NFIB went into the 86th Legislative Session with five main priorities:
- Property tax and franchise tax relief and reform.
- Regulatory overreach.
- Union transparency.
- Health insurance mandates and costs.
- Workforce development.
Lawmakers addressed these issues in one form or another, but challenges still lie ahead for the small business community.
Here’s a look at how small business fared in this year’s legislative session:
Property Tax & Franchise Tax Relief and Reform
With the support of NFIB and a call to action by our members, the legislature passed “The Texas Plan”—a combination of school finance reform and property tax reform.
This transformative and comprehensive plan will ultimately lead to over $5 billion in property tax relief for homeowners and business owners alike and puts the power back into the voters, along with a local tax cap.
The focus this session was property tax reform, so all resources were put into that. Unfortunately, the legislature did not act to further phase out the onerous franchise tax working to repeal the tax someday.
However, legislators understand that this tax weighs even more heavily on the backs of small business owners, as compliance is costly, and many must pay the tax whether they’ve netted a profit or not. NFIB will continue to make the repeal of the franchise tax a number one priority.
Repealing or increasing the exemptions for the business personal property tax (or inventory tax) has long been a priority for NFIB. NFIB supported legislation that would have increased the exemption of tangible personal property from $500 to $2500, which would ease the fiscal and administrative burden on small businesses.
A business owner can only exempt tangible property worth $500 or less in their assessment of property taxes owed. If passed, this legislation would have let business owners exempt property worth up to $2500—a great start to tax relief. Unfortunately, the measure failed to pass.
Grade: B+
Reeling in Regulatory Overreach
The legislature would have scored an “F” had it not been for the bills that NFIB successfully killed which would have piled onto to the growing regulations and mandates on small businesses locally, statewide and federally.
Close to 200 bills were filed this session that would add a new regulation, new litigation efforts, or a new mandate onto a small business employer. NFIB killed all but two of those bills – health insurance mandates that don’t specifically affect business practices.
Where did legislators fall down?
NFIB spearheaded the effort to pass legislation preempting cities from regulating private employment practices like benefits, leave, scheduling and hiring.
The Texas business climate is under direct attack from national labor unions who are pressuring cities to pass their politically motivated measures. Three Texas cities, and growing, have already passed paid sick leave ordinances, and two have already announced their efforts to pass predictive scheduling ordinances.
This session was the time to stand up against these overreaching cities and for Texas small business, but many lawmakers did not. The legislation failed to pass, so NFIB will continue to fight off these efforts in the courts until the Texas Legislature decides to act.
Grade: D
Union Transparency
NFIB was part of a coalition of business groups to pass legislation dealing with project labor agreements (PLAs).
Unions use PLAs to control the terms and conditions of employment for specific construction projects. PLAs are increasingly being used across the nation as a means of forcing governmental entities to award contracts to union companies.
House Bill 985 sponsored by Rep. Tan Parker (Flower Mound) ensures state resources are not used to show a preference in awarding government construction contracts and adds a level of transparency that was not previously there.
This was a good first step toward stopping organized labor for seizing the upper hand in both the government contracts and state politics, but the Texas Legislature has still done nothing in putting an end to the government collection of union dues through our public employee paychecks. By acting as dues collector for national labor unions, Texas has put hundreds of millions of dollars into the union coffers only to be used directly against the business community and their allies.
Grade: C
Health Insurance Mandates & Burdensome Cost
“Cost of health insurance” is identified as one of the biggest problems and priorities for NFIB members yearly. Health insurance mandates are the driving factor for increased health insurance costs.
Texas already has 41 mandates in place – the third highest in the country. Each mandate increases the cost of health insurance premiums by approximately one to five percent, which may seem insignificant, but every one percent increase in premiums costs consumers and employers $230 million a year in the fully insured market.
This session over 40 new health insurance mandates were filed and only two made it to final passage. NFIB opposed all new health insurance mandates but are happy with the results as it could have been much worse for Texas small businesses.
Grade: B+
Workforce Development
“Lack of a skilled workforce” is also identified as one of the biggest problems for the small business community. Often, small business owners have the positions to fill, but cannot find anyone to fill them.
For several sessions, NFIB has been on a workforce coalition aiming to pass legislation to provide more workforce skills training in schools in order to graduate students directly into the workforce. These programs were developed in Texas schools in 2015 and continue to be built upon through legislation supported by the business community.
This session the legislature passed 17 separate pieces of legislation to continue to expand these workforce skills training programs, ultimately helping the small and large business community alike and the future economy of Texas.
Grade A+
