From Speaker of the House John Richardson

Small Business Update
Wednesday, December 14, 2005

In this issue...

• Report from the Belfast and Rockland Small Business Forums
• More small business forums to come

Report from the Belfast and Rockland Small Business Forums

We received excellent feedback last week at two small business forums – one on Monday, Dec. 5, in Belfast, and the other in Rockland on Wednesday, Dec. 7.

I want to thank Rep. Walter Ash of Belfast for inviting me to speak in his city. Twenty-eight people attended the Belfast forum, including representatives of several business associations or groups, and a lot of owners and operators of businesses with one to 20 and more employees.

In Rockland, 62 people attended at the invitation of Rep. Ed Mazurek, including lobstermen, fishermen, an accountant, self-employed creative people, contractors, and others. And we were especially honored to have Gov. John Baldacci in attendance for the first hour. He was able to answer some questions about Dirigo Choice, the state’s new health insurance plan aimed at insuring working families, the self-employed, and employees of small businesses.

Several people in the crowd spoke up to say that they have signed up for Dirigo either because they previously had no insurance, or because they had expensive plans with $5,000, $10,000, or even $15,000 deductibles and minimal coverage.

What we heard in Belfast

The tone was businesslike but informal at the Boat House on Front Street as more than two dozen business owners and others sat around a large table and shared their thoughts about the needs and challenges faced by small businesses.

In addition to myself and Rep. Ash, we were joined by three other legislators – Rep. Jeff Kaelin of Winterport, Rep. John Piotti of Unity, and Rep. Nancy Smith of Monmouth.

The concerns raised at the forum echoed what the Speaker has heard at other forums we have held – the high cost of health insurance, difficulty in getting information, and issues around workers compensation and liability insurance.

Mike Rauch said he’s had trouble getting information from the federal Small Business Administration. I put him in touch with Mary McAleney, who works at the Maine office in Augusta.

Several people spoke about the need for affordable health insurance for themselves or their employees. Andrew Cardinale, who runs At Work Personnel Services with six offices in the state, said MEMIC is making it impossible for him to get workers compensation insurance. “They’re not insuring who they don’t want to insure,” he said.

Mike Hurley, Belfast’s mayor, and owner of several businesses, said he wants the Legislature to reinstate the full 100 percent refund on the Business Equipment Tax. “It just aggravates me to pay taxes on the filing cabinet I bought 20 years ago,” he said.

But Hurley also said he’s tired of “hearing all the time that Maine is the worst. It’s a self-fulfilling prophecy.” He said Maine’s sales tax is low compared to other states, and does not agree with those who say the Legislature is not doing anything for small businesses.

I echoed Hurley’s concern. There are many indicators that Maine’s economy is doing well – rising per capita income, several studies showing that Maine has a low cost of doing business, and is a thriving market for small businesses.

We need to talk about what’s right with Maine. I mentioned that David Clough, the Maine director for the National Federation of Independent Businesses, commented earlier this year that the Small Business Initiative was the most promising agenda for small businesses in the Maine Legislature in 25 years.

I am aware we have 16 bills, and that will not shake the world. But for the first time in a long time, we’re putting small businesses on the radar screen in Augusta. From one end of the State House to the other, people are talking about it.

I support full reimbursement of the Business Equipment Tax, or even removing the property tax on business equipment altogether, and will have an opportunity to vote on that this session.

On workers compensation, I sympathize with Carinale, and I’ve asked him to contact my office. Maine has gone from the highest workers compensation costs in the country to 28th in just a few years, but we need to make sure that Maine businesses are getting the coverage they have a right to expect under the law.

John Van Inwagen, who runs the Belfast Coop, said his company has embraced Dirigo Choice, and has signed up 21 employees. But they are concerned that the negative attacks on Dirigo will force the program to close up.

“The employees are already saying, ‘Don’t throw it out before you give it a chance.’ Don’t just junk it and move on.“ I say that while Dirigo is not perfect, it is an excellent start on making affordable health care available for all Mainers. The answer is to continually improve it, not to throw it out.

The problem is there is a lack of federal effort on health care. The state is trying to make it up. Despite concerns about mandates on insurance companies, mandates add only 10 percent to the cost of insurance plans – about as much as the premiums rise each year.

