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NFIB Jobs Statement: Job Gains in August? Keep Your Expectations Low

September 1, 2011 By Leave a Comment

WASHINGTON, D.C., September 1, 2011 — Chief economist for the National Federation of Independent Business (NFIB) William C. Dunkelberg, issued the following statement on August job numbers, based on NFIB’s monthly economic survey that will be released on Tuesday, September 13, 2011. The survey was conducted in August and reflects 926 randomly-sampled NFIB members:

“We wish there was good news to report, but sadly, we will give you more of the same: The prospects for a good jobs report are dim. In August, small-business owners reported job losses averaging .08 workers per firm over the last three months. This follows a loss of .23 workers per firm reported in June and .15 workers per firm in July. The good news is that the trend is moving in the right direction—losses appear to be decreasing—although it doesn’t seem to be moving fast enough to close the employment void we’ve been experiencing for the last several years.

“Seasonally adjusted, 14 percent of owners reported reducing employment an average of 2.7 workers per firm; that compared to 12 percent of the owners that added an average of 3.1 workers per firm. The remaining 74 percent of owners made no net change in employment (48 percent hired or tried to hire while 33 percent reported few or no qualified applicants for positions). Fifteen percent (seasonally adjusted) reported hard to fill job openings (up 3 points).

“While the readings remain historically weak, we can find a grain of encouragement as we look at hiring prospects. Over the next three months, 11 percent plan to increase employment (up 1 point), and 12 percent plan to reduce their workforce (also up 1 point), yielding a seasonally adjusted net 5 percent of owners planning to create new jobs, which is a 3 point improvement over July. But, let’s not get ahead of ourselves.

“By region, job creation plans were weakest in the Mid-Atlantic, South Atlantic and Pacific states—something that could change dramatically in areas impacted by Hurricane Irene that will require additional workers for cleanup and repairs. By sector, manufacturers made some good news, showing the strongest level of growth among the sectors surveyed, compared to retail and professional service firms which also were positive but slightly weaker. All other industries reported virtually no change with the exception of construction.

“Overall, the employment picture is largely unchanged. We anticipate a weak payroll number and little change in the unemployment rate.”

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NFIB is the nation’s leading small business association, with offices in Washington, D.C., and all 50 state capitals. Founded in 1943 as a nonprofit, nonpartisan organization, NFIB gives small and independent business owners a voice in shaping the public policy issues that affect their business. NFIB’s powerful network of grassroots activists send their views directly to state and federal lawmakers through our unique member-only ballot, thus playing a critical role in supporting America’s free enterprise system. NFIB’s mission is to promote and protect the right of our members to own, operate and grow their businesses. More information is available online at www.NFIB.com/newsroom.

Filed Under: Economics, Jobs/Labor, Press Release, Small Business

NFIB: NLRB Overreaches its Authority with Punitive New Rule

August 25, 2011 By 2 Comments

More than six million businesses to be affected

WASHINGTON, D.C., August 25, 2011 — The same week the Obama Administration announced it was making an effort to scale back burdensome rules on small businesses, the National Labor Relations Board (NLRB), the federal government’s labor union advocate, demonstrated an unprecedented overreach of its authority today by issuing a punitive new rule requiring all private-sector employers to post a notice in their business informing employees of their rights under the National Labor Relations Act.

“Just when we thought we had seen it all from the NLRB, it has reached a new low in its zeal to punish small-business owners,” said Karen Harned, executive director of NFIB’s Small Business Legal Center. “Not only is the Board blatantly moving beyond its legal authority by issuing this rule, it is unabashedly showing its spite for job creators by setting up a trap for millions of businesses.”

Under the National Labor Relations Act, the NLRB does not have the authority to broadly impose rules, such as the one issued today. The statute only permits the Board to act when a representation petition or unfair labor practice charge is filed.

Furthermore, the rule sets up a “gotcha” situation for millions of businesses who are unaware of the new rule or unable to immediately comply.

The NFIB submitted a statement opposing the rule during a public comment period in February. The comments can be found at the following link: http://www.nfib.com/LinkClick.aspx?fileticket=kMpH1o6T6uM%3d&tabid=1083

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NFIB is the nation’s leading small business association, with offices in Washington, D.C. and all 50 state capitals. Founded in 1943 as a nonprofit, nonpartisan organization, NFIB gives small and independent business owners a voice in shaping the public policy issues that affect their business. NFIB’s powerful network of grassroots activists send their views directly to state and federal lawmakers through our unique member-only ballot, thus playing a critical role in supporting America’s free enterprise system. NFIB’s mission is to promote and protect the right of our members to own, operate and grow their businesses. More information is available online at www.NFIB.com/newsroom.

Filed Under: Federal Government, Jobs/Labor, Press Release, Regulations, Small Business

NFIB Launches Campaign to Highlight Regulatory Burden on Small Businesses

August 3, 2011 By Leave a Comment

Small Businesses for Sensible Regulations says federal regulations stifling job growth

WASHINGTON, D.C., August 3, 2011 — The nation’s leading small-business organization, the National Federation of Independent Business (NFIB), today launched a new campaign targeting the increasing number of regulations handed down by the Obama administration that are hampering small business’ ability to create jobs and economic growth.  The multi-year effort aims to give voice to America’s small businesses, which create two-thirds of the net new jobs in the U.S. each year. Former U.S. Senator and Small Businesses for Sensible Regulations chairwoman Blanche Lincoln joined NFIB President Dan Danner to announce the coalition in Washington.

“Small businesses have long carried a disproportionate share of the federal regulatory burden,” Sen. Lincoln said. “While some regulation is essential, there are more than 4,200 new environmental, financial, labor and other regulations pending at the federal level today, which are causing uncertainty and ultimately harming small businesses and their ability to create jobs. This is simply unsustainable in our struggling economy.”  Senator Lincoln spent 16 years representing Arkansas in Congress, where she consistently promoted small business interests, making her an ideal spokeswoman for NFIB’s effort to promote sensible regulations.

According to a report conducted for the Small Business Administration’s office of advocacy last year, government regulations currently cost the U.S. economy $1.75 trillion a year, or more than 12 percent of our national GDP.  In the last five years, there has been a 60 percent increase in pending federal regulations that are defined as “major” or “economically significant” – costing the economy $100 million or more.

