By Charles Maresca, Director of Interagency Affairs
When you invite small businesses in Wisconsin to discuss their ideas for regulatory reform, you expect to hear from dairy farms (we did), and cheese producers (we did), and other food producers (we did). But perhaps the business representatives were encouraged by the remarks of SBA Administrator Linda McMahon, who asked them to speak freely.
She said, “I genuinely love business,” in describing her motivation in accepting President Trump’s nomination to lead the agency. “I love to see small businesses thrive and grow. I know the ups and downs of having a small business.”
McMahon went on to share her own small business story of how she built her business, taking it through a bankruptcy all the way to a global business. She assured the group with these words: “I can advocate on behalf of small business. I am out touring our 68 SBA offices — It is my job to listen and to be informed in the marketplace. We have to be with those people operating business, and understand their burdens and the opportunities. I appreciate your time and attention. SBA is the best kept secret — I want to break that shell wide open.”
And with that, the floodgates opened. From a small production company who cannot understand the maze of payroll questions posed by federal agencies, to a premium cigar retailer who can’t sell any cigars that were not being sold in 2007, to a veterans outreach center that is struggling to keep up with client needs and an economy in transition, we heard so much more than we expected.
A technology consultant reported that he is a “victim” of his own success, as his business has grown from 40 employees to around 200. “We are now in the arms of the federal government,” he said, and he explained, “it is not a comfortable feeling.” Paperwork burdens from health care issues alone required the hiring of an additional employee. Constant change in regulations makes compliance an enormous issue for his business. Noting that agencies often issue “guidance documents” on top of regulations, the gentleman asked, “When does it end?”
Many in attendance were government contractors. They were 8(a) certified, HUBZone, service-disabled and veteran-owned, women-owned, minority-owned businesses, and they also shared their experiences. Several people in the room challenged us: Shouldn’t the federal government ask the small businesses, themselves, about their success or lack of success in securing government contracts? Isn’t that the important point of view?
A few participants came prepared with other questions for federal agencies, particularly around federal contracting issues. For one, it was a question concerning the rules for purchasing their building. Another inquired about bid protests. Another brought up the issue of unfair government competition. For most, the district office could provide answers, and for the rest, Advocacy was able to provide some information and promise to research their questions further, and follow up with the business owners as well as the government agencies when appropriate.
In Wisconsin, transportation of materials over the highways has become complicated by interlocking jurisdictions. A pulp and paper mill can transport its materials more safely on larger trucks using fewer trips, but federal, state and local jurisdictions all impose weight restrictions in excess of the requirements of safety. A company that provides temporary toilets to various sites is in a bind because they are required by the Occupational Safety and Health Administration to service their toilets every week, but the weight restrictions issued by the Department of Transportation make that timeline very difficult and costly, they told us.
A contractor suggested that OSHA’s requirements for recording job hazard analyses were too onerous, and that he had to hire a person just to do the paperwork. An entrepreneur said that the paperwork requirements for her pie-baking enterprise involved recording the farm where the produce (strawberries and rhubarb) was obtained, separating the strawberries from different farms to avoid putting strawberries from two different farms into the same pie, and keeping track of where those pies were sold. She said that she markets her pies at 27 different farmers markets every week, so recording such is not easy as pie.
The baker, and others, mentioned astronomical health care costs, saying that they find it difficult to recruit anyone who cannot obtain health insurance through another family member’s plan. She said she can only recruit among the under-26 population because they might have health care under their parents. And many of these twenty-somethings are first-time workers. As a result, retention is an issue. Another said that they had to hire someone to help with the onboarding process because the health care rules are so complicated. One participant said that he knew of a farming family of five that has chosen to go uninsured because of the cost.
Speaking of farming, the Wisconsin Farm Bureau outlined the difficulties that federal regulations create for small farms, from little or no access to broadband communications to uncertainty over the jurisdiction of the Clean Water Act. This was echoed by another participant, who discussed how long it took to resolve Clean Water Act issues with the Army Corps of Engineers. Farm Bureau also pointed out that there are 14,000 bridges in Wisconsin, and tens of thousands of roadways over culverts, a federal bridge formula adopted by Wisconsin now impedes the transportation of farm products and materials, all falling under (at some point) the Clean Water Act. Another farming representative suggested that the federal government should consider enforcing existing regulations, rather than imposing new requirements. He mentioned virtual monopolies on seeds, fertilizers, and chemicals should be examined under antitrust laws.
Many of these small businesses expressed concern about tariffs. A small business that makes high-end cookware said that it had invested millions of dollars in technology and equipment. Raw materials represent 50 percent of its cost, and the business representative was concerned about possible increases in those costs.
These issues and others were presented with heartfelt emotion and seriousness. At the end of the day, Advocacy had pages and pages of notes and a new list of regulatory issues facing small businesses which the Advocacy team will now work earnestly to address.
Advocacy was in Wisconsin for Regional Regulatory Reform Roundtable and NAFTA Modernization Outreach Meetings on March 15-16.
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.
Charles Maresca is the Director of Interagency Affairs. He can be reached at charles.maresca@sba.gov.
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