Small businesses comprise 90% of California's one-million strong business community and employ more than half of all Californians. California's small businesses, approximately one-third of which are minority owned, provide a vital opportunity for upward mobility. Small business fuels innovation, employment opportunities and economic expansion that benefit all Californians.
SBAC President Joel Fox sitting opposite Governor Arnold Schwarzenegger and former Governors Pete Wilson and Gray Davis discussing redistricting reform.
Despite the importance of small business to California's economic health, businesses must swim upstream against obstacles such as high health care costs, onerous regulations, skyrocketing energy costs, difficult labor laws, uncertain attempts to change workers comp reform and unfavorable tax laws.
By nearly every measure California’s business climate is in the dumps.
California’s unemployment rate is well above the national average.
The 2009 Small Business Survival Index ranked California one of the worst public policy climates for small business and entrepreneurship.
The 2010 State Business Tax Climate Index ranked California 48th in the country.
Small business bankruptcy filings rose 64% in California between 2008 and 2009 -- 26,292 bankruptcy filings last year.
The U.S. Census Bureau found one out of every six businesses that closed in 2008 was in California.
Business executives rated California the state where they were least likely to locate new operations.
While many of these executives were from big business, it is clear that when big businesses choose to do business in other states, small businesses suffer. Many small businesses are subcontractors to big business.
There is a solution to the many problems faced by our businesses today. Free up businesses to do what they do best. If we lessen the burden on business, they will create more jobs and provide more revenues to help all the citizens of the state. Kosmont estimated that adding 173,000 jobs a year would bring $35 billion in new tax revenue to the state in ten years. But creating jobs means cutting costs and reducing unneeded regulations.
Maybe the best example occurred after the Small Business Action Committee helped lead the fight to cut the most onerous workers compensation insurance rates in the nation. When insurance rates started to plunge, many businesses used their insurance savings to hire new employees and expand their businesses.
The workers comp fight was the first major effort the Small Business Action Committee took on as soon as it was formed in 2003. And positive results came swiftly. SBAC filed an initiative to reform the workers comp codes. SBAC President Joel Fox and SBAC Chairman of the Board of Governors Chris George were proponents of the initiative. Consolidating other groups that were considering initiatives behind the SBAC effort, our organization gathered well over 1-million signatures to put the initiative on the ballot.
SBAC President, Joel Fox (right) and (then) SBAC Board of
Governors Chariman, Chris George (left) stand behind
Governor Arnold Schwarzanegger at a rally sponsored
by the SBAC in support of the Governor's reforms.
In the meantime, newly elected governor, Arnold Schwarzenegger, was negotiating with the Legislature over workers comp reforms. The reform package came together only a couple of days before Fox and George had to make the decision to file the petition signatures to get the measure on the next statewide ballot. On the day that decision had to be made, both houses of the Legislature voted on the reform package, SB-899, authored by Senator Chuck Poochigian. Most legislators speaking that day acknowledged they were voting for the bill because the initiative forced their hand.
With SB-899 passing, SBAC did not file the initiative. But reform was at hand because of SBAC’s efforts. And reform was a success! Workers Compensation insurance rates have dropped about 55% over three years.
SBAC continues to monitor the workings of the workers comp law as well as readying a defense of the successful reform. When forces opposed to SB 899 filed initiatives to change the law, SBAC immediately went into action. We formed a campaign committee called The Committee Against the Job Killer Initiatives and recruited many businesses, large and small, to our effort. Our bold, quick stand convinced reform opponents to back off and abandon the proposed initiatives. We remain ever-vigilante expecting them to try again.
While workers comp was our first and most import success, SBAC has also been deeply involved in other political actions to protect small business.
SBAC was a leader in the successful Proposition 64 effort to eliminate shakedown lawsuits in California. For example, no longer will lawsuits be filed over simple advertisement errors, pressuring businesses into settlements instead of costly court fights.
SBAC was also a leader in two efforts to stop “Split Roll” property taxes which would have raised property taxes on business property; and also led the effort to defeat Proposition 82, a tax increase measure that would have hurt the economy and state general fund as well as effect small businesses that file taxes through the personal income tax. SBAC was a leader in the effort to oppose Proposition 88, another tax increase on all property owners in the state.
The Small Business Action Committee is developing plans for long term efforts to improve the business climate in the state. SBAC plans to attack problems of regulations on small business growth; and the organization is committed to an advocacy campaign to convince policymakers the importance of a healthy business environment. Those policy makers, in particular, include the people of California who make so many policy decisions at the ballot box.
The Small Business Action Committee will continue to stand guard and fight for small business. With your help we will improve the lives of all Californians.