“In NFIB’s history, few issues have been more important to America’s small businesses than bringing balance to the federal regulatory process,” NFIB President Dan Danner added. “Complying with federal regulations is incredibly costly to small businesses – the average business pays over $10,000 dollars per employee to stay in line with government rules.”

Small Businesses for Sensible Regulations seeks to ensure that the administration includes independent analysis of the long-term impacts of federal regulations on jobs, economic growth, and other indirect costs like retaining American industries in the federal regulatory process moving forward.

More than 150 businesses and organizations in six states – Florida, Nevada, North Carolina, Ohio, Pennsylvania, and Virginia – have joined the coalition to date.

Over the next several months, the coalition will work to bring personal stories of those facing economic hardships as a result of regulations to the national spotlight.  The campaign will also release economic and other analysis in several states to expose the heavy regulatory burdens suffered by small business owners.

For more information on the new project, visit the Small Businesses for Sensible Regulations website here: www.sensibleregulations.org

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NFIB is the nation’s leading small business association, with offices in Washington, D.C. and all 50 state capitals. Founded in 1943 as a nonprofit, nonpartisan organization, NFIB gives small and independent business owners a voice in shaping the public policy issues that affect their business. NFIB’s powerful network of grassroots activists send their views directly to state and federal lawmakers through our unique member-only ballot, thus playing a critical role in supporting America’s free enterprise system. NFIB’s mission is to promote and protect the right of our members to own, operate and grow their businesses. More information is available online at www.NFIB.com/newsroom.

Filed Under: Economics, Press Release, Regulations

NFIB Endorses Senate President Russell Pearce for Election—Again!

July 25, 2011 By 3 Comments

Small-business association standing up for lawmaker who has stood up for its members

PHOENIX, Ariz., July 25, 2011 — In a less petty political world, no association should have to issue a news released endorsing a candidate for the state legislature in a July of an odd-numbered year, but in doing so today Arizona’s leading small-business group wanted to make an early, emphatic and unqualified endorsement of Senate President Russell Pearce for election, once again, to his 18th Legislative District seat.

“We’re making our endorsement of Russell Pearce early to register small business’ strong support for one of Arizona’s most pro-small business lawmakers as he faces a needless November 8th special election to represent a constituency who overwhelmingly voted for him nine months ago just as they have in five prior elections,” said Farrell Quinlan, Arizona state director for the National Federation of Independent Business.

“Small business is rallying to stand up for the man who has stood up for small business for more than a decade.  His recall is a shameful abuse of the election process and a wasteful distraction from the Legislature’s important work of helping Arizona’s private sector create jobs again.  Nothing in Russell Pearce’s actions since the last election warrants this recall election.  The next regular election would have been the appropriate time for his political opponents to try a seventh time to defeat him.

“With apologies to noted political philosopher Dennis Green, District 18 voters will say ‘Russell Pearce is who we thought he was!’ and re-elect him handily on November 8th,” Quinlan quipped.

In the May release of NFIB’s 2011 legislative Voting Record, Pearce posted a 100-percent, pro-small-business voting tally on 15 issues vital to Main Street, mom-and-pop businesses repeating his perfect voting record on small business’ legislative agenda from 2009-2010.

The formal endorsement of Pearce was made by the NFIB/Arizona SAFE Trust, the political action arm of the association. More information can be found on President Pearce’s website at www.russellpearce.com.

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NFIB is Arizona’s and the nation’s leading small business advocacy association, with offices in Washington, D.C. and all 50 state capitals. Founded in 1943 as a nonprofit, nonpartisan organization, NFIB gives small- and independent-business owners a voice in shaping the public policy issues that affect their business. NFIB’s powerful network of grassroots activists send their views directly to state and federal lawmakers through our unique member-only ballot, thus playing a critical role in supporting America’s free enterprise system.

Filed Under: Campaigns & Elections, Endorsements, Press Release, Small Business Tagged With: ,

NFIB: Small Business Optimism Stagnates, Main Street Desperately in Search of Reasons to be Positive

July 12, 2011 By 1 Comment
WASHINGTON, July 12, 2011 – NFIB’s monthly Small-Business Optimism Index dropped one tenth of a point (0.1) in June, settling at 90.8, an unsurprising reading, basically unchanged from the previous month and solidly in recession territory. While some indicators rose slightly – including expected capital outlays – pessimism about future business conditions and expected real sales gains tugged the Index down, causing a small but disappointing drop in the Index for the fourth consecutive month. Although June marked the second year anniversary of the recovery, it appeared there was little happening to make small business owners optimistic.

“Small-business owners are registering a vote of ‘no confidence’ in the federal government,” said NFIB Chief Economist Bill Dunkelberg. “Between the deluge of new regulations and a Washington policy agenda that is largely ignorant of Main Street needs, stubbornly low consumer spending, and grave concern among small firms about the federal budget, there is not much to be optimistic about as a small-business owner. Who can blame the prevalence of pessimism when administration officials are telling Congress that small businesses need to pay more in taxes to support government spending programs?”

Earnings trends for small businesses remained distressingly negative in June, particularly given that the recovery is now beginning its third year. According to today’s report, 69 percent of the owners view the current period as a poor time to expand and 75 percent of those blame the weak economy for their outlook, while 10  percent cite political uncertainty.

Some other highlights of June’s Optimism Index include:

