‘Fixing’ problems at legislature creates plenty for state’s small businesses
Carl Gipson
is the director of the Center for Small Business & Entrepreneurship at the Washington Policy Center.
The theme of just about every legislative session seems to be, "More Needs to Be Done." More problems need to be addressed, more action taken, more legislation passed. A search through the 2,500 bills introduced this year demonstrates the legislature’s desire to fix just about any problem imaginable. The only way to repair society’s ills, many lawmakers think, is by legislating problems out of existence.
If only it were that simple.
This year, legislators undertook the tasks of fixing problems as disparate as instituting paid family leave insurance, nominating a state amphibian (the Pacific Chorus Frog), providing health care to families of small employers, appointing a new state vegetable (the Walla Walla Sweet Onion) and the ultimate problem: what to do with $2 billion extra in taxpayer-funded dollars.
What does this mean for our state’s 175,000 small businesses, their employees and what does it mean to their bottom lines? Three issues stand out.
Mandating paid family leave proved to be one of the more controversial topics this session. The idea has been around for years, but with the large Democratic majority in both the House and Senate, it would have been shocking not to see something make it through. Even though two-thirds of small businesses already provide some sort of paid medical leave, the legislature passed a bill that requires up to five weeks paid family leave to care for a newborn or adopted child. Benefits top out at $250 per week.
Much has already been debated about the merits and costs of such a plan. Bottom line is, however, taxpayers are now on the hook for up to $35 million a year to provide the Department of Labor and Industries with up to 80 new state workers to manage an entitlement system that legislators do not yet know how to pay for. A bi-partisan committee is supposed to figure that out before the mandate kicks in on Oct. 1, 2009. There’s nothing like a law that creates an expensive feel-good program, but leaves it up to future committees to figure out how to pay for it.
Health care insurance for small groups was also a hot topic. This state has, or will very soon, hit a tipping point in health care insurance, particularly for small businesses. Legislators continue to pile on costly mandates – there are over 50 now – thereby making health insurance more expensive. Then they are perplexed as to why so many people are being priced out of the health care market.
For the second year in a row, the Senate passed common-sense reforms to help small employers buy health insurance – only to have those needed reforms die in the House. A "core-benefits" plan, which avoids the cost of most mandates, is not legal in this state, even though it would lift thousands of people out of the ranks of the uninsured. After all, a disproportionate number of the uninsured are younger workers who see the high cost of insurance far outweighing the potential benefits.
The real underlying problem facing many small business owners is the sheer amount of new administrative work that piles on after any legislative session. The effect is only exacerbated when a new program is enacted to solve one of society’s so-called problems (e.g. paid family leave). These days, small businesses have fewer resources available to handle the death-by-a-thousand-cuts brought by excessive regulations. Fees and compliance costs now play a larger part in the day-to-day operation of smaller firms.
Now that the legislature has gone home after passing almost three hundred bills, growing government by over 3,000 new state workers, rolling back education standards and further regulating our economic system, the true measure of success will not come from their own congratulatory remarks and laudatory platitudes, but in how the unintended consequences of their actions play out.
One can already sense that small businesses owners and their employees yearn to hear a different message from Olympia. If only the majority of lawmakers would say, "less needs to be done."
Contact Washington Policy Center at 206-937-9691 or online at www.washingtonpolicy.org.
