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Riverside Councilman and Congressional candidate Steve Adams conducts a listening tour of small businesses and learns what he already knew: businesses believe they’re over taxed and have to deal with too much regulation.
Riverside City Councilman Steve Adams, candidate in the 41st U.S. Congressional district, toured 10 small businesses in the district Friday to hear complaints about the local and state business climate.
At every stop, Adams got an earful.
Too much regulation. Too many taxes and fees, and most of those are too high. A worker’s compensation system that can crush a small business. A possible hike in the federal minimum wage. The onset of the Affordable Care Act, better known as Obamacare, which now appears to be settled law.
“I’m a former business owner, so I know the problems you deal with when you’re running a business,” said Adams, who owns a chemical-mixing company and his own financial planning business. He was elected to the city council in 2003. “I know what it’s like to pay your employees out of your own pocket and not have anything left for yourself.”
In playing up his entrepreneurial credentials, Adams, a Republican, was drawing a contrast with Democratic incumbent Mark Takano, a former school teacher who is seeking his second term.
“He’s never run a business,” Adams said of Takano. “He has no idea what it’s like to meet a payroll or deal with something as difficult and as complicated as worker’s compensation. How could he?”
Adams was also tweaking Takato with his “10 Businesses in 10 Hours” tour.” The incumbent Congressman has conducted his own tour of 100 businesses in 100 days within the district, which includes Riverside, Perris, Moreno Valley and Jurupa Valley.
By visiting small businesses – usually defined as fewer than 50 employees – Adams hoped to highlight how taxes and overregulation are keeping Inland companies from hiring people.
Adams got a sympathetic ear at his first stop, Sweedish Speed, an automobile repair shop in Perris that specializes in Volvos.
“We have state regulations and federal regulations that are restricting our growth,” said owner Mark Yarbrough, who also owns Champion Towing in Perris. “There are a lot of issues, and if we could get some cooperation from the federal government it would help. But I don’t think that’s going to happen.”
Yarbrough told of having to install $25,000 worth of emissions-control equipment on a 16-year-old truck by order of the federal government. Since spending that much money on an old vehicle made no sense, Yarbrough sold the truck, which still ran well, at auction for a loss.
Yarbrough also had strong words for California’s workers compensation system, in which employees who are injured on the job are paid during their recovery time in exchange for agreeing not to sue their employer for negligence.
The system is intended to protect workers and employers from financial calamity in connection with an on-the-job injury, but critics say it’s abused routinely and causes business owners constant grief, often in the form of endless paperwork.
“We have issues with workers compensation, like a lot of small businesses do,” Yarbrough said. “I think there’s a need for some compensation, but the way the system is set up now there’s no flexibility to it. The regulations are too restrictive and difficult to follow.”
Small businesses have so much trouble dealing with large corporate competitors that the government should be doing everything it can to make things easier for them, said Bud Luppino, owner of Bud’s Tire and Wheel, which operates two stores in Riverside and one in Moreno Valley.
Luppino said he’s concerned about Obamacare, which his company won’t have to deal with until December of next year, as well as a possible jump in the federal minimum wage. Currently $7.25 an hour, the Obama Administration has proposed raising the minimum wage to $10.10 an hour by the end of 2016, and the proposal is starting to gain some support, even in parts of the business community.
“It’s going to affect us a lot, and not in good way,” Luppino said of the Affordable Care Act. “The premiums are going to be too high. And I don’t see the point in raising the minimum wage. I don’t think anyone has a minimum wage job for a career.”
Because businesses in California have to deal with a 39 percent federal income tax rate and a 12 percent state income rate, it’s no mystery why businesses are fleeing the state, said Ben Clymer Jr., vice president of The Body Shop, an automobile repair business with locations in Riverside, Moreno Valley and Yucaipa.
“Fifty one percent of our income is taxed no matter what we do,” Clymer said. “How does that make any sense? I spoke with Mr. Takano and he’s a nice man, and I give him credit for coming here and speaking with us on his tour. But what has he ever done to help businesses?”
But having a business background alone doesn’t qualify someone for Congress, said Derek Humphrey, a consultant with Takano’s reelection campaign.
“It takes much more than just an entrepreneurial background to represent the Inland Empire in Congress,” Humphrey said in a statement. “It takes someone who is fully aware of what Riverside County needs, which is a higher minimum wage, improved job training opportunities and increased access to higher education.”
Adams, who was a Riverside Police officer before he entered the private sector, said his message is simple: creating more jobs is the key to getting the economy back on track, and the best way to do that is for the government to make things easier for small business owners with lower taxes and as little red tape as possible.
“Small businesses are the backbone of our economy, they are our number-one job creators,” Adams said. “But we’re crushing them. That’s bad for middle income and lower-income people who can’t find a job.”