  • Although June’s employment growth was weak, 15 percent (seasonally adjusted) of small firms reported unfilled job openings, a 3 point increase from May and an indication that the unemployment rate will ease back below 9 percent in the late summer or early fall. Over the next three months, 11 percent plan to increase employment (down 2 points), and 7 percent plan to reduce their workforce (down 1 point), yielding a seasonally adjusted 3 percent of owners planning to create new jobs, and a 4 point improvement. However, these statistics are still at recession levels and any real employment gains are still to be realized.
  • Inflation has slowed slightly, due in part to a leveling of gas prices. However, the fact that small firms are raising prices at all provides a glimmer of hope in an otherwise lackluster economic report. Twenty-five percent of the NFIB owners reported raising their average selling prices in the past three months, compared to 16 percent who reported price reductions. Seasonally adjusted, the net percent raising selling prices was 10 percent, down 5 points from May, but this registered as the third consecutive double-digit month and is 23 points higher than a year ago.
  • The sales outlook for small firms continues to look grim as expectations have declined for 4 months in a row and “poor sales” continues to be the #1 problem for owners in operating their business.    The net percent of owners expecting higher real sales fell 3 points to a net 0 percent of all owners (seasonally adjusted), 13 points below January’s reading. The net percent of all owners (seasonally adjusted) reporting higher nominal sales over the past 3 months improved 2 percentage points, rising to a net negative 7 percent, more firms with sales trending down than up.
  • Over the past six months, 50 percent of all firms reported making capital expenditures, an historically low average. Of those making expenditures in June, 32 percent reported spending on new equipment (down 4 points), 19 percent acquired vehicles (up 3 points), and 11 percent improved or expanded facilities (up 2 points). Five percent acquired new buildings or land for expansion (up 1 point) and 10 percent spent money for new fixtures and furniture (down 2 points).  There was a slight increase in firms planning capital outlays in the next 3 to 6 months; this indicator rose 1 point to 21 percent, although still a recession level reading. Money is available, but most owners are not interested in a loan to finance the purchase of equipment they don’t need.
  • Access to credit remains a limited problem as it continues to affect a small percentage of owners.  Three percent of owners reported financing as their #1 business problem and 91 percent reported that all their credit needs were met or that they were not interested in borrowing.  Nine percent reported that not all of their credit needs were satisfied, 53 percent said they did not want a loan and 13 percent did not answer the question and might be presumed to be uninterested in borrowing as well.  So, for the overwhelming majority of owners, “credit supply” is not a problem. Twenty-nine percent of all owners reported borrowing on a regular basis, unchanged from May and only 1 point above the record low.

Today’s report is based on the responses of 766 randomly sampled small businesses in NFIB’s membership, surveyed throughout the month of June. Download the complete study at http://www.nfib.com/sbetindex.

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NFIB’s Small Business Economic Trends is a monthly survey of small-business owners’ plans and opinions. Decision makers at the federal, state and local levels actively monitor these reports, ensuring that the voice of small business is heard. The NFIB Research Foundation conducts some of the most comprehensive research of small-business issues in the nation. The National Federation of Independent Business is the nation’s leading small-business association. A nonprofit, nonpartisan organization founded in 1943, NFIB represents the consensus views of its members in Washington, D.C., and all 50 state capitals.

Filed Under: Economics

NFIB Jobs Statement: June is a Bust, but July Looks Hopeful

July 6, 2011 By Leave a Comment

WASHINGTON, D.C., July 6, 2011 — Chief economist for the National Federation of Independent Business (NFIB) William C. Dunkelberg, issued the following statement on June’s job numbers, based on NFIB’s monthly economic survey that will be released on Tuesday, July 12, 2011. The survey was conducted in June and reflects 766 randomly-sampled NFIB members:

“New jobs are not to be found on Main Street. For small firms, reported job losses per firm declined sharply in June, as did the net percent of firms that increased employment over the last three months. A seasonally adjusted net negative 7 percent of owners increased employment, a 4 point increase from May.

“Seasonally adjusted, 9 percent of owners hired new employees last month, a 1 point decline from May, while 16 percent reduced employment, a 3 point increase. The remaining 75 percent of owners made no change in employment. Manufacturing was the only winning sector to post average positive net growth; but job losses were posted by firms in financial, non-professional services, construction, negating any gains made.

“The poor recovery in the jobs numbers is a result of very low housing starts activity and lagging expenditures on ‘services,’ both labor intensive industries dominated by small firms. The most recent reports on consumer spending show continued weakness (except paying more for food and gas) and housing starts show no hope for much job creation in construction.

“Fifteen percent (seasonally adjusted) reported unfilled job openings (up 3 points), indicating a decline in the unemployment rate. Over the next three months, 11 percent plan to increase employment (down 2 points), and 7 percent plan to reduce their workforce (down 1 point), yielding a seasonally adjusted net 3 percent of owners planning to create new jobs, a 4 point gain from May. So, going forward, the job picture is a bit brighter than June’s actual dismal performance.

“But overall, the June employment numbers quashed any hope of establishing positive trend in job creation. It was a serious reversal.”

NFIB is the nation’s leading small business association, with offices in Washington, D.C., and all 50 state capitals. Founded in 1943 as a nonprofit, nonpartisan organization, NFIB gives small and independent business owners a voice in shaping the public policy issues that affect their business. NFIB’s powerful network of grassroots activists send their views directly to state and federal lawmakers through our unique member-only ballot, thus playing a critical role in supporting America’s free enterprise system. NFIB’s mission is to promote and protect the right of our members to own, operate and grow their businesses. More information is available online at www.NFIB.com/newsroom. 

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Filed Under: Economics

None of Arizona’s “Free Money” Being Spent by Other States in Wake of Extended Benefits Session

June 17, 2011 By 5 Comments

By Farrell Quinlan

The Arizona Legislature’s recently concluded special session on extending unemployment benefits revealed a number of misconceptions, misunderstandings and misrepresentations on how America’s and Arizona’s unemployment insurance systems work. Because unemployment benefits are governed by the weaving of complex federal and state laws that are designed to reflect certain principles of insurance and federalism, it is no surprise that the news media, elected officials, business owners and the general public were confused and developed certain assumptions that are untrue.

Two of the most broadly held but incorrectly understood aspects of triggering unemployment benefits in addition to the 72 weeks of regular state and federal emergency unemployment benefits are 1) who’s paying for the benefits and 2) who’s getting that money now that Arizona has forgone extending benefits.

There’s NO Free Money

Private-sector employers in Arizona pay 100 percent of all unemployment benefits regardless if the benefits are paid from state or federal accounts. Public-sector or government unemployment benefit liabilities are paid on a pay-as-you-go basis and do not contribute to net balances in the corpuses of the various state and federal unemployment insurance trust funds. Businesses are responsible for funding the state and federal accounts from which regular and extended benefits are paid. When the federal government “covers” extended benefits, the money is taken directly from an account that is 100 percent funded by the federal unemployment tax paid by private-sector employers.

