As executive director of the National Federation of Independent Business here in California, I hear from small business owners on a regular basis about how impossible it is to survive in our state. Many wish that they could move their businesses to another state that is much more business-friendly and actually makes a concerted effort to keep them – and their business – there. Last month, I had the opportunity to attend a legislative hearing in Reno, Nevada about why businesses are leaving California. It once again reaffirmed why businesses are struggling here – and why they are leaving in record numbers.
One business owner who used to be located in Fresno recently moved to Nevada because he felt there were no compelling incentives to stay in California. One shocking reason he cited for leaving our state is that our in-state costs actually make it more expensive for him to ship goods from Fresno to Southern California than from Reno to Southern California!
Another business owner who was a native Californian moved to Nevada and found the welcome mat rolled out to meet him. "I had problems with red tape and tax burdens in California," he said. "I moved to Nevada, and from day one they've been willing to help me so that I am successful."
Another former California business owner had a message for state leaders: "Don't place unnecessary burdens on businesses. Leave us alone so we can focus on running our business, not dealing with regulations."
The speaker that struck me the most was a recruiter whose job is to lure businesses away from California to Nevada. He is specifically charged with showing business owners Nevada's abundant pro-business, pro-job amenities, and which businesses have moved there and why. The recruiter admitted, "We love mom-and-pop small businesses," as it's far easier for them to uproot than the bigger firms.
It is time for our leaders to start listening to our businesses before it is too late and they become yet another statistic: increasing regulations, burdensome taxes and other roadblocks to economic and job growth in California are killing small businesses. How much higher does the 11.2% unemployment rate need to get before it actually resonates that we need to attract and retain jobs – and the small businesses that employ them? While many may live to tell the tale of moving to another, more business-friendly state, there are those who simply shut their doors and disappear. It is those businesses who don't have a chance to tell their stories and sadly lose their American dream – owning their own business.
One of the ways that we can begin to help small businesses in our state is by putting forth small business-friendly legislation. That is why NFIB/California is proud to be a sponsor of Senate Bill 356 by Senator Rod Wright – Small Business Regulatory Reform. This bill requires state agencies to prepare a small business economic impact statement prior to submitting a regulatory proposal, and requires agencies to actively seek out the input of small business owners during the regulatory drafting process. Better regulations that initially inform and involve small businesses will benefit the health and safety of Californians and allow small businesses to create more jobs that benefit the pocketbooks of the million-plus Californians out of work today.
Legislation like SB 356 is just the tip of the iceberg in terms of what we can do to help our small businesses. Our state leaders also need to think carefully before loading costly government programs like mandated paid sick leave or healthcare payroll taxes upon already struggling Californians. While perhaps well-intended, these types of one-size-fits-all programs will only have the reverse effect on the very individuals they aim to help: working Californians. If our leaders truly want to make a difference and see jobs and the economy grow in our state, they need to focus on bills that provide incentives for business to remain and thrive in California.
Our leaders ought to consider taking a page from Nevada's playbook by developing an effort wholly focused on retaining and recruiting businesses in California. Before we begin to court any new businesses into California, though, we must first reach out to existing struggling businesses in our state and ask them, "How can we help?"
By affording businesses this critically-important level of communication, service and respect, California's government leaders will find, as those in other pro-business states have found, that paving the way to economic and job growth benefits everyone and will earn the Golden State the luster and reputation it once enjoyed as the envy of the world and a great place to call home.