Small Business, Big Influence

04.01.2012
Small Business

Don’t underestimate the impact you can have at the Capitol

By Bill DeRosa

Although the 2012 General Assembly has been in session since Feb. 8, experienced Capitol watchers know that some of the most important legislative decisions, including those affecting Connecticut businesses, don’t get made until the final days: or even hours: of the session. With more than a month to go before the legislature adjourns on May 9, now is the time for Connecticut’s small-business owners to let lawmakers know that a strong business climate means new jobs and a growing economy.

“Decisions made at the Capitol and the regulatory agencies have a tremendous impact on your business operations, business costs, workforce quality, and the customer base you want to serve,” says John Rathgeber, CBIA’s president and CEO. “That’s why it’s so important for you to learn about the policy issues that affect your company and get your point of view across to your elected representatives.”

Mary Fitzgerald, president of Acme Wire Products Company in Mystic, agrees, pointing out that government officials need to know how their decisions affect Connecticut businesses. She has communicated with legislators via letters, telephone, and in person.

“If they don’t hear your concerns,” she says, “they may make judgments that are detrimental to the business community and result in a negative business climate that would not only hurt existing companies but would hinder Connecticut’s ability to recruit out-of-state firms and cultivate new business ventures from within the state.”

Lt. Gov. Nancy Wyman fields a question from an attendee at Connecticut Business Day at the Legislative Office Building in Hartford. The annual event is just one of the many ways CBIA enables members to interact with policymakers about business-critical issues.

No Business Too Small

Rathgeber argues that small-business owners in particular need to talk to their elected officials. He notes that although most politicians claim to support small employers, they sometimes aren’t clear on what that means in terms of the policies needed to remove barriers and create opportunities for smaller companies to grow and create jobs.

“All political leaders say they want to help ‘Main Street’ but don’t always understand what Main Street needs to be successful,” he says. “It includes reducing business costs, having a capable workforce, and creating an economic climate where Main Street’s customers, including larger employers, are also doing well.”

One factor that can limit small-employer involvement in the policymaking process, however, is the feeling that unlike big corporations, small businesses don’t have the clout to get lawmakers’ attention. Not so, says Rathgeber.

“Many state legislators are more comfortable talking with small businesses than with large companies. It’s more their experience base. They share a sense of trust with small-business owners and they see them as part of the fabric of their community.”

Most legislators want to hear from you. State representatives and senators tell CBIA that they appreciate hearing: and learning: from our members because they deal with hundreds of issues in a single legislative session and can’t be experts in all of them. Others say they appreciate being contacted by businesspeople because they tend to hear more often from business opponents.

“That’s a problem,” says Rathgeber. “Many groups are well-organized and aggressive about promoting initiatives that are adverse to business, economic growth, and job creation. Elected officials get a misperception of what’s important to their constituents.” Rathgeber argues that the business community needs to be just as aggressive.

“If you have a passion for a business-related issue, you should be the one to bring it to your legislators’ attention, because opposition groups won’t hesitate,” he says. “Small businesses are good at promoting themselves to customers; they need to use those skills and all the communication tools they have available to do the same kind of things when it comes to public officials.”

Legislators Are People Too

For businesspeople who have never actively engaged in the legislative process, the idea of interacting with a state representative or senator in an advocacy role may seem intimidating. However, it helps to remember that legislators are working people from the community just like everyone else, says Kim Pita, managing principal of The Pita Group, an integrated marketing and branding agency in Rocky Hill. Pita has gotten to know several legislators and frequently advocates on behalf of the business community.

“I think it’s human nature for people to be intimidated, but legislators are just like us,” she says. “Many run their own professional services businesses. Many are accountants, lawyers, and consultants. We live in the same neighborhoods, go to the same grocery stores, and work out at the same gyms. They’ve got kids in the school systems. So it’s really about dispelling the notion that they’re unapproachable. They’re charged with a big responsibility, but that doesn’t make them different from you and me.”

In fact, members of the state legislature work in a wide variety of fields, including education, finance, business, information technology, law, and nonprofit management.

In addition, state legislators’ small districts give them the opportunity: and the obligation: to interact personally with their constituents. Members of the House, for example, represent districts that average about 20,000 people. Compare that to Connecticut’s U.S. representatives, who cover districts with roughly 600,000 residents.