That’s not just rhetoric from a small business advocate. According to latest UI Outlook report from the U.S. Department of Labor’s Office of Unemployment Insurance, Division of Fiscal and Actuarial Services:

Heavy borrowing from the Federal Unemployment Account (FUA) is projected to continue over the next few years. The aggregate loan balance is projected to increase from $40.2 billion at the end of FY 2010 to a peak end-of-year balance of $68.3 billion in FY 2013. Up to 40 states are projected to borrow…  Due to the high volume of state loans and increased [extended benefit] payments, FUA and EUCA [the Extended Unemployment Compensation Account] are projected to borrow $26.7 billion from the general fund in FY 2011 and an additional $19.4 billion in FY 2012. The general fund advances must be repaid with interest. Neither account is projected to return to a net positive balance by 2016. [Emphasis added]

Those FUA and EUCA accounts are 100 percent funded by the federal unemployment tax paid by private-sector employers (currently $56 per year per employee).  The general fund “advances” are only significant in providing the necessary liquidity to pay these extended benefits. They do not “cover” the cost with “free money” or money paid for by employees through their federal income taxes. These accounts are incurring massive negative balances that the U.S. Department of Labor says must be covered by future federal unemployment tax receipts—and with interest!

No Other State Gets “Arizona’s Money”

The second biggest misunderstanding commonly repeated during the extended benefits debate was the idea that some other workers in some other state would be getting the benefits that Arizona is not accessing. Our unemployment insurance system is not set up like 2009’s federal stimulus program that committed the U.S. Treasury to spend a fixed amount of money and spread it around to those states participating. Instead, extended unemployment benefits are paid based on a state’s underlying unemployment insurance structure and limits. By Arizona not extending benefits beyond 72 weeks, the federal accounts providing liquidity will not accrue more negative balances that must be repaid with interest through taxes on private-sector employers. Moreover, Arizona saved the federal government from needing to add to the $14.3 trillion national debt to loan cash to the FUA and EUCA accounts to cover extended benefits past 72 weeks.

The debate over the extension of unemployment benefits is an important one requiring the careful and considered judgment of our elected representatives in Congress and state legislatures.  But that debate must not be distorted by erroneous information and the misreading of fundamental facts. Arizonans out-of-work through no fault of their own and the private-sector businesses responsible to pay taxes to fund unemployment benefits deserve a full and fair debate based on the truth, not misrepresentations.

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Farrell Quinlan is state director for the National Federation of Independent Business which has 7,500 small business members in Arizona.

Filed Under: Economics, Federal Government, Legislation, Spending, State Government, Taxation Tagged With:

NFIB: Consumer Spending Remains Weak; Small-Business Optimism Dips a Little Lower

June 14, 2011 By Leave a Comment

Cynthia Magnuson 202-314-2036 (media)
Holly Wade 202-314-2022 (research)

WASHINGTON, June 14, 2011 – For the third consecutive month, NFIB’s Small Business Optimism Index fell. While the drop was slight—0.3 points, with the index settling at 90.9 in May—the index makes clear that optimism is moving in the wrong direction: a recession-level reading for an economy fighting its way through a recovery. A leading cause of the low reading is the stubborn problem of weak consumer spending, which is especially problematic for services, a sector dominated by small businesses. 

“Corporate profits may be at a record high, but businesses on Main Street are still scraping by,” said NFIB chief economist Bill Dunkelberg. “Washington is throwing misdirected policies at the problem, offering tax breaks for hiring and equipment investment, but acting surprised when they don’t bear any fruit. The failure to understand why small-business owners are not hiring or investing has resulted in a set of policies that have not been very effective, and Main Street is suffering. The icing on the cake: the growing debt, large deficits, threats of higher taxes, regulations being spewed out by state and local administrations, and the uncertainty of the new health care law—is it any wonder that optimism is down?”

For the third month running, several key economic indicators continued their downward tumble. Job market indicators continued to deteriorate, anticipating very weak job creation and a higher unemployment rate. Capital spending plans and inventory investment plans all weakened and remain at recession levels. Inflation continues to rise, a notable business concern for owners who are raising their own prices at the fastest pace seen in years. And driving the economic uncertainty, one in four owners still report weak sales as their top business problem (followed by taxes and regulations and red tape, only 3 percent cite financing).

Some other highlights of May’s Optimism Index include:

  • For small firms, the average employment change was +0.01 employees (per firm) over the past three months, or virtually zero. Twelve percent (seasonally adjusted) reported unfilled job openings, down 2 points and a clear signal that unemployment rates will rise. Over the next three months, 13 percent plan to increase employment (down 3 points from April, down 5 points from March), and 8 percent plan to reduce their workforce (up 2 points), yielding a seasonally adjusted net negative 1 percent of owners planning to create new jobs.
  • Only 5 percent of the owners view the current period as a good time to expand; of those who view it as a bad time to expand, 71 percent of those blame the weak economy, and 14 percent cite political uncertainty.  The net percent of owners expecting better business conditions in six months was a negative 5 percent, 15 percentage points lower than January. 
  • Capital spending remains historically low in spite of very low interest rates and all sorts of expensing incentives. Fifty percent of firms reported making capital expenditures over the past six months, and the percent of owners planning capital outlays in the next 3 to 6 months fell 1 point to 20 percent, a recession level reading.
  • Sales are down; the net percent of all owners (seasonally adjusted) reporting higher nominal sales over the past three months lost 4 percentage points, falling to a net negative 9 percent, with more firms with sales trending down than up.  Unadjusted, 23 percent of all owners reported higher sales (last three months compared to prior three months, up 1 point) while 36 percent reported lower sales (unchanged). The net percent of owners expecting higher real sales fell 2 points to a net 3 percent of all owners (seasonally adjusted), 10 points below January’s reading. 
  • The seasonally adjusted net percent of owners raising average selling prices reached 15 percent,  up 3 points. Thirty-one percent reported raising average selling prices which is twice the percent of owners who are cutting prices, suggesting that average price levels will be rising, or inflation.

Today’s report is based on the responses of 733 randomly sampled small businesses in NFIB’s membership, surveyed throughout the month of May. Download the complete study at http://www.nfib.com/sbetindex.

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NFIB’s Small Business Economic Trends is a monthly survey of small-business owners’ plans and opinions. Decision makers at the federal, state and local levels actively monitor these reports, ensuring that the voice of small business is heard. The NFIB Research Foundation conducts some of the most comprehensive research of small-business issues in the nation. The National Federation of Independent Business is the nation’s leading small-business association. A nonprofit, nonpartisan organization founded in 1943, NFIB represents the consensus views of its members in Washington, D.C., and all 50 state capitals.

