Release Date: 12/ 01/ 2005
CONTACT: Michelle Bolton, (602) 263-7690 Tony Malandra, (415) 664-9685
Response to health-care question could provide returning state legislators food for thought
PHOENIX – The Arizona economy has weathered whatever ill effects Katrina and other natural disasters were supposed to have on it, according to the latest quarterly survey released today by the nation’s largest small-business advocacy group, the National Federation of Independent Business. But a response to a first-time question could provide lawmakers returning to the state capitol next month with some food for thought on the issue of health care.
As with all previous quarterly surveys, the first question asked of Arizona small-business owners is how supportive the state’s business environment has been for them. The business environment includes government officials, bankers, media and community organizations. While the net-support rate dropped a statistically negligible 5 percent, other key indicators saw increases. Main Street business owners report sales are “very good” and sales prospects for the next three months jumping by nearly 8 percentage points. “What stood out in this report were two new questions we asked this time around on health care,” said Michelle Bolton, state director for the 10,000-member NFIB/Arizona.
When asked what their percent increase per employee for health insurance was, 10 percent said the cost was the same as last year’s; 19 percent reported a 10 percent to 24 percent increase; 5 percent reported jumps of between 25 percent and 49 percent; and 2 percent saw their health-care premiums spike over 50 percent. Nearly 34 percent of small-business owners reported having no insurance at all; 23 percent didn’t know; and 1 percent had no point comparison to make.
When asked their primary response to increases in their health-insurance premiums, 45 percent of small-business owners – making this one of the key distinctions between them and large corporations – absorbed the cost without getting it back somewhere else; 13 percent passed the costs on to their employees, including higher deductibles; 8 percent eliminated health care altogether; and nearly 5 percent reduced benefit levels. The remaining 29 percent didn’t know or respond to the question.
“Small-business owners are in dire need of some flexibility in purchasing health care for their employees,” commented Bolton. “Unlike larger businesses, Main Street owners know their employees and their families by name. It kills them not to be able to provide health care, but too often it’s a choice between that and remaining solvent. What lawmakers can do when they return to business next month is allow insurers to sell a variety of plans, including some that are stripped of a lot of costly mandates. The state-owned Health Care Group is allowed to do this; why can’t private insurers?”
###
NFIB’s Arizona Small-Business ConditionsSM is a telephone survey of a random sample of Arizona small employers regarding business conditions within the state. “Small employer” is defined here as employing between one and 250 people (not including the owner(s)) in a for-profit business. Each edition of the survey has a minimum of 350 respondents. The sampling error is ± 5 percentage points. Data are collected quarterly in the months of February, May, August and November. The MRCGroup of Las Vegas conducts the survey for the NFIB Research Foundation. The text of the questions and the complete response set to the survey can be found at www.NFIB.com/research.
| Arizona Small-Business ConditionsSM | ||||||
| This chart shows the results from Arizona and its comparative standing among selected nearby states. | ||||||
| Ariz. | Calif. | Colo. | ||||
| Business Climate | Survey Date | |||||
| Overall state business environment | ||||||
| Net % supportive of small business | 11/2005 | 31 | 4 | 33 | ||
| Prior qtr. | 36 | 6 | 28 | |||
| Business conditions in market area | ||||||
| Net % "good" | 11/2005 | 59 | 41 | 42 | ||
| Prior qtr. | 63 | 48 | 44 | |||
| Net % "improving" | 11/2005 | 28 | 10 | 10 | ||
| Prior qtr. | 30 | 17 | 20 | |||
| Outlook for business | ||||||
| Net % "good" in next three months | 11/2005 | 73 | 59 | 59 | ||
| Prior qtr. | 76 | 67 | 64 | |||
| Reason for optimism | ||||||
| % Sales prospects | 11/2005 | 46 | 42 | 43 | ||
| Prior qtr. | 38 | 42 | 44 | |||
| % Lower costs | 11/2005 | 2 | 6 | 4 | ||
| Prior qtr. | 3 | 3 | 1 | |||
| % Price increases | 11/2005 | 4 | 5 | 4 | ||
| Prior qtr. | 5 | 3 | 3 | |||
| % Greater productivity | 11/2005 | 15 | 17 | 17 | ||
| Prior qtr. | 13 | 16 | 10 | |||
| % Government policy | 11/2005 | 3 | 5 | 5 | ||
| Prior qtr. | 3 | 4 | 4 | |||
| % Seasonal/Weather | 11/2005 | 12 | 9 | 10 | ||
| Prior qtr. | 11 | 9 | 11 | |||
| Reason for pessimism | ||||||
| % Sales prospects | 11/2005 | IC* | IC | IC | ||
| Prior qtr. | IC | IC | IC | |||
| % Cost increases | 11/2005 | IC | IC | IC | ||
