From Speaker of the House John Richardson

Small Business Update
Wednesday, February 22, 2006

In this issue...

• Wrap-up of the Gorham and Freeport forums
• One more chance to let your voice be heard

Report from the Gorham and Freeport forums

Gorham

I want to thank Rep. David Farrington of Gorham for inviting me to his town for the small business forum, and I was glad we were also joined by Rep. Chris Barstow, and Sen. Phil Bartlett.

It’s meetings like these that remind me again and again that small business is the heart and soul of Maine. That’s not just a slogan, it’s borne out by the statistics. Most businesses in Maine are small businesses, and most people work for small businesses.

We got right down to it, and were able to talk about legislation that passed as part of the Small Business Initiative to create an Office of Small Business and Entrepreneurship. But I still would like to see that function moved to the Governor’s office. When somebody with the title Small Business Advocate calls and says they are from the Governor’s office, that carries some clout, and that is the stature to which we need to raise this position. This advocate will be able to intercede on behalf of small businesses and cut through the red tape when things need to get done.

Rep. Farrington spoke about a few of the bills that have come through his committee – the Business, Research and Economic Development Committee. Among them was a bill that originally would create a 3-1-1 number for people to call in from anywhere in the state to get the anwers to questions about business assistance, regulations, permitting, or any other business-related question. While that did not go through as written, Rep. Farrington explained that the Department of Economic and Community Development is in the process of expanding its highly successful Business Answers line, adding hours of operation, and improving the marketing of it so business owners will know about it.

Sean Moulton asked why Anthem is the only company in the health insurance business in Maine. Dan Havu, said the state needs more competition in health insurance in order to generate products that will work for Mainers.

One participant asked about high risk pools, and why it costs so much more for health insurance in Maine than in New Hampshire. As I pointed out, that’s not the case in all situations. For a healthy 25 year old, insurance might be less expensive in New Hampshire. But that less expensive plan does not do a pregnant woman any good if it does not include maternity care, for example. For many people, Maine’s insurance is far more comprehensive, and provides what they need.

There was some discussion of state government spending, and Rep. Barstow was able to point out that we have reduced the number of state employees in the past three years, and consolidated many services. While taxes remain high in Maine, they are coming down compared to the national average, and recent reports show that the tax-reduction law passed by the Legislature last year is already having a significant impact on the rise of local property taxes.

Freeport

We had a lively discussion with business owners in the Freeport Community Library, Wednesday evening. We usually schedule the Small Business Initiative Forums for an hour and half. This exchange of ideas would not be restricted by time! Special thanks to Representative David Webster for hosting this successful gathering.

After introductions, the mantra of the evening became evident early on as less regulations and less taxes. This sentiment coupled with the concerns over growing healthcare costs was in line with the previous 12 small business forums.

From this initial point of discussion, the conversation turned to the revenue side. Elizabeth Guffey, owner of Daedalus Design Group, spoke about how hard it is for small Maine businesses to complete the paperwork for government contracts. Guffey suggested going “beyond notification and offer trainings on how to apply. Better yet, simplify the process and reduce the hurdles for bidding.”

When I became Majority Leader two years ago I thought the same thing. I considered giving preference to Maine companies for Maine state contracts. Then I quickly was made aware that this approach would ultimately leave our Maine companies vulnerable. There is an extremely good chance that other states would restrict their contract regulations in retaliation of such preference. We did agree that there is opportunity to simplify the bidding process.

“What can we do to foster the entrepreneurial spirit,” asked Steve Brown, owner of Brown Goldsmiths & Co. “The spirit of small business is based on excitement and innovation.”

We discussed the cultural obstacles that exist. I discovered this when I spoke with the president of the community college system a few years ago about an entrepreneurial curriculum. A survey to recent college graduates revealed 50 percent of them wanted to run their own businesses and yet there was no curriculum available to foster this desire. So, I have advocated to the Department of Education for a K-12 entrepreneurial curriculum and submitted a bill that would require it. That bill has passed the House and Senate, but is awaiting funding, which is in short supply.

Ryan Doherty, owner of Cheep Up Inc., acknowledged that his business of selling alcohol and cigarettes are in the “sin business.” He said there are five or six new licenses he has to have each year to sell cigarettes. He understood that the $1 increase to the cost of a pack of cigarettes was in direct relation to the cost of health care related costs. “Where do you stop? Do you start taxing chocolate because it is fattening and has health-related complications?”

Doherty’s fear was a tax on alcohol. “As long as these items are legal, why are they taxed so highly?”

I reassured him there are no plans to increase the tax on alcohol. I mentioned that I was disturbed that the cigarette tax was regressive, which means the people who can least afford the tax were most impacted.

Doherty also noted that he cannot compete with big box stores that can negotiate prices on cigarettes or alcohol because they buy bulk. There is an unfair competitive advantage that a small shop like his cannot bridge.

We talked about a task force to help small business deal with this dynamic. I pointed out there are resources available, such as Maine Small Business Development Centers, to work with individual companies. I did suggest that there are tax benefits to developing a purchasing co-op. Vermont is a good example of how to collectively gain purchasing power.

“Agriculture must be considered as an economic development force throughout the state,” said Lisa Turner from Laughing Stock Farm. Turner also asked about how long- term investments are evaluated. For example, she questioned the evaluation of funds allocated by the Department of Economic and Community Development.

I agreed. I have always supported an evaluative component to programs that were bonded. This has been a part of the funding requirements.

Harold Nickerson of Nickerson Trucking in Topsham complained about the cost of worker’s comp. Although Nickerson’s business is in a high risk category, his company has a clean record. Despite this, his rates made a substantial jump in this last year. He said that it seems like he is paying double coverage by paying for health care benefits and paying high costs of workers’ compensation.

Nickerson’s dilemma struck home for me. In small businesses, often times employees are like family. When an accident occurs that relationship can turn adversarial. I referred to a program that is starting to catch on. It is called “24 Hour Coverage” and it works to balance the benefits of health care coverage with workers’ comp benefits.

I plan to work with Mr. Nickerson to help resolve his concern over the hike in his workers’ comp costs.

Catherine and Tom Wilbur of Wilbur’s Chocolates questioned the additional costs of having to involve architect in all construction no matter how small. This additional cost is an obstacle to expansion plans. They mentioned how expensive it is to pay unemployment for high school students. And, they pointed out the MDOT construction delays cost communities money. They estimated that 10 percent of their business was lost due to construction delays along Route 1.

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. The Consumer and Commercial Court is part of the Governor's supplemental budget, which is being considered in Appropriations. 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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