 

Filed Under: Economics, Press Release

NFIB to 11th Circuit: Individual Mandate Unconstitutional

June 8, 2011 By Leave a Comment

Atlanta, June 8, 2011— Karen Harned, executive director, National Federation of Independent Business (NFIB) Small Business Legal Center, and Mike Carvin, counsel to NFIB, issued the following statements after the oral arguments for the 11th Circuit:

“Today is a great day for small-business owners and for all Americans who believe in the individual right to determine the time and circumstances under which they will enter the health insurance marketplace,” said Karen Harned.

“NFIB and its co-plaintiffs challenged PPACA because it wrongly imposes a mandate to purchase insurance—Congress has no right to regulate inactivity by individuals who are not participating in commerce,” added Mike Carvin. “If Congress is allowed to regulate such inactivity simply because doing so will benefit other individuals who are voluntarily participating in commerce, then there will be no limits on the reach of federal power.”

Harned concluded: “We are confident that our side will ultimately prevail in this case; the arguments presented by our attorneys are grounded in the law. NFIB and its membership believe that the Court should strike down the health care law and that Congress should start over with health care reforms that will actually help small businesses, not walk all over them.”

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NFIB is the nation’s leading small business association, with offices in Washington, D.C., and all 50 state capitals. Founded in 1943 as a nonprofit, nonpartisan organization, NFIB gives small and independent business owners a voice in shaping the public policy issues that affect their business. NFIB’s powerful network of grassroots activists send their views directly to state and federal lawmakers through our unique member-only ballot, thus playing a critical role in supporting America’s free enterprise system. NFIB’s mission is to promote and protect the right of our members to own, operate and grow their businesses. More information is available online at www.NFIB.com/newsroom.

Filed Under: Constitutional Law, Federal Government, Health Care, Press Release, Uncategorized

Small Business’ Top 10 Arizona Legislative Victories in 2011

May 18, 2011 By 2 Comments

By Farrell Quinlan

The 50th Arizona Legislature has boldly staked its claim to being the most pro-small business legislature in Arizona’s history. With issue after issue, legislators advanced measures to relieve the tax and regulatory burdens on the engines of our economic recovery, Arizona’s small businesses.  Even in instances where lawmakers mistakenly pursued bad policy, they did so with the right motive in mind—creating more jobs.

Here are 2011’s top ten legislative victories for the small business:

  1. Broad-based Business Property Tax Relief – Passage of then-House Speaker Kirk Adams’ “jobs bill” (HB 2001) included historic business property tax relief that when fully implemented will mean a 28 percent reduction in the business property tax assessment ratio over the preceding decade. Our business property tax burden was the fourth highest in the nation back in 2006 when we began to lower the Class 1 assessment ratio from 25 percent. When the 18 percent Class 1 ratio is realized in 2016, Arizona’s business property tax burden will have settled into the low- to mid-20’s ranking among the 50 states. Truly historic. Moreover, Governor Brewer’s courageous veto of SB 1041 upheld the principle of broad-based business property tax relief over the allure of constitutionally-dubious schemes that pick winners over losers in the tax code.
  2. Corporate Income Tax Rate Cut – The “jobs bill” was so monumental this session; it easily earns the top two positions on this list of small business victories. HB 2001 also slashes Arizona’s corporate income tax rate 30 percent to 4.9 percent when it’s fully phased in by 2017. We should not discount the enormously positive signal this sends to out-of-state enterprises looking to relocate to more business-friendly states. Our corporate income tax and business property tax rates are no longer in question due to our protracted budget crisis. Instead, Prop. 108’s protection against tax increases effectively locks in not only stable and predictable rates—it locks in significantly lower rates. That’s the best economic development tool we could create to spur the strong, broad-based economic recovery that we are all looking to achieve.
  3. Health Savings Account Incentives – House Majority Leader Steve Court’s HB 2556 creates income tax credits for small businesses for the premium paid on a high deductable health plan and for contributions to employees’ health savings accounts. 
  4. Local ‘Bounty Hunter’ Audit Ban – Sen. Steve Yarbrough’s SB 1165 reverses the emerging trend of cities contracting with ‘bounty hunter’ auditors on a contingent fee basis to audit businesses collecting sales tax receipts.
  5. City & County Regulatory Bill of Rights – Sen. Lori Klein’s SB 1598 establishes a Regulatory Bill of Rights to ensure fair and open regulation by local governments.
  6. Union Preference Prohibition – Rep. Michelle Ugenti’s HB 2644 prohibits state entities, counties, cities and towns from accepting federal money for a construction project if accepting it requires them to give a preference to union labor.
  7. Employer Protections & Labor Relations – Sen. Frank Antenori’s SB 1363 restricts unlawful picketing, trespassing and defamation by labor unions against a business.
  8. Tax Closing Agreements Reform – Rep. Jack Harper’s HB 2202 enhances the criteria for declaring an ‘affected class’ for the purposes of determining whether an extensive misunderstanding or misapplication of Arizona tax laws has occurred—thereby allowing for the abatement of past tax liability, interest and penalties.
  9. IRS Conformity Policy – Rep. Harper’s HB 2332 waives any interest or penalties for unpaid tax liability due when the state fails to conform to revised definitions in the Internal Revenue Code in time for the taxpayer to accurately file their annual tax return.
  10. Civil Appeal Bond Limits – Sen. Al Melvin’s SB 1212 provides some relief for businesses in civil lawsuits by limiting the amount of the bond that must be posted against a judgment during the appeals process.

Though this list could go on listing other wins in areas like workers’ compensation reform and returning solvency to our unemployment insurance trust fund, it should be noted that the 2011 session included its share of disappointments.

Sen. Antenori’s SB 1322 would have required most municipal services in Phoenix and Tucson that cost more than $500,000 to go through an open and competitive bidding process. Sen. Nancy Barto’s SB 1593 would have allowed healthcare insurers from any of the 50 states to issue their policies in Arizona under the same coverage terms as in their home state. Unfortunately, both were vetoed by Governor Brewer. The Legislature also failed to act on a referendum to increase the exemption amount on the business personal property tax, a job-killing tax that punishes small businesses for reinvesting in machinery and equipment to grow their businesses.

Still, these setbacks cannot diminish the 50th Arizona Legislature’s overwhelmingly positive record on small business issues. The 7,500 Arizona members of the National Federation of Independent Business thank Governor Brewer and our lawmakers for this session’s impressive achievements on behalf of small business and look forward to building on them next year.

