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How the 900-pound federal gorilla becomes the King Kong that clobbers small businesses?
There’s an argument to make that businesses in Los Alamos would not be here without the government, the “900 pound Federal Gorilla.” Indeed, my 17-year-old small business and optometry practice would not have existed or grown without it. However, many times the government becomes a sort of King Kong that pounds on small businesses with over-regulation, excessive taxation and wage control.
Over-regulation. One example is the CMS required International Classification of Diseases, 10th revision (ICD-10) codes for medical insurance billing. Currently, there are 14,000 diagnosis codes and 4,000 procedure codes. ICD-10 will replace these, with 70,000 diagnosis codes and 87,000 procedure codes. For every medical practice, this means outrageously expensive software and computer upgrades, more IT support and staff training, and more work for the doctors, with no improvement on patient care. No wonder policy experts predict a decline in the number of medical private practices over the next decade.
Excessive taxation. There should be reasonable taxation to pay for the infrastructure necessary for success. However, excessive taxation blocks small businesses from renovation and improvement. It also creates a disincentive to expand and create new jobs.
In 2012, Gov. Susana Martinez supported legislation that decreased my unemployment tax rate from 1.8 percent to .6 percent, which was a significant measure of tax relief. In 2014, the governor announced a reduction in unemployment insurance fraud, which helps to keep unemployment taxes low. Please, let’s see more of this!
Wage control. We need to give small businesses the ability to make smart payroll choices specific to their economic situation. Minimum wage increases above what the governor proposed would have the most negative impact on smaller restaurants, which are already struggling in a weak economy and cannot absorb higher labor costs.
Equally impacted would be newer small businesses, as well as teenagers and adults without job experience and skills. If there is to be an increase in minimum wage, we ought to exempt those small businesses grossing less than $150,000 per year.
Further, we should offer tax incentives to those businesses that offer higher wages.
Lastly, we need to strengthen programs for skills and apprenticeship training, which creates more opportunities for higher paying jobs.
We need legislators who are willing to reach across the aisle to write policies agreeable both to the public and to small businesses. Skew this to one side, and both are hurt in the end. When small businesses thrive, not only are there more jobs but also better choices in products and services. Increased gross receipts revenue means more money for public service programs.
Let’s ask all small business owners, “What legislation would help grow your business?” I invite all small business owners to a breakfast meeting with Vincent Chiravalle, 7:30 a.m. May 15 at the Chamber of Commerce to discuss. Please RSVP at 662-9681.