develop a proposal as part of your agenda for the first 100 days and educating our members about the challenges and trade-offs reform entails,” the letter said.

NFIB, AARP, SEIU and the Business Roundtable launched the Divided We Fail campaign to help build consensus and work toward bipartisan solutions to affordable, high-quality healthcare among the small business, big business, labor and consumer communities that each represents.

Healthcare reform – an on-time state budget – eminent domain reform – education reform. What do all of these issues have in common? They were all sidelined by the partisan gridlock that continuously has our State Capitol in a stranglehold. It is clear that voters have grown tired of inaction in Sacramento and our ongoing budget crisis and wasteful, ineffective spending. The question becomes – what can be done to fix our political system and hold politicians accountable so that the issues facing our state can be resolved?

NFIB/CA believes that Proposition 11 is a step in the right direction. Proposition 11 will create a 14-member independent citizens commission to redraw state legislative district lines based on strict non-partisan rules. Unlike the current process, Proposition 11 will ensure that the redistricting process is open and transparent and will respect existing city and county boundaries and communities. It will exclude individuals with obvious conflicts of interest, including elected officials and their staff from serving on the commission.

With only a few weeks before the election, candidates are running like Usain Bolt to the November 4 finish. Campaigns are focusing on their messages to various constituencies as they try to lure voters to their side.

One key constituency that can’t be forgotten is America’s entrepreneurs. After all, the research shows that 95 percent of small business owners are registered to vote, and 84 percent usually do vote. With the advent of early voting in many states, this number may well increase, as it makes it easier for busy owners to vote when it’s convenient, not just when the polls are open.

The small business community, which includes entrepreneurs and their employees, comprise 43 percent of U.S. registered voters. On the largest single day of voting held so far this year, Super Tuesday, nearly 32 percent of voters were part of this group. These numbers prove that small business is a powerful, motivated group. And they want candidates to address the issues that matter to them.

OK – we get it. The financial bailout program, a.k.a the Emergency Economic Stabilization Act of 2008, didn’t pass muster with our esteemed members of Congress this week. The President’s plan didn’t give our elected leaders – or most Americans – the confidence that it will get our nation’s financial house back in order. We understand. But, sadly, that still leaves us one more day in the red – and all the while, small business owners and our communities continue to suffer.

The many California small business owners that I have spoken to – and countless others throughout the nation – aren’t half as worried about Wall Street as they are about Main Street. They’re extremely angry and frustrated with what has taken place – and they have every right to be. After all, small business men and women – and the people they employ – did not create the financial mess on Wall Street.

While small business owners were doing what they do best – turning ideas into entrepreneurial opportunities, jobs and economic development for their communities -scores of greedy, negligent CEOs within the financial community were taking reckless risks and benefiting financially.

Small business has been watching the budget debate for the past 70 plus days – just like everyone else. The big difference is that time and time again, they are the ones in the cross hairs of our legislative leaders.

Some were surprised that Cal-Tax supported the Governor’s current budget plan, including a tax increase. The reality is that the majority of Cal-Tax members are larger corporations that can easily absorb the cost of any new tax. It is disappointing that they chose to support an onerous new cost to California’s largest job creator, small and independent business.

The small businesses that the National Federation of Independent Business represents don’t adjust as easily to new taxes. They face consequences that the big guys don’t – laying off workers, cutting benefits, increasing prices or closing their doors forever. But beyond that, time and time again when polled, NFIB members stand firm in their chorus of no more taxes. California is one of the worst places to do business in the country – why would our state leaders want to add to an already heavy tax burden?

As I travel throughout California discussing small-business issues with
business owners and operators, a familiar idiom continues to ring inside my
head: You can’t squeeze blood from a turnip.

It must be because that’s just what it feels like some folks are trying to
do to California small businesses and consumers.

As Proposition 13’s 30th anniversary came and went in June—and poll after
poll showed that voters would still support the much-needed tax reform
measure today—some tax “reform” advocates have continued to raise the
specter of commercial property tax increases as a way to dig us out of
California’s budget abyss. What more do they think they can wring out of us?

Proponents try to position commercial property tax increases as “sticking
it” to big business. Not only is their assumption that California businesses
do not already pay their fair share of taxes patently false, they also fail
to acknowledge that increased property taxes will actually be “sticking it”
the most to small businesses, consumers, seniors and renters.

A recent article in the San Jose Mercury News told the story of the competition between several California cities to land a lucrative deal with Tesla Motors. The car manufacturer is looking at several potential Northern California sites for a new factory. As expected, these cities are pulling out the stops to woo Tesla to town – and the estimated 1,000 jobs they could bring with them. The state has already given Tesla a huge sales tax break and the locals will take it to a new level with promises of more incentives and flexibility. It makes one wonder – how much better would it be if California created a positive business environment that did not require big financial give-aways.

California has a reputation of being one of the worst – if not the worst – states for small businesses. Businesses – small and large – are continually confronted with a barrage of mandates day after day. Case in point – last year’s mandated healthcare plan proposed by Governor Schwarzenegger, but defeated in the legislature. AB1X included the largest single tax increase in California history – as high as 6.5 percent, to fund a government-run healthcare pool.