Multiply Your Impact

An attendee asks a question at Connecticut Business Day at the Legislative Office Building in Hartford. The Feb. 29 event featured question-and-answer sessions with Lt. Gov. Nancy Wyman, Senate Republican Leader John McKinney (R-Fairfield), and Catherine Smith, commissioner of the state Department of Economic and Community Development.

Your influence as a small-business owner can go beyond your individual voice. When you share information with your employees, colleagues, friends, and family about business-critical legislative issues and encourage them to get involved, you can multiply the effect you have on decision-making at the Capitol.

“One small voice becomes larger and louder when it’s combined with others,” says Fitzgerald.

Rathgeber encourages business owners not to avoid talking to people on the opposite side of an issue.

“One of the areas where I think we make a mistake is that we often talk only to people who agree with us,” he says. “There are venues where you are interacting with people who have a different view, who have a different experience base. Using those situations as an opportunity to educate them, to engage in a constructive dialog about why business-friendly policies are so critical to job creation and economic growth, is appropriate. You can be collegial and conversational rather than confrontational, and in doing so, you might get others thinking in a different way.”

Big Issues in 2012

Where is the business community’s voice needed most this year? Unlike 2011, tax proposals are not likely to dominate the current legislative session.

“Given the sweeping tax package adopted last year, we don’t expect a lot of new initiatives on the tax front,” says Bonnie Stewart, CBIA’s vice president of government affairs. “The Finance Committee appears to be focusing on fixes that might be needed as a result of last year’s bill.”

Stewart notes, however, that two groups: the legislature’s Business Tax Credit and Tax Policy Committee and the governor’s Business Tax Policy Review Taskforce: are examining the state’s business tax policies and tax credit programs. “We’ll be watching closely and keeping CBIA members posted,” she says.

Fiscal policy: One issue that should command the business community’s attention this year is the state’s fiscal condition. “We need to tell our legislators that Connecticut must be aggressive in continuing to reduce the size and cost of state government, for several reasons,” says Joe Brennan, CBIA’s senior vice president of public policy.

He cites the state’s enormous unfunded liabilities for state employee retiree pension and health benefits and the need to make state government more efficient so that it can deliver services more quickly and cost-effectively.

He also points to potential problems with this fiscal year’s budget as well as next year’s. At press time, the nonpartisan Office of Fiscal Analysis was projecting an FY 2012 deficit as high as $161 million in the General Fund, due partly to a $31.5 million decline in revenue.

For FY 2013, the governor has proposed an additional $329 million in spending for education reform, the pension system,* social services, and infrastructure improvements. Because a surplus has been forecast for next year, the proposal spends those dollars with no tax increases.

“In the out years, however, there is concern that given current spending rates and projected revenues, we would quickly go into a deficit situation,” says Brennan. “That’s another reason we need to be as aggressive as possible in trying to control state spending.”

A fiscally stable state government is critical to a strong business climate because businesses need to be confident that when they invest here, they can make a reasonable return on their investment.

“The more volatile our fiscal situation is, the greater the threat for tax increases and structural tax changes that would deter business investment,” says Brennan, noting that businesspeople don’t make investments based on one- or two-year budgets, as is the case in government.

“They make those decisions looking out five or 10 or 20 years. So when they look out that far and see these huge unfunded liabilities facing the state, they become wary of making their investments here in Connecticut.”

Brennan urges CBIA members to talk to legislators about supporting the cost-saving recommendations of the Connecticut Regional Institute for the 21st Century. The institute has released reports detailing ways of increasing the efficiency and effectiveness of state and local government operations as well as reforming the state’s pension, prison, and long-term care systems. In addition, he says, legislators need to hear how important it is to continue leaning the operations at state agencies.

A leaner state government would help Kim Pita, whose firm often responds to state requests for proposals. She says the process is daunting for a small-business owner.

“The same paperwork has to be completed over and over,” she says. “If we’re putting in a proposal to, say, the Department of Public Health and then two months later we put one in to the Department of Transportation, even though they’re both state agencies, we still have to complete the same forms, get them notarized”_for me it’s an exhausting process. If you’ve already filled out your state ethics documentation, for example, that should be in a file somewhere under your company name: a clearinghouse of proposal documentation. For some reason, we have to go through the process over and over again.”

