How overarching trends are affecting small business owners at the state level.
The November 2018 elections saw several states lose pro-business incumbents, majorities in their legislatures, and governors’ seats.
“With that, there has been a rush toward a more anti-business environment,” says Gary Selvy, NFIB’s Executive Director of State Government Relations. “Efforts to increase minimum wage, implement mandated paid leave, increase taxes and regulations, and roll back positive tort reform were pushed through earlier this year. “
Here’s a look at how five key small business issues are playing out across states.
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1. Plastic Bans
Many states have moved to prohibit single-use plastics. In Massachusetts, for example, roughly one-third of localities already have plastic bag bans in place, but the legislature is also considering a statewide ban. Several straw ban bills have also been drafted, but none have advanced to committee.
Chris Carlozzi, NFIB’s Massachusetts and Rhode Island State Director, testified against these efforts, arguing that they increase operating costs for businesses while failing to have an appreciably positive environmental impact.
2. Local Overreach
More municipalities and local governments are circumventing state legislatures to pass ordinances that raise the minimum wage, implement mandated paid leave, require predictive scheduling, or impose other labor mandates.
In some cases, states have used preemptive legislation to block these efforts. For example, North Dakota’s legislature passed two bills this session that prohibited cities and counties from imposing a higher minimum wage than the state.
Colorado’s legislature, however, removed the prohibition on local governments setting their own minimum wage. State Director Tony Gagliardi says the new law will create a patchwork of different minimum wage rates across the state, making compliance difficult for small businesses.
3. Initiative and Referendum Misuse
After facing defeat through the legislative process, a growing number of interest groups are using state initiative and referendum laws to push policies by public vote. As a result, some state legislatures are forced to take action on these policies before they are placed on the ballot.
In Michigan, NFIB State Director Charles Owens says proposals put forth by progressive labor groups consistently seek to impose unaffordable mandates on small businesses.
Michigan allows citizens to use the petition process to amend the Constitution and initiate or reject legislation, Owens says, but “it’s unlikely that the framers of the 1963 Constitution ever imagined that the collection of signatures to put a proposal before voters would become a lucrative business enterprise where professional signature-gathering companies would offer to collect all the signatures needed for a fee.”
This process is legal and commonplace among all groups, Owens adds, but it’s disingenuous to claim these are grassroots efforts representing the people’s will.
RELATED: Stay informed on state issues with the NFIB Advocacy Center.
4. State Personal Income Tax Reform
The Tax Cuts and Jobs Act of 2017 has been the primary driver of small business optimism and tax relief. Many states have conformed their personal income tax laws to the Federal Small Business Deduction (199a), which allows pass-through businesses to claim a 20 percent deduction on their business income and reduce their overall tax burden.
5. Climate Change Legislation
In New York, Gov. Andrew Cuomo signed a new law mandating that all of the state’s electrical generation come from renewable sources by 2040 and that greenhouse gas emissions drop by 85 percent from 1990 levels by 2050. While Gov. Cuomo compromised from the original zero emissions, NFIB’s New York State Director Greg Biryla says small businesses remain concerned about increased energy costs and the significant expense of replacing or retrofitting buildings, vehicles, and equipment to comply with these targets.
To learn more about which trends and issues are affecting your state, visit NFIB.com/Advocacy/Choose-Your-State.
