Small Businesses ‘Drowning in Regulations, Mandates’
By nearly every objective measure, Mercantile Development Inc., of Shelton is not a large business.
The 70 year-old company, which produces non-woven wipes for use in many industries, is woman-owned and operated, and employs less than 50 people.
MDI President Lucia Furman came to Hartford Feb. 27 to speak in favor of SB 636, a proposal from Sen. Toni Boucher (R-Wilton) to expand eligibility under the set-aside program for small businesses and contractors.
Boucher’s bill allows companies earning $20 million or less in annual revenues to be eligible for small-contractor set-asides, which reserve a portion of state projects for small businesses. The current threshold is $15 million.
“This arbitrary revenue threshold, which has remained unchanged for a decade, does more than disadvantage Connecticut-based small and minority companies seeking to do business with the state of Connecticut,” Furman told the Government Administration and Elections Committee.
“It also puts up unnecessary roadblocks to doing business with neighboring states.
“For example, a company seeking Minority/Woman-Owned Business Enterprise certification in New York must be certified in their home state.
“But once a Connecticut-based business reaches $15 million, it loses everything: its small business status, its minority owned status, and its business with the state of New York all because of current Connecticut law.”
Uneven Playing Field
CBIA Senior Counsel Eric Brown agreed.
“The current cap of $15 million has been in place for about a decade and is clearly out of date,” Brown said.
While $15 million in gross revenues may sound like a lot, it really isn’t, Furman said.
“A manufacturer with $15 million in gross sales, working on competitive margins, and burdened with the high operating costs associated with doing business in Connecticut, may not have enough in the bank at the end of the year to reinvest in the business,” Furman said.
We need laws that support local business and that are designed to help manufacturers thrive.
Like many small business owners in Connecticut, Furman said she’s tried her best but still finds it frustrating to do business here.
“We operate a clean, safe and profitable business and are always guided by integrity," she said.
"We are financially conservative, growing at a slow and steady pace and always reinvesting profits back into the business."
Small Business Needs Support
Furman said she finds radio ads that declare that Connecticut open for business “disingenuous.”
“Small businesses in Connecticut are drowning in state regulations and mandates piled on top of already onerous federal regulations,” she said.
“Uncontrolled spending in deficit mode has translated to wild tax policy. Until the state’s structural problems are fixed, this will remain an unattractive place to start or move a business.
“The economic jump start we need will have to come from growth of existing Connecticut businesses.”
Furman cited a 2016 CBIA survey of state businesses that found that fewer than half plan to continue making investments in Connecticut.
“That alarming statistic should be a wake-up call to our government,” she said, “because without Connecticut companies reinvesting profits here, the tax base will shrink and the jobs will continue to disappear.
“We need laws that support local business and that are designed to help manufacturers thrive.”
Furman urged lawmakers to support Connecticut’s small businesses through expanding eligibility under the set-aside program by either substantially increasing the revenue cap or eliminating it altogether.
Brown said Boucher’s bill, as well as HB 6416, which uses federal standards to define a small business, not gross revenue, are both good measures.
“CBIA urges the committee to move forward with a bill that adopts the more expansive federal definitions based on industry type found in the federal Small Business Act,” Brown testified.
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