Rockland Forum

We had a tremendous turnout in Rockland, and a number of state legislators also attended, including Rep. Nancy Smith of Monmouth, Rep. Hannah Pingree of North Haven, Rep. Lisa Miller of Somerville, Rep. Mazurek, and myself.

And, of course, we were honored to have Gov. John Baldacci in attendance for the first part of the forum.

People are concerned about the cost of health care, first and foremost, for themselves and for their employees. Several participants spoke about how they signed up for Dirigo Choice, the state-sponsored insurance plan for working families and the self-employed, because they were either uninsured, or had only minimal coverage with deductibles as high as $15,000.

Doug Curtis, an investment advisor in Rockland, said he tried to sign up his son for Dirigo, but was told Dirigo was accepting no new applicants for now. Gov. Baldacci explained that the first year of the program there was a limit on individuals signing up because there were only sufficient funds for a limited number. On Jan. 1, however, there will be no limit on individuals.

The Governor said the Dirigo program has been a huge success, bringing more than 8,000 people into health insurance, and reducing the cost for everyone by cutting charity care.

More than $300 million in medical expenses goes unpaid by people who cannot afford their hospital bills, Gov. Baldacci said. Hospitals pass the cost on to everyone else.

“That is a tax on your health insurance – a premium for the uninsured,” he said. That’s why getting people onto health care is so important. Already, Dirigo has saved Maine’s health care system $44 million, according to the state Insurance Superintendent.

Gov. Baldacci criticized the federal government for failing to show leadership on health care, and forcing Maine and other states to find solutions. “There has been no leadership from Congress on this issue,” he said. “This is a novel approach, we’re the only state in the nation doing this.”

Participants were interested in other issues besides health care, too.

One man said he retired from his job to help his sons get a carpentry business off the ground. He said carpenters should be required to be licensed because there are disreputable carpenters who undercut responsible ones, hurting consumers and acting as unfair competitors. I pointed out the Legislature is considering just such a bill in the coming session.

Pete Smith of Tenants Harbor, who has a patent for a specialized lobster trap, said he has found it difficult to get help – both technical and seed money – to market his invention. I pointed to the Maine Technology Institute and the Small Business Development Centers as agencies that assist people like Smith, and whose work is not well enough known by the public.

Concerns were also raised about the cost of commercial liability insurance. One businessman said insurance for his business jumped from $9,000 per year to $26,000 after a boat broke free from someone else’s property and did damage to his.

The conversation repeatedly moved back to health insurance costs. Several people said they could not afford Dirigo, even though it offers far more comprehensive coverage for about the same cost as catastrophic plans with high deductibles.

The Governor acknowledged “Dirigo is not for everybody.” But he and I said it is a huge step in the right direction, and that the Legislature will continue to make improvements.

The Governor and the Legislature have done a good job reducing a massive budgetary shortfall by 75 percent in three years, while adding $250 million to local education to help reduce the growth of property taxes.

The Governor inherited a $1.2 billion shortfall. He said,we’re not going to raise broad-based taxes to cover it, we’re going to let incomes grow. And I support him in that.

I will remember all of those comments, and others that we heard that evening, as we look to improve upon our Small Business Initiative, and consider new legislation to continue fostering small business growth in Maine.

I hope you will follow the progress of the Initiative, and contact your state representatives about these bills to offer your support.

You can find more information about the Small Business Initiative, its history and legislation, at: www.speaker.maine.gov/business.

More Small Business Forums to come

These meetings are incredibly valuable to me and other legislators because we are able to hear first-hand what the people in the small business world are thinking about and concerned about.

The Rockland forum was our third this year, and I plan to hold four to six more in January and February. I will send an update with the dates and locations as soon as I have them.

Visit the SBI web site

Visit the SBI web site.

Participating in the legislative process

The bills in this package have already had their public hearings, but the ones that were carried over may still come up for discussion in workshop sessions. Be sure to contact your own legislator, or the members of the appropriate committees. You can find a list of committee members here or contact us in the Speaker's Office if you need help finding the right people.

You have a right and a responsibility to make your voice heard in Augusta!

Testifying or submitting written testimony
Click here to learn more about testifying on a bill or submitting written testimony.

Contacting your legislator
Be sure to contact your legislator about small business legislation and let them know your opinion and suggestions.

Click here to find your local state representative or senator.

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