In recent months, it seems that the most popular topic
among those under the Capitol dome is regulatory reform.
The National Federation of Independent Business and
small businesses across the state are encouraged by
this recent call to action from both sides of the aisle
for regulatory reform in California – indeed, a “Sacramento Reg-aissance," so to speak.
We appreciate the growing interest and commitment to
fixing our broken regulatory process and system. Small
business owners pay 45 percent more to comply with regulations than larger
businesses and the average small business pays about
$143,000 a year to comply directly or indirectly with state
regulations. Just asking the average mom-and-pop owner to interpret complex, duplicative regulations
at every level forces them to wear the hat of compliance
or legal expert instead of doing what they do best
– support their communities, feed the economy and create
NFIB and other job creators throughout California have
been calling upon our leaders to reform the regulatory
process for quite some time.
We had hoped to achieve meaningful reforms through
SB 365 (Wright) last year, but to no avail. We are heartened that
various members of the legislature and Gov. Brown have
raised the volume on the need for sustainable policy
that will achieve those goals.
But while regulatory reform is an important way we
can help California’s leading job creators get out of the hole they’re in, it is merely one rung of the ladder. Our leaders
have a real opportunity and should not forget other
important rungs that will help the corner machine-shop owner, baker, dry cleaner and small businesses
in all of our communities get back on the road to recovery,
create jobs and contribute to the local and state economy.
First, our leaders need to take a serious look at bills
that will impose a new cost. Call it a fee, assessment,
levy or tax, in the end, these are all new and unanticipated
costs that small business owners can ill-afford to absorb at this time. Most will tell you they’ve already slashed costs wherever possible - overhead, utilities, infrastructure – to make ends meet and avoid the last dreaded option: their valued employees. So, any new costs will result
in the “law of unintended consequences” and have the opposite effect – employees struggling to keep their jobs sent packing
and to the unemployment line.
Bills increasing taxes and fees do nothing to get businesses
back on track.
Small business owners and Californians spoke two years
ago and this past November, making that clear.
Our leaders also need to understand the impact new
health care mandates will have on small business. Yes,
small business believes health care reform is the #1 concern – as evidenced by our national surveys over the past
20 years. Obviously we want change. But new mandates
are the wrong approach – again, because small businesses are in a deep hole.
Forcing them to comply with new costs and requirements
they cannot absorb will have a net negative effect
on employees – the unintended consequence for health care. That is
why NFIB members in California and across the nation
the federal health care law and why NFIB is the only
business organization in the country joining 26 attorneys general challenging the constitutionality
of an individual mandate. Yet, the California legislature
is considering almost 20 health care benefit mandates that drive the cost of
health insurance coverage in our state higher. These
measures should be held until the federal government
determines what is an essential benefit policy and
the California Health Insurance Exchange is operational.
Americans with Disabilities Act (ADA) lawsuits are rampant in every community – this is not about justice, it’s about plaintiffs’ attorneys making a fast dollar.
More than one-third of small business owners have been sued in the
past five years and nearly 6 in 10 have been threatened with a lawsuit during the same
Small business is preyed upon more than any other size
business because attorneys know they’re more willing to settle.
We are heartened to know that we have a governor and
many other leaders in the Capitol who come to the table
with legal experience and understanding. There is a
great opportunity for them and others to seize the
day and truly be champions for fixing our broken legal
system and ensure it’s doing the right thing with the right outcomes – not padding the pockets of greedy, malicious lawyers
who want nothing more than a fast payout.
Now is the time to act in California – never has there been a time when the stars have aligned
so that real reform can take place.
NFIB and small businesses stand ready to work with
our elected leaders to make that happen.