Education: In response to the decline in our public schools’ performance in national rankings and a persistent achievement gap between students from low-income households and

A Connecticut Business Day attendee shares his ideas with fellow business leaders and policymakers.

their more affluent peers, Gov. Malloy has proposed a sweeping education reform package (SB 24) now before the state legislature. The governor’s proposal centers on raising expectations for teacher performance, turning around poorly performing schools, making education spending more transparent, and improving the academic programming of technical high schools and community colleges to better align it with employers’ needs so that students are prepared for real-world jobs.

CBIA supports the governor’s reform package, which has received bipartisan support from the Republican leadership in the state House and Senate.

“We have some great schools and many great teachers in the state,” says Rathgeber, “but we haven’t kept pace with the rate of improvement occurring in the rest of the country, and we have failed many students who have gone through the system.”

The message to legislators? “This is the year to do it,” says Rathgeber. “The message our members need to get out to every state legislator is that it’s time to move forward and adopt real reforms that focus on improving student performance and ensuring that the money we’re spending on education is used effectively.”

Labor & Employment: Several important labor bills are being considered this year, including SB 258, which increases the state Unemployment Compensation (UC) Trust Fund’s reserve goal: the target amount of revenue needed in the Fund to anticipate future unemployment benefits. The Fund has been hit hard by record benefit payouts since 2008, forcing Connecticut to borrow more than $710 million from the federal government to meet its benefit obligations. As a result, states like Connecticut are now required to increase their Fund reserve goals to secure future federal loans if needed.

Fortunately, the business community lobbied for and secured changes to this legislation, providing for a gradual increase in the reserve goal over the next five years so that UC taxes would not increase significantly in the near future for most Connecticut employers.

Also under consideration is HB 5291, a proposal to raise the state’s minimum wage from $8.25 per hour to $9 on July 1, 2012, and to $9.75 on July 1, 2013. (The bill also bases future wage increases on the consumer price index.) Connecticut’s minimum wage is the fourth-highest in the nation and consistently outpaces the federal rate.** Another increase could mean a serious setback for smaller employers: and employment: in the state. Studies show that if employers can’t afford rapid increases in labor costs they are less likely to hire and more likely to lay off workers.

“Let your legislators know that employers need public policies that will encourage rather than hinder job growth,” says CBIA associate counsel and labor law specialist Kia Murrell.

Environmental regulation: The effort to streamline permitting and other regulatory processes at the Department of Energy and Environmental Protection (DEEP) that began with the reform legislation of 2010 needs to continue, says CBIA associate counsel and environmental law specialist Eric Brown.

In particular, Brown would like to see DEEP make any new rules simpler and clearer and provide small businesses with more help in understanding the rules and requirements before taking enforcement actions. He suggests that one way to get that message to the department is to go through your state legislators.

“Legislators can inject themselves into the regulatory process,” he says.”Explain that you want to comply and do the right thing but that you’ll never have enough personnel to stay on top of everything DEEP does. Share your perspective on what environmental regulatory practices make it difficult to comply and explain that more compliance assistance rather than punishment is what’s needed.”

Energy: During the current legislative session, several bills focusing on energy reliability have been raised due to last year’s widespread power outages. CBIA is working with lawmakers and DEEP to encourage legislative leaders at both the committee and caucus levels to focus debate on improving reliability and avoiding excessive measures that would unnecessarily increase electric or telecommunication rates.

“Energy costs in Connecticut are among the highest in the nation,” says Joe Brennan. “So the message we encourage our members to convey to legislators is that they need to strike a proper balance between shoring up our infrastructure and not overburdening ratepayers.”

Healthcare: The proliferation of health insurance mandates *** continues to be an issue in the legislature, with several under consideration. Whenever new or expanded mandates are passed, the cost of health insurance goes up.

“It’s never the right time to make health insurance more expensive,” says CBIA associate counsel and healthcare policy specialist Eric George, “but the worst time is when the economy is laboring and small businesses and individuals are struggling.”

CBIA members, says George, should urge their legislators to reject any proposals for new or expanded mandates and enact a moratorium on further mandates.

Recently, the federal government issued regulatory guidance that will likely have a significant impact on the mandate debate in Connecticut. The Federal Centers for Medicare and Medicaid Services said that if a state passes any new or expanded mandate after Dec. 31, 2011, then that state will have to foot the bill for that mandate.

“Under the new federal rule, a state like Connecticut will need to think long and hard before passing mandates, because it’s now the state’s obligation to pay for them,” says George.

