Top 5 Small Business Issues in the Texas Legislature

Date: April 04, 2019

NFIB is Texas’ leading small business advocacy organization. Unlike other business groups, NFIB doesn’t have a board of directors that sets our legislative agenda. Our positions are based solely on a consensus of our members. We ballot our members at least once a year on state and federal issues and don’t take a position unless a large majority of them agree. According to the latest state ballot, our members’ top priorities heading into the 86th session of the Texas Legislature are:

Property tax and franchise tax relief and reform

2015 was the last year the legislature passed any sort of tax relief for homeowners and business owners in Texas, with the promise that the franchise tax would ultimately be phased out, and the property tax system in Texas would be reformed to help stop the growth of the property tax burden and add in more transparency. Small business owners in Texas are being taxed out of their businesses (and homes) and are often hit even harder than a large business because they do not have in-house tax compliance officers.

Their margins of operation are very thin, leaving little to no room to keep their doors open after paying their property tax bill, their inventory tax, and their franchise tax bill (paid whether they made a profit for the year or not). Small business owners will continue to ask the legislature to fully repeal the onerous franchise tax, and at the least, to pass another rate reduction.

NFIB will support fixing the school finance crises in Texas and easing the reliance on the property tax by capping revenue increases locally and allowing tax rates to decline while property values increase.

Reeling in regulatory overreach

Increasingly, cities in Texas have been pressured by out-of-state labor unions to expand their regulatory scope by passing local ordinances regulating a private business owner’s employment practices. These city ordinances would mandate what kind of benefits an employer offers, how to handle their employee scheduling, and would interfere with private employment hiring practices among other business daily operations best left up to the employer.

Small businesses already implement hundreds of federal and state regulations, which costs them 36% more than a larger business according to the U.S. Small Business Administration. Now, cities are creating more employment and labor regulations locally, which in most cases differ from the set of standards set by federal or state government. These local ordinances create a patchwork of laws which makes compliance almost impossible for the small business owner.

This session, NFIB is spearheading the effort at the Capitol to fight this overreach. Along with 17 other business organizations, we have formed the coalition ASSET—Alliance for Securing and Strengthening the Economy in Texas—to preempt cities from passing ordinances that interfer with private employment practices.

Labor union transparency

The Texas economy has thrived in part because it remains a right-to-work state, free of forced unionism. However, union activity has grown in Texas while it’s declined in other states.

Currently, state and local governmental bodies in Texas automatically deduct money from public employee paychecks to pay directly to the union in the form of union membership dues. This has been the main funding source for public sector labor unions to the tune of hundreds of millions of dollars just in the last decade, used for their lobbying and political activity. Not only has this given these politically driven labor unions a leg-up over small businesses in Texas, but because of a loophole in the law for public sector unions, they have no reporting and disclosure requirements.

Union policies encourage the government to control small businesses by taking their business operational decisions away from them and by piling on costly mandates.

NFIB will pursue legislation that prohibits the government from collecting money for public sector labor unions, making them an appropriate neutral party. NFIB will also pursue legislation that requires public sector labor unions to report and disclose their financial reports with the Texas Ethics Commission.

Costly health insurance mandates

In a survey of NFIB’s members in 2016, the cost of health insurance was ranked the number one biggest problem and priority for small business owners in Texas. This remains a perennial issue for small business owners. Adding new, expensive mandates to health benefit plans increases the costs for businesses and employers and adds to the growing number of uninsured in Texas.

Employers ultimately pay the high price for mandated healthcare benefits through higher healthcare premiums, co-pays, reduced wages, and benefit reductions. Most large businesses receive their healthcare benefits under self-funded arrangements, which are preempted under ERISA and are exempted from state law. Thus, health benefit mandates more negatively affect small employer and individual policies.

Many mandates, including the half dozen or so passed during the past few legislative sessions, are estimated to increase premiums by millions of dollars. In fact, each mandate increases the cost of health insurance premiums by approximately one to five percent. While this may seem insignificant, every one percent increase in premiums costs consumers and employers an estimated $230 million a year in the fully insured market. In the end, mandates can hurt the very people that they were meant to help – individual employees and their families.

NFIB will oppose any legislation that continues to drive the cost of health insurance up or penalizes a small business owner for not carrying health insurance.

Workforce development

Finding skilled workers, or “lack of a skilled workforce” has been an ongoing issue for employers in this state, both large and small.

Texas’ small business job creators in the industrial and technical fields have positions open and ready to fill, but because we’re just beginning to build upon the work the legislature has done in recent years to create skills training in schools, those employers find themselves unable to expand in some cases.

However, the legislature has made strides in realizing the importance of trade skills training in junior high and high school, charging the Texas Workforce Commission, Texas Education Agency, and the Texas Higher Education Coordinating Board to work together along with employers in the state to complete the mission of graduating more students into the workforce.

NFIB will continue to work with other business organizations to make sure skills training in schools is a priority and our Texas workforce is robust for generations to come.



Help NFIB shape better policies for small business

We want to know how taxes, healthcare and regulations affect how you, your employees, and your business. Sharing that information with key influencers, including elected officials is essential as we work with you to advocate for better small business policies.

Share at or email [email protected]

Related Content: Issues | Regulations | Texas

Subscribe For Free News And Tips

Enter your email to get FREE small business insights. Learn more

Get to know NFIB

NFIB is a member-driven organization advocating on behalf of small and independent businesses nationwide.

Learn More

Or call us today

© 2001 - 2020 National Federation of Independent Business. All Rights Reserved. Terms and Conditions | Privacy