| Prior qtr. | IC | IC | IC | |||
| % Pressure on selling prices | 11/2005 | IC | IC | IC | ||
| Prior qtr. | IC | IC | IC | |||
| % Lower productivity | 11/2005 | IC | IC | IC | ||
| Prior qtr. | IC | IC | IC | |||
| % Government policy | 11/2005 | IC | IC | IC | ||
| Prior qtr. | IC | IC | IC | |||
| Ariz. | Calif. | Colo. | ||||
| Sales and earnings (last quarter) | ||||||
| Sales | ||||||
| Net % sales "good" | 11/2005 | 62 | 43 | 45 | ||
| Prior qtr. | 60 | 51 | 52 | |||
| Profits | ||||||
| Net % profits "good" | 11/2005 | 44 | 30 | 24 | ||
| Prior qtr. | 46 | 33 | 33 | |||
| Employment | ||||||
| Current job openings (one or more) | ||||||
| % "Yes" | 11/2005 | 31 | 19 | 19 | ||
| Prior qtr. | 29 | 26 | 19 | |||
| Per employee payroll cost | ||||||
| Net % "risen" | 11/2005 | 17 | 17 | 17 | ||
| Prior qtr. | 20 | 15 | 12 | |||
| Employee cost pressures (greater) | ||||||
| % Wages | 11/2005 | 60 | 52 | 56 | ||
| Prior qtr. | 55 | 51 | 56 | |||
| % Benefits | 11/2005 | 25 | 26 | 26 | ||
| Prior qtr. | 23 | 25 | 22 | |||
| Ariz. | Calif. | Colo. | ||||
| Productivity | ||||||
| Upgraded technology/processes (last three months) | ||||||
| % "Yes" | 11/2005 | 47 | 46 | 50 | ||
| Prior qtr. | 43 | 45 | 42 | |||
| Made capital expenditure(s) (last three months) | ||||||
| % "Yes" | 11/2005 | 45 | 39 | 48 | ||
| Prior qtr. | 43 | 45 | 39 | |||
| Made expenditure to train employee(s) (last three months) | ||||||
| % "Yes" | 11/2005 | 48 | 39 | 46 | ||
| Prior qtr. | 43 | 43 | 41 | |||
| Capacity utilization - can increase sales 10% without new inputs | ||||||
| % "Yes" | 11/2005 | 59 | 53 | 53 | ||
| Prior qtr. | 63 | 53 | 52 | |||
| Credit availability (last three months) | ||||||
| % All credit needs satisfied | 11/2005 | 35 | 37 | 39 | ||
| Prior qtr. | 41 | 37 | 37 | |||
| % All credit needs not satisfied | 11/2005 | 7 | 8 | 3 | ||
| Prior qtr. | 4 | 5 | 5 | |||
| % No credit needs | 11/2005 | 54 | 49 | 55 | ||
| Prior qtr. | 50 | 52 | 49 | |||
| Ariz. | Calif. | Colo. | ||||
| Prices | ||||||
| Purchasing prices (last three months) | ||||||
| Net % increased | 11/2005 | 58 | 55 | 59 | ||
| Prior qtr. | 49 | 50 | 50 | |||
| Selling prices (last three months) | ||||||
| Net % increased | 11/2005 | 21 | 20 | 21 | ||
| Prior qtr. | 16 | 17 | 17 | |||
| Miscellaneous | ||||||
| Involvement in start of another business | ||||||
| % "Yes" | 11/2005 | 13 | 13 | 14 | ||
| Prior qtr. | 12 | 12 | 10 | |||
| Single most important business problem | ||||||
| % Weak sales | 11/2005 | 9 | 9 | 8 | ||
| Prior qtr. | 8 | 9 | 7 | |||
| % Taxes | 11/2005 | 9 | 11 | 10 | ||
| Prior qtr. | 7 | 9 | 11 | |||
| % Employee quality/costs | 11/2005 | 17 | 10 | 9 | ||
| Prior qtr. | 15 | 10 | 11 | |||
| % Insurance | 11/2005 | 16 | 13 | 14 | ||
| Prior qtr. | 12 | 19 | 16 | |||
| % Big-business competition | 11/2005 | 9 | 16 | 13 | ||
| Prior qtr. | 15 | 15 | 16 | |||
| % Inflation/Rising prices | 11/2005 | 15 | 13 | 19 | ||
| Prior qtr. | 14 | 13 | 13 | |||
| % Credit availability/Interest rates | 11/2005 | 3 | 3 | 5 | ||
| Prior qtr. | 3 | 3 | 3 | |||
| % Regulations/Red tape | 11/2005 | 9 | 8 | 6 | ||
| Prior qtr. | 7 | 9 | 5 | |||
| Arizona Quarterly Spotlight | |
| What was the proposed percent increase in your PER employee health insurance premium at your last renewal? | |
| Don't have employee health insurance | 34% |
| About the same as the prior period | 10% |
| 10%-24% increase | 19% |
| 25%-49% increase | 5% |
| 50% increase or more | 2% |
| First year for insurance; no point for comparison | 1% |
| Don't know/Refused | 28% |
| Total | 100% |
| What was your most important response to this increase? | |
| Increased employee cost-share, including higher deductibles | 13% |
| Reduced benefits levels | 5% |
| Eliminated employee health insurance | 8% |
| Nothing | 45% |
| Don't know/Refused | 26% |
| Something else | 3% |
| Total | 100% |
The Poll
NFIB’s Arizona Small-Business ConditionsSM is a telephone survey of a random sample of Arizona small employers regarding business conditions within the state. “Small employer” is defined here as employing between one and 250 people (not including the owner(s)) in a for-profit business. Each edition of the survey has a minimum of 350 respondents. The sampling error is ± 5 percentage points. Data are collected quarterly in the months of February, May, August and November, beginning in February 2005. The MRCGroup of Las Vegas conducts the survey for the NFIB Research Foundation.
The Sponsor
The NFIB Research Foundation is a 501 (c)(3) organization that provides policy-makers, media, educators, small-business owners and other interested parties empirically based information on small business and small-business owners. The Foundation is affiliated with the National Federation of Independent Business, the nation’s largest small- and independent-business advocacy organization, and is located in Washington, D.C.