CBIA Keeps You Connected

A Connecticut Business Day attendee shares her ideas with fellow business leaders and policymakers.

“One of the things we’ve found is that CBIA helps support business owners and managers who don’t have a lot of experience dealing with legislators,” says Acme’s Mary Fitzgerald, who participated in CBIA’s Manufacturing and Technology Day at the State Capitol last year. Her company and 39 others had booths at the event, allowing more than 60 state lawmakers to see firsthand the impressive variety of products and services Connecticut firms offer.

“CBIA was very good about getting the different legislators from our area to come to our booth so that we could talk to them about the issues that mattered to us,” she says.

In fact, CBIA offers a host of resources and opportunities that make it easy for you to learn about business-related bills and talk to legislators about which ones would help: and which ones wouldn’t.

Online, On Target

When you’ve decided that you want to have a say in what the state legislature does to shape Connecticut’s business climate, a great place to start is our new one-stop government affairs portal, which includes:

  • Issues & Policies: information on the most important business issues taken up by the General Assembly
  • Contact CT Legislators: a powerful tool that lets you identify your state lawmakers and other government officials and email them right from the website
  • Bill Tracker: summaries of business-critical bills, updates on their status, and links to each bill on the Connecticut General Assembly website
  • Track Issues: a form that allows you to sign up for CBIA email alerts and e-newsletters on important legislation in any of eight issue areas, including taxes and labor

In addition, keep up with all the news about business legislation by following CBIA on Twitter or visiting our Facebook page .

Meet and Greet and Get Down to Business

“We’ve always thought that having legislators at our shop is an effective way to communicate,” says Richard Laurenzi, president of Prospect Machine Products in Prospect. “In many cases, we’ve done it during the election cycle through CBIA’s program. Other times, based on our outreach, legislators have contacted us and asked if they could come in to speak about specific issues. To me it’s extremely important that they come to our business, meet our staff, and understand our processes and business model.”

In addition, having legislators visit your workplace is not only a great way to give them a better understanding of your business, says Laurenzi, but it also provides valuable insights into how much an elected official understands about business issues and what you might need to explain.

“It’s as much an interview of them as it is of us,” he says.

Lisa McGuire, CBIA’s director of public affairs, advises employers to make sure that visiting legislators see the human side their company.

“Most small businesses in Connecticut treat their employees like family,” says McGuire. “It’s important that legislators understand that. Tell them how many workers you have and make sure they know that employees at your company are respected and appreciated as individuals.”

Once you get to know your elected officials and establish a rapport, you can become a trusted resource. “You want your legislators to feel comfortable calling you if they have a question about an upcoming proposal that might affect you,” says McGuire.

Call Us to Get Started

Whether you want to invite a legislator to your workplace or meet in another venue, CBIA can help arrange it. Our annual Connecticut Business Day and biennial Manufacturing & Technology Day at the State Capitol also provide ideal opportunities to meet informally with legislators and explain the important role your company plays in the economy and community and what they can do: and avoid doing: to help your business grow and create jobs.

For more information on ways you can be an advocate for a better business climate in Connecticut or to arrange a meeting with a legislator, contact any member of CBIA’s public affairs team:

* The governor’s budget revisions for FY 2013 propose that the state increase the size of its regular annual pension payments and make additional payments to achieve 80% funding of the account years ahead of schedule and to deflate a $5.4 billion final “balloon” payment due in 2032. However, due to the agreement reached last year with state employees, there are no changes to the underlying structure of the pension system, such as curtailing the practice of building up benefits through the use of overtime.

** Connecticut’s minimum wage was raised from $7.65 per hour to $8 on Jan. 1, 2009, and to $8.25 in 2010. The federal minimum wage rate was raised to $7.25 per hour in 2009, where it remains.

*** Mandates are state laws that require certain health insurance policies, typically those purchased by small companies and individuals, to cover specific medical procedures, treatments, or certain populations.

Bill DeRosa is editor of CBIA News. He can be reached at bill.derosa@cbia.com.

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CBIA IS FIGHTING TO MAKE CONNECTICUT A TOP STATE FOR BUSINESS, JOBS, AND ECONOMIC GROWTH. A BETTER BUSINESS CLIMATE MEANS A BRIGHTER FUTURE FOR EVERYONE.