Save small business from government!

Small business is often called the backbone of the economy.  Yet it is the part of the economy most vulnerable to the growing weight of government and is the part most often ignored by politicians. 

It is big business that can afford lobbyists two wine and dine politicians to get special treatment and corporate welfare.  It is big business that can marshal the support of the Arkansas Chamber of Commerce. And, it is big business and the picking of winners and losers that has been the focus of state government over the past four years.

  • 2015 brought a special session to pledge $87 million in state bonds to Lockheed-Martin to try to bring a big expansion to Camden, but despite being approved by the legislature the bonds were never issued because Lockheed-Martin failed to get a federal contract needed before there would be an expansion in Arkansas.
  • In 2015, the legislature proposed a constitutional amendment to remove all limits on how much taxpayer money can be pledged for bonds to attract so called “super projects” such as the Lockheed-Martin expansion that had been proposed. The amendment was approved in November 2016 under the guise of being a “jobs amendment.”
  • In 2013 it was the need of the hospital industry for another source of income that was cited in support of Arkansas adopting Obamacare Medicaid Expansion (first called “Private Option” and now called “Arkansas Works”). The program was implemented in 2014.

What did small business get?  — The privilege of helping pay for new programs and the privilege of having to deal with piles of local, state, and federal regulations.

Small business – An independently owned and operated business, often run by an individual or family. The owners know employees by name and have regular contact with them. A small business commonly has sales ranging from a small amount up to $100 Million. Small business is affected by regulation, over taxation, and unreasonable legal liability, yet, unlike large businesses, do not have the resources to advocate and lobby for advantageous legislation or favorable taxation.

Mostly, small business needs the government to get out-of-the-way by reducing their tax burden and the burden of unneeded regulation. Here are concerns small business owners have shared with us.

Tax relief – Unlike big business, small business owners aren’t looking for special tax exemptions or corporate welfare. Small businesses need Arkansas to make real reforms in the corporate and other business income tax – fair to all business.  Other taxes and fees such as privilege taxes and business license fees need to be reviewed for fairness and purpose.

Regulatory burden – Small businesses are confronted with a mound of local, state, and federal regulations and unlike big business are not able to devote huge resources to navigate endless regulations and when necessary to fight misapplied regulations.

  • The legislature reviews the new regulations of state agencies. It’s time for the legislature to systematically review existing regulations and eliminate outdated and unnecessary regulatory burdens.
  • When a federal agency misapplies its regulations small business owners are in no position to undertake a protracted administrative fight or court fight. Instead of state agencies just helping the federal government enforce federal regulations, state agencies should be interceding on behalf of small business owners when federal bureaucrats misapply the law.
  • Arkansas has a huge number of licensing and regulatory boards, each with their own fiefdom. Do we need so many boards and their staffs? Can free enterprise not policy its on industries?
  • Small business owners must overcome the difficult hurdle of meeting conflicting local interpretations of state standards (such as the fire code). When there are state standards, the state should be helping by providing sensible and uniform interpretations.
  • Tort reform – When tort reform is discussed in the legislature it is sometimes portrayed as a battle between huge corporations and the individual. Yet, it is the small business owner who is most at risk from ridiculous awards and frivolous lawsuits. Small business owners are not able to withstand over inflated judgements, and even if the small business owner believes he or she will prevail in court, the owner may not be able to afford costly litigation.  Weak lawsuits are filed against big businesses in hopes to get a settlement, but small businesses may not be able to afford such settlements.

Work-force reform – Work-force training is now one of the hottest topics discussed among those running government.  But other than specialty areas, most small business owners prefer to hire a dependable employee who shows up with an attitude and aptitude for success and leave the training to them. This starts with a good education from K-12.  Too much emphasis has been placed on preparing and educating for college and then in the alternative offering vocational training.  Just give small business a work force who reads and writes and is competent in math when graduating high school and small business owners can take it from there.

With the Governor and two thirds of both the Arkansas House and Senate being Republican surely the 2017 legislative session will be the time to reverse the trend and instead of adding burdens on small business owners, give them real and substantial relief.