Part of our October series on Jobs & The Economy, featuring written op-ed pieces and Q&As with Delaware’s business, labor and government leaders.
Delaware’s latest unemployment figure (of 8.1% in August) does not inspire much confidence as it continues to show that our economy, at best, is stalled and, at worst, headed for greater troubles.
With the unemployment rate lingering around 8% for, at least, the past two years, I have become more convinced of our state’s need to jumpstart the economy by creating jobs through regulatory flexibility, reduced tax burdens and improved relationships with Delaware lending institutions. The recommended solutions to spur job growth are not rocket science. It takes minimal effort to implement what I believe are simply common-sense measures for helping our current and future small business owners in our state. It comes down to whether Delaware decision makers have the political will to do what needs to be done for our economy.
I stand ready to fight for three main proposals that I believe will help get our state’s economy back on track:
Reduce the tax and regulatory burdens, which are strangling Delaware businesses. In addition to offering greater tax relief by lowering the Gross Receipts Tax, I believe small businesses need the regulatory flexibility to thrive. One bill (House Bill 54), known as the “Regulatory Flexibility Act,” is intended to help relieve the regulatory burden on the small business community. Based on model legislation and patterned after the federal Regulatory Flexibility Act, the measure would require state agencies to publish an economic impact study with proposed regulations. Officials would use the information to consider the costs of such regulations on small businesses and the feasibility of exemptions or less stringent compliance or reporting requirements. The bill passed the House, but remains pending in a Senate committee.
Complimentary to House Bill 54 is legislation requiring state agencies to publish an impact statement as part of their proposed regulatory changes. Among other things, the statement would need to state the purpose of the rule or regulation and who would be subject to comply with it; how those being regulated could obey it; the potential short-term and long-term costs of that compliance; the means by which the rule or regulation would be enforced and its costs; and the public benefit resulting from the rule or regulation change. The legislation remains pending in a House committee.
Enhance businesses’ ability to obtain loan funding through local lending institutions. When the economy started to unravel in 2007 and the number of foreclosures skyrocketed, greater oversight of banks went into effect and lending to small businesses dropped off significantly. But, without financial capital, small businesses can’t survive, let alone grow. As a member of the House of Representatives’ Small Business Caucus, I am proud that this issue has been important to the Caucus members from the beginning. Many of us see the need to work with our Congressional delegation to ensure there is a proper balance between appropriate regulation, oversight of banks and an increase in access to financial assistance for small businesses. We also should encourage lenders to take advantage of an initiative offered by the U.S. Small Business Administration (SBA). The SBA can assist banks to work in a more streamlined partnership with small business owners, resulting in a cost effective solution for lending. The partnership helps to mitigate the risks for the lender, while providing the financing that small businesses need to preserve jobs and enhance growth.
Provide incentives through tax breaks to those Delaware businesses that buy local products. Local consumerism begets more local consumerism. The state should not be exempt from this requirement, either. Our state government should also stay loyal to Delaware companies and support them by buying their local products and services. Government can start by facilitating a statewide initiative that interconnects the state’s need for products and services with opportunities being provided by our small business community.
I have been a small business employer for all of my adult life and I take great pride in what I have done to help support our state and local economies over the past 30+ years. I understand fully that small businesses are the backbone of our state’s economy. In fact, data shows that 80% of Delaware companies have fewer than 20 employees. With statistics like that, it’s our duty, as policymakers, to put this sector at the top of our priority list.
Charles Schwab, founder and chairman of the Charles Schwab Corporation, recently stated in the Wall Street Journal (September 28, 2011) that an economic recovery comes from giving businesses the ability to create jobs. This, he said, can only be done by knocking down “all hurdles that create disincentives for investment in business.” He then challenged political leaders to put proposed laws and regulations “to a simple test: What will this do to encourage businesses and entrepreneurs to invest? What will it do for jobs?” The test may be simple, but, unfortunately, still a long way from actually happening in Delaware.
Rep. Mike Ramone (R-Middle Run Valley) represents the 21st District in the Delaware House of Representatives.