 – Farrell Quinlan is state director for the National Federation of Independent Business in Arizona (www.nfib.com/az). 

Click here to access the NFIB/Arizona Voting Record to see how your lawmakers voted on these and other bills.

Filed Under: Legislation Tagged With: , , , , , , , , , ,

NFIB’s Legislative Report Card Marks True Friends of Small Business

May 12, 2011 By 17 Comments

NFIB/Arizona’s 2011 Legislative Voting Record

Congratulations and thank you to the 11 of 90 Arizona lawmakers who scored a perfect 100% pro-small business voting record in 2011:

  • Senator Sylvia Allen (R-Snowflake LD5)
  • Representative Judy Burges (R-Skull Valley LD4)
  • Representative Heather Carter (R-Cave Creek LD7)
  • Senator Gail Griffin (R-Hereford LD25)
  • Representative Jack Harper (R-Surprise LD4)
  • Representative Steve Montenegro (R-Avondale LD12)
  • Senator Rick Murphy (R-Peoria LD9)
  • Representative Justin Olson (R-Mesa LD19)
  • Senate President Russell Pearce (R-Mesa LD18)
  • Representative David Smith (R-Carefree LD7)
  • Representative David Stevens (R-Sierra Vista LD25)

 

Press Release  

NFIB voting record considered Main Street’s gold-standard measurement

PHOENIX, Ariz., May 12, 2011—Arizona’s voice of small business, those Main Street enterprises that employ more workers and generate almost every new job, today issued its legislative report card on which state representatives and senators were its true friends.

In releasing its 2011 legislative Voting Record on the eve of National Small Business Week (May 16), NFIB, the state and nation’s leading small business association, graded legislators on their floor votes on 15 issues of maximum importance to Main Street, mom-and-pop enterprises.

“Though every legislator claims to be a friend of small business, our voting record provides a powerful tool for distinguishing between those who are pro-small business in deed from those who are only in word,” said NFIB/Arizona State Director Farrell Quinlan. “It’s easy for a lawmaker to pose for a photo at a small business back in their district and send out a nice press release commemorating Small Business Week, but it’s how a legislator presses that button on the floor of the House or Senate that’s ultimately the only meaningful way to gauge how high a priority voting with small business is to them.”

The Voting Record looked at the votes of all 60 members of the state house of representatives and 30 members of the state senate. Thirty-seven of 60 House members and 21 of 30 Senators scored 80 percent or better on the 15 issues, and an impressive seven House members and four Senators racked up perfect, 100-percent, pro-small-business voting records.

“The Voting Record does not reflect all elements considered by a lawmaker when voting, nor does it represent a complete profile of a legislator,” said Quinlan, “but it can be a guide in evaluating a legislator’s attitude toward small business.”

A brief description of all 15 bills and the voting records of each lawmaker can be found on the web at http://tiny.cc/2jn42. The record and more information about NFIB and small business can be found at www.nfib.com/arizona.

# # #

NFIB is the nation’s leading small business advocacy association, with offices in Washington, D.C. and all 50 state capitals. Founded in 1943 as a nonprofit, nonpartisan organization, NFIB gives small- and independent-business owners a voice in shaping the public policy issues that affect their business. NFIB’s powerful network of grassroots activists send their views directly to state and federal lawmakers through our unique member-only ballot, thus playing a critical role in supporting America’s free enterprise system.  

Filed Under: Legislation, Press Release, Voters Guide

NFIB Opposes SB 1041 as Bad Tax Policy, Likely to be Struck Down as Unconstitutional

April 6, 2011 By 7 Comments

The following letter was sent today by the National Federation of Independent Business (NFIB) to all members of the Arizona House of Representatives regarding major property tax legislation that has yet to receive the appropriate amount of attention in the press or from lawmakers.  NFIB joins the Arizona Tax Research Association, the Goldwater Institute, the Arizona Free Enterprise Club and Americans for Prosperity – Arizona in opposing this misguided legislation.  However, interests principally representing large, out-of-state-based businesses, have rallied to champion the bill including the Greater Phoenix Economic Council and Arizona Chamber of Commerce and Industry.  Click here to watch a ten-minute KAET-TV’s Horizon segment on SB 1041 featuring GPEC’s Barry Broome and NFIB’s Farrell Quinlan. 

Dear Representative:

The 7,500 Arizona small business members of the National Federation of Independent Business urge you to vote “NO” on SB 1041: Invest Arizona. This legislation clearly violates our long-held position against picking winners and losers in our tax code, threatens to undermine the property tax base in rural counties, shifts the property tax burden to homeowners and established businesses; and, perhaps most critically, creates a likely unconstitutional disparity between property taxpayers.

  • Winners vs. Losers: By definition, qualified businesses investing after enactment of SB 1041 will win a 75-percent-property-tax-forgiveness provision for ten years unlike the established businesses unlucky enough to have invested in Arizona before SB 1041’s enactment. Proponents blithely assert that established businesses may also take advantage of the 75-percent-property-tax-forgiveness provision if they meet SB 1041’s investment and jobs qualifiers—therefore, the Invest Arizona program doesn’t create a winners vs. losers situation. This line of thinking ignores the fact that established Arizona businesses have already made their principle investment in plant and property while taking a variety of defensive actions to survive the ongoing recession. Moreover, the vast majority of small businesses in Arizona didn’t make $5 million (or even $1 million) in capital investment in their enterprises while 88 percent of all Arizona businesses employ less than 25 workers. They are clearly losers under the Invest Arizona scheme.
  • Threatens Rural Tax Base: Many rural counties have relatively narrow property tax bases due to high levels of publicly-owned property. Any undermining of the property tax base, especially in the revenue-rich Class 1 commercial and industrial category, puts rural county, municipal and school district budgets and homeowners at risk. Because Invest Arizona’s 75-percent-property-tax-forgiveness provision is open to any business, enormous new mining or utility projects could overload a rural area’s capacity to provide the necessary infrastructure to support the new development.
  • Shifts Property Taxes to Homeowners and Established Businesses: Property taxes are levied to pay for certain county, municipal and school district infrastructure and maintenance and operation needs. There is a universally-held principle that development should pay for itself. Granting a Class 6 (5 percent) assessment ratio to Invest Arizona businesses means that the property tax burden is double for Class 3 homeowners (10 percent) and quadruple for Class 1 established businesses (20 percent). This is precisely the kind of shift that routinely hampers efforts to narrow the disparities between Class 1 business and Class 3 residential. What holds for Class 1 reductions surely must also apply to shifting businesses to Class 6 as SB 1041 would do.
  • Invest Arizona Scheme is Likely Unconstitutional: According to the Arizona Tax Research Association: “the Arizona Constitution under Article 9, Section 1, states that “all taxes shall be uniform upon the same class of property within the territorial limits of the authority levying the tax.” While the courts have given the Legislature broad discretion in creating different classes of property, they have also cautioned that those distinctions in use, purpose or industry must be “real” and not be “arbitrary, specious or fanciful.” In addition to being bad policy, ATRA believes that creating such disparate tax treatment between identical companies in the same taxing jurisdiction based solely on the timing and size of the investment is unconstitutional.” Also, 100 percent of NFIB’s 7,500 Arizona members are on the losing side of the SB 1041’s timing and size criteria thereby creating 7,500 potential plaintiffs for the inevitable constitutional challenge to the Invest Arizona scheme.

