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Tony Strickland - We must protect our state's businesses

Posted: October 24, 2009 3:56 p.m.
Updated: October 25, 2009 4:55 a.m.
Owning and operating your own business has never been easy. Start-up capital, office space, equipment, employees, payroll, fierce competition and endless paperwork mean never resting as an owner of a small business. And yet, 99.2 percent of the businesses in California fall into the category of "small" and employ more than half of our state's workforce.

Despite this reliance on small businesses to sustain our economy, California has continued to overregulate businesses to their breaking point. The amount of overregulation in our state yields higher costs, less profits and an inability to compete with neighboring states for business and talented workers.

It's no secret that California is an expensive place to live and do business when compared with other states. A recent report by two business professors from California State University, Sacramento, finally puts a number on the total cost of regulation to the state: $492.9 billion.

That is almost five times the state's general fund budget, and almost a third of the state's gross product. In terms of business growth, we are doing a pretty good job of stifling it. Given the choice, why would a manufacturing company willingly choose to operate under California's stiff regulations when Nevada promises less? On a per-business basis, the total cost of regulation was $134,122.48 per business in 2007, according to the Varshney Study.

As California's unemployment rates passes 12 percent, it's time to reconsider regulations in terms of getting people back to work and keeping businesses and income tax revenue from leaving our state. In terms of employment, this total output loss is equivalent to the loss of 3.8 million jobs for the state each year. A loss of 3.8 million jobs represents 10 percent of the total population of California.

These findings underscore a fundamental disregard on the part of our state for keeping jobs and attracting new businesses to California. As legislators re-examine revenue sources in our state, keeping small businesses afloat needs to be a priority. We must remember that 99.2 percent of the employers in California are small businesses and employ over half of our workforce.

I have worked hard this year to eliminate waste, fraud and abuse in California. Now we must work to protect our greatest asset, the very businesses that drive our economy, provide jobs and generate revenues for our state.

I am certainly not advocating zero regulations on businesses. Protecting employees, customers and our state's resources must remain a priority. However, the key to regulation, is a balance wherein protection does not invite frivolous lawsuits or nickel-and-dime businesses to death.

California has a rich history of innovation and business growth, from agriculture to aeronautics to the internet. We should fiercely protect these assets by extending incentives to do business in our state, instead of cost prohibitive regulations.

Every neighborhood in our state depends on local small businesses like Charmaine's Bouquet Canyon Florist and Minnie Max Cleaners. These small, individually owned businesses in Santa Clarita may not be the giant corporations we read about in the business section of the newspaper or whose commercials dominate television, but they are the very people building our economy.

As I return to Sacramento for another year of tough decisions, I will work with Democrats and Republicans to fight for small business owners. A hospitable environment in California wherein businesses can flourish benefits everyone.

Tony Strickland is a Republican senator for California's 19th Senate District, which includes portions of the Santa Clarita Valley. His column reflects his own views and not necessarily those of The Signal.


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