Beacon Hill Must Stop Piling It On Small Businesses
The Massachusetts state Senate recently voted to impose a state-wide plastic bag ban that not only forbids retailers from distributing plastic bags but also requires shops to charge 10 cents for a paper bag. Proponents of the new bag tax felt it was a nominal amount of money. But what some lawmakers consider a small amount adds up quickly for consumers and small retail businesses. It’s the latest instance of the Massachusetts Legislature nickel and diming Main Street small businesses to the tipping point.
On Beacon Hill, you often hear, “It only adds a few cents” or “it costs a few extra dollars.” But for small businesses operating on razor-thin margins, every penny counts. Whether a small shop must absorb the expense of paper bags over more affordable plastic to keep customers, or they are paying higher costs due to the latest labor mandate, lawmakers are tightening the vise on small business owners.
There is a growing laundry list of added costs, taxes, or fees moving through the legislative process or recently signed into law that are putting the big squeeze on family-owned and independent businesses.
A year ago, the legislature enacted mandated paid family and medical leave at private businesses, which not only added higher costs but made running a small business and getting the work done difficult. That benefit requires employees and certain employers to contribute to a newly created state fund. Proponents insisted workers would only have “a few dollars a week” deducted from paychecks. They failed to mention employer’s payroll taxes are rising, they face added costs to find replacement workers, and if they can’t find appropriately trained temps, they could face a temporary shutdown.
The startling price tag of this new benefit program tops $800 million. Let’s call it what it is–a mammoth additional tax and a huge burden on small businesses.
Lawmakers also raised the minimum wage in 2018 to $15 an hour over the next five years, which fell especially hard on small employers hiring entry-level workers and teens. Most people don’t realize that not only do employers need to increase wages for unskilled and inexperienced workers, but they also must boost pay many other employees under the law. Increasing the minimum wage compresses the entire wage scale, so to retain experienced employees, their pay must go up accordingly. The high cost has some business owners opting instead to cut jobs, cut hours, or invest in automation–especially if they can’t raise prices because it would drive customers away.
Even higher costs are looming for small business when lawmakers return to Beacon Hill. Leaders say there is a need for more transportation revenue—targeting any business with trucks, vans, or cars and all drivers in the state. The choices include higher gas taxes, expanded tolls, or new traffic congestion-based pricing. Costs for companies like landscapers, florists, delivery services, and home repair will shoot up. Making it worse, Governor Baker pledged that Massachusetts would join the Transportation Climate Initiative, which would lead to even higher gas prices.
The nickles and dimes have grown into dollars, piled up so high they are sucking the breath out of small businesses. It’s harder than ever to compete with the big guys or continue to survive. Skeptics may claim its clearing out those who were on the edges—but that’s no longer true. There are 1.5 million small businesses in Massachusetts and employing 49% of all the workers in the state, and they are all feeling the pain. Reason must return to Beacon Hill.