We fully endorse the approach taken in the recently enacted “jobs bill” (HB 2001) that lowered business’ property tax burden across the board regardless of when they arrived in Arizona or their size. SB 1041’s provisions run contrary to the jobs bill’s evenhanded approach and should be rejected not only because it’s bad tax policy but because it’s likely to be struck down as unconstitutional.

Thank you for considering our position when deciding how to vote on this terminally flawed piece of legislation.

Sincerely,

Farrell A. Quinlan, Arizona State Director, National Federation of Independent Business

Filed Under: Economic Development, Legislation, Taxation

Grassroots leaders push to reform city government

March 8, 2011 By 7 Comments

March 8, 2011
          
Hon. Russell Pearce
President
Arizona Senate
1700 W. Washington Street
Phoenix, AZ 85007

Hon. Kirk Adams
Speaker
Arizona House of Representatives
1700 W. Washington Street
Phoenix, AZ 85007

Re:  Municipal managed competition reform (SB 1322)

Dear President Pearce and Speaker Adams:

We are writing to you and to the members of your chambers to ask for your support in passing Senate Bill 1322, the municipal managed competition reform. 

SB 1322 would require Arizona cities with populations of 500,000 or more to open up city services to competition from the private sector.  The bill has three main policy objectives:

• Create jobs.  By requiring an open and competitive bidding process, SB 1322 will allow private businesses, public-private partnerships, and city employees to compete to provide services to city residents at the lowest prices compatible with the highest quality and most reliable performance.  Competitive bidding will help to moderate the costs of all productive factors, including labor, thus allowing thousands of new workers to be hired.  (For example, in Fiscal Year 2010, the City of Phoenix paid its average worker a salary, benefit, and overhead package of $97,707.  That was up from $83,231 in FY 2007—a 17-percent increase in just three short years, at a time when private-sector workers were suffering pay cuts and layoffs.  Even if we take out police officers and firefighters—who would be exempt from SB 1322—competitive labor costs could allow the Phoenix economy to employ one and a half times the current number of city workers, at the average private-sector salary-and-benefit level.) 

• Save money for city governments and city taxpayers.  By saving money on maintenance and operations costs, SB 1322 would free up scarce budget resources at a time when cities are facing tough budget constraints.  The combined savings in Phoenix and Tucson could soon be over $500 million a year—savings that could be passed on to taxpayers through rollback and repeal of recent tax and fee hikes.     

• Create opportunities for small business.  SB 1322 will help to inject hundreds of millions of dollars a year into the local economies in Phoenix and Tucson.  By requiring those cities to bid out services costing above $75,000, SB 1322 would create opportunities for dozens of small businesses to win contracts to perform city services. 

SB 1322 gives city councils opportunities to disapprove statements of work presented to those councils by city managers, and allows city councils to award longer-term contracts to independent contractors and public-private contractors that provide significant capital investments to the cities. 

SB 1322 includes several key protections for taxpayers and several provisions designed to ensure that contractors serve as faithful stewards of public resources:

• Transparency in bidding and performance.  SB 1322 stipulates that all bid-related communications and supporting materials submitted for consideration by the affected cities shall be public records, and mandates that the city managers and all city departments of affected cities shall conduct annual performance audits for contracted services, the cost of which must be accounted for and incorporated into all bids.  SB 1322 requires city managers of affected cities to seek independent performance audits every five years to evaluate the accuracy and completeness of the municipalities’ performance audits, and stipulates that all performance audits shall be public records.

• Protection of city resources.  SB 1322 requires that all bidders, public or private, must be able to provide bonding or other forms of security to adequately protect cities, and requires that all bidders maintain an adequate level of liability insurance consistent with the city risk management requirements.

• Public safety provisions.  SB 1322 requires that independent contractors have appropriate safety policies and procedures in place to protect the public and its employees, and requires that independent contractors perform background checks on employees performing any service for which the affected cities require background checks of municipal employees.

• Breach-of-contract protections.  SB 1322 mandates that independent contractors acknowledge that the affected cities may rightfully terminate and rescind contracts awarded to independent contractors in the event of material breaches of those contracts.

• Term limits for service contracts.  SB 1322 provides that service contracts may not have terms longer than five years, with three one-year renewals, before the related services must be submitted again to open and competitive bidding.

• Term limits for capitalization projects.  To address policy concerns voiced in committee, the proposed floor amendment to SB 1322 allows for longer terms to be awarded for contracts with independent contractors or public-private partnerships that involve significant capital investments.  But the proposed amendment also limits the terms of those contracts to the length of the amortization schedules prevailing in those industries.

Given the wide latitude allowed to city councils and city managers in designing service contracts, SB 1322 includes a taxpayer standing clause that allows taxpayers residing in the affected cities to bring special actions in court to enforce the protections afforded in the legislation.

Once the success of this managed competition reform has been demonstrated in Phoenix and Tucson, it is our firm hope that future Legislatures will expand the reform to include all of the municipalities and counties in Arizona, thus providing its protections to all Arizona taxpayers. 

Upon request, we will provide you with a copy of the draft floor amendment which incorporates changes suggested during the Senate committee hearings and changes suggested by stakeholders. 

