By Jason Doré, Assistant Chief Counsel for External Affairs/Director of the Office of Information
California small businesses must overcome a heavy load of often onerous and complex regulatory obstacles at the state and federal level in order to survive and thrive. This is what small business owners told Advocacy as the office conducted regulatory reform roundtables in Modesto, Sacramento and Santa Clarita and visited 10 small businesses throughout the state.
“It’s becoming very, very difficult to do business in the state of California,” one small business owner told Advocacy in Santa Clarita. “Regulations are really affecting our business every single day.”
While small business owners had numerous gripes about federal regulations, concerns with state and local regulations dominated the discussions.
“If we don’t start turning around this avalanche of regulations, businesses will continue to leave,” one frustrated small business owner told Advocacy in Sacramento.
California regulations impacting the hiring and employment process raised particular concerns: “You have no rights as an employer in California when you’re hiring people,” a familiar refrain we heard expressed throughout California. “You are not providing an incentive for us to create jobs. You are actually de-incentivizing us from hiring people.”
Small business owners expressed their frustration with the overall burden and reach of federal regulations in conjunction with the state and local regulations. “Why make it so hard that we can’t stay in business?,” a Modesto small business owner asked.
Californians feel the impact of new proposed rules and regulatory uncertainty at each level of government: “Every time you guys make a rule, it really has an impact,” a Sacramento small business owner exclaimed. “When California or the federal government sneezes, small business catches a cold.”
The particular regulations at issue were as diverse as the terrain and the people of the state of California: Federal permitting for development projects required by the natural historic preservation act, the IRS 1099 C requirement for car dealers, predatory lawsuits under the Americans with Disability Act, Consumer Financial Protection Bureau’s credit reporting penalties, Department of Transportation’s procurement rules, outdated science used by various federal agencies to implement requirements on the fishing industry, electronic logging device requirements for small truckers, and many more.
The pure number and expansive nature of the regulations on the book was a common concern.
“Ninety-nine percent of small businesses are not in compliance with something,” a California small business advocate told Advocacy.
While they are exasperated with the regulatory landscape facing California small businesses, the small businesses we visited and heard from at the roundtable meetings were grateful to discover they have a voice in Washington, D.C., and an administration who is committed to regulatory reform. One roundtable participant told us, “Big business is in Washington, too, working to put us out of business.”
The small business community did, however, express their disappointment that there was not a similar effort or office on the state and local level.
“We wish the two-for-one executive order would be applied at the state level,” a small business stakeholder stated in regards to President Trump’s executive order requiring two regulations to be eliminated for each one that is promulgated.
Those attending the roundtables also expressed the importance of small businesses engaging in the regulatory arena.
“If you don’t get engaged in some form, you will get crushed,” warned a California small businessman at the conclusion of our Sacramento roundtable.
Advocacy was in Modesto, Sacramento and Santa Clarita, Calif. for Regional Regulatory Reform Roundtable meetings April 30-May 3.
Can’t get to a roundtable near you? Fill out this form and tell us about your federal regulatory burdens. We will pass this information on to the appropriate agency and use it in the planning of upcoming Regional Regulatory Reform Roundtables.
Jason Doré is the Assistant Chief Counsel for External Affairs/Director of the Office of Information. Doré can be reached at Jason.dore@sba.gov.