“How many of you feel the General Assembly is right there and it’s doing everything it can to help your business?” state Sen. Leo Blais asked the 140 small business owners attending the first annual Rhode Island Economic Summit, held Jan. 5 at the Culinary Archives & Museum at Johnson & Wales University.
Only a few raised their hand.
“How many of you personally know your personal state senator and state representative?” the Coventry Democrat and pharmacy owner asked.
Again, only a few, scattered hands were raised.
“Now there’s the disconnect,” Blais said. “The problem I have as a small business person and as an elected official is, how do we hear from the businesses in a vacuum? It doesn’t happen by magic.”
That disconnect between state government and small business owners is what organizers hoped the summit would address.
The U.S. Small Business Administration’s Rhode Island District Office and the R.I. Small Business Development Center organized the summit as a way to formulate a cohesive small business advocacy package, approved by summit participants, for the 2007 legislative session.
The event included remarks by Gov. Donald L. Carcieri, Senate Majority Leader Teresa Paiva-Weed, Blais and House Finance Committee Chairman Steven M. Costantino, as well as a panel discussion and smaller-group discussions.
“We need to understand what you are asking for in government, what you are demanding in health insurance,” said Costantino. “You’re calling for a break on health insurance. The question I have … is will you buy the [WellCare] plan? That’s the question that we have to ask because, ultimately, if you’re not going to buy it, all our work … has been wasted.”
The state legislators urged small business owners to get to know their elected officials and tell them what affects them, and also to testify for or against bills that affect them.
But business owners replied that they often don’t have time to take a whole day off to go testify. They also don’t always have time to research the bills that might negatively affect them.
For example, in 2004 the General Assembly eliminated the tax credit for SBA loan-guarantee fees, which had offset the extra cost of an SBA-backed loan versus a regular commercial loan.
“That’s one that has had a negative affect,” said Paiva-Weed. “To be honest, during the budget process on this issue, I can’t recall getting any correspondence.”
After the panel discussion, attendees broke up into four groups for sessions focused on taxes and budget, health care, regulations and education/work force development.
Rick Nagele said he attended the taxes and budget session because he wanted to learn more about how state government works, and because “non-sustainable increases in expenditures can cause businesses to choose to leave.”
Nagele, president of Advantage Marketing Information in Wickford, said that when he recently agreed to sell a business he had co-owned, he invested the proceeds outside Rhode Island because the business climate is better in other states.
Though Nagele said he doesn’t plan to move Advantage Marketing Information out of Rhode Island, he thinks meeting with legislators was a good first step toward addressing some problems.
Each group had one hour and 45 minutes to discuss the issues and come up with policy recommendations.
The taxes and budget group advised reinstating the SBA tax credit; rolling back the corporate minimum tax from $500 to $250, as it was until 2004; and implementing recent legislation that reduced taxes for some business owners, among other things.
The health care group recommended an “enhanced” community rating system for small businesses (community rating rates the entire population’s loss experience collectively, as opposed to employer-by-employer; a limited form of this is already in place); increasing the cigarette tax to support health care initiatives; and evaluating all coverage mandates.
The regulations group recommended creating financing programs to help small businesses with fire-code compliance, and evaluating regulations, sector by sector, to find ways to clarify them, remove inconsistencies and better use technology to help businesses comply.
The education and work force group urged the creation of a commission to redesign the state’s school system. It also recommended expanding the use of training tax credits, adding more resources to the R.I. Economic Development Corporation’s “Every Company Counts” initiative, and supporting training in ISO and other industry-recognized certifications.
Joan Frattarelli, vice president of Smithfield Diesel & Transmission Repair Inc. in Smithfield, said what she took away from the event was, “there’s strength in numbers.”
“If you get a lot of small business owners in a room, it gives them the incentive to be more proactive,” she said. “[Legislators] do want to hear from us. If we make enough noise … they’ll start to listen.”
The SBDC said it plans to compile the recommendations from the summit – only some of which are listed above – and report them to legislators and the governor by Feb. 1.