Signed,

Sal DiCiccio     
Phoenix City Council     

Tom Jenney    
Americans for Prosperity – Arizona    

Lee Earle
Arizona 2012 Project

Steve Voeller    
Arizona Free Enterprise Club   

Vera Anderson   
Daisy Mountain Tea Party Patriots

Michael Davis
Deer Valley Tea Party

Farrell Quinlan       
National Federation of Independent Business – Arizona     

Wesley Harris
North Phoenix Tea Party

Honey Marques   
Tea Party Patriots of Scottsdale  

Marcus Huey    
Tea Party Patriots of Glendale

Shawnna L.M. Bolick
Grassroots Organizer

Filed Under: City Government, Government Reform, Legislation Tagged With: , , , , , , , , , , , , , ,

Arizona Legislature Must Act to Protect Employee Paychecks from Political Abuse

February 24, 2011 By Leave a Comment

The Arizona Senate is ready for floor debate on a ballot referral critically important to gaining lasting control over our state and local budgets — SCR 1028 on Paycheck Protection.  The below letter was delivered Wednesday to all Republican lawmakers.

 

Coalition to Protect
Employee Paychecks from Politics

February 23, 2011

The Honorable Russell Pearce
President of the Arizona Senate
1700 West Washington Street
Phoenix, Arizona 85007

The Honorable Kirk Adams
Speaker of the Arizona House of Representatives
1700 West Washington Street
Phoenix, Arizona 85007

RE: SCR 1028 & HCR 2032 on Paycheck Protection

Dear President Pearce and Speaker Adams:

The on-going protests in Madison, Wisconsin should sound the alarm here in Arizona regarding the danger of indulging special interests to the point where they threaten to close down state government and disrupt our political processes.  As representatives of conservative, grassroots and small business organizations, we urge you to take proactive steps to ensure that Arizona never becomes as beholden to these special interests as the Badger State has.

Therefore, we request that you use your considerable influence and institutional powers to give Arizonans the opportunity to vote to enshrine in the Arizona Constitution their fundamental right to protect employee paychecks from politics.

Senate Concurrent Resolution 1028, introduced by Senator Frank Antenori and 43 co-sponsors, and House Concurrent Resolution 2032, introduced by Representative Judy Burges and 44 co-sponsors, state: 

An employee in this state shall be free from any employer deducting or facilitating the deduction of a payment from an employee’s paycheck for political purposes, unless the employee annually provides express written permission to make the deduction.

The language is fair, reasonable and straight-forward—precisely the qualities of a constitutional amendment that the Arizona electorate rewards with their votes.  This referral does not discriminate between political money deducted by labor unions or corporate political action committees.  Both are treated equally.  Moreover, this construction places the focus where it belongs, on the fundamental rights of all workers to control their paychecks.

A 2010 poll of 400 likely Arizona voters found 76 percent favor such an amendment and 20 percent oppose.  The poll also found that 64 percent were “definitely yes” while only 14 percent were “definitely no” voters.

The time is now to seize the initiative and provide voters this opportunity to affirm their rights through a constitutional amendment.  We urge you to schedule a floor vote on a paycheck protection ballot question during the 2011 Regular Session so the conservative, grassroots and small business supporters of paycheck protection can use the full year-and-a-half between now and Election Day 2012 to organize, educate and raise the funds necessary to secure victory.

It is imperative that you help the conservative, grassroots and small business base by giving us enough time to wage an aggressive and well-financed effort.  The 2010 election cycle is illustrative of why we feel passing a referral in 2011 is essential to our ultimate success.  Propositions 106 (Healthcare Freedom), 107 (Civil Rights) and 113 (Save Our Secret Ballot) were all launched by referrals in 2009 and all won by comfortable margins.  Conversely, every constitutional amendment referred in 2010 failed, some by very narrow margins.

Constitutional Amendment   Constitutional Amendment
Campaigns Begun in 2009   Campaigns Begun in 2010
       
Prop. 106: Healthcare Freedom Prop. 109: Hunting & Fishing
Yes 892,693 55.28%   Yes 714,144 43.52%
No 722,300 44.72%   No 926,991 56.48%
  1,614,993       1,641,135  
             
        Prop. 110: State Trust Lands
Prop. 107: Civil Rights   Yes 792,394 49.71%
Yes 952,086 59.51%   No 801,670 50.29%
No 647,713 40.49%     1,594,064  
  1,599,799          
        Prop. 111: Lt. Governor
        Yes 655,252 40.77%
Prop. 113: Save Our Secret Ballot No 951,820 59.23%
Yes 978,109 60.46%     1,607,072  
No 639,692 39.54%        
  1,617,801     Prop. 112: Initiative Timeline
        Yes 792,697 50.00%
        No 792,825 50.00%
          1,585,522  

 

We know legislative leadership has traditionally held that ballot propositions are best referred in the year of the election.  However, as the protests in Madison, Wisconsin illustrate, the likely forces opposed to paycheck protection can and will always bring maximum resources to fight for their big government agenda regardless of notice.  Regrettably, the forces supporting a smaller government and individual responsibility are the ones that need time to organize and mobilize. 

We cannot afford to wait until less than six months before the election to decide to rise to this challenge.  Please give us the best chance to support and pass this crucial constitutional amendment that will serve as a foundation to regaining and maintaining Arizona’s fiscal health.

Please schedule floor votes on SCR 1028 and/or HCR 2032 during this session of the Arizona Legislature.

Thank you for considering our views. We would welcome the opportunity at your earliest convenience to discuss the merits of referring this measure to the ballot this year.

Sincerely:

Farrell Quinlan
Arizona State Director
National Federation of Independent Business
3550 North Central Avenue, Suite 1806
Phoenix, Arizona  85012

Tom Jenney
Arizona Director
Americans for Prosperity
One East Camelback Road, Suite 550
Phoenix, Arizona  85012

Roy Miller
Chairman
Arizona Employee Protection Committee
8912 East Pinnacle Peak Road, Suite F9-235
Scottsdale, Arizona  85255

Sydney Hay
President of AMIGOS
Arizona Mining Industry Gets Our Support
Post Office Box 25187
Phoenix, Arizona  85002-5187

cc:  All Members of the Republican Majority in the Arizona House of Representatives
       All Members of the Republican Majority in the Arizona Senate

Filed Under: Ballot Measures, Campaigns & Elections, Government Reform, Jobs/Labor, Legislation Tagged With: , , , , , , , ,
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