OVER-REGULATED STATE MANDATES HURT BUSINESSES

By Natasha Lindstrom
Staff Writer

With California claiming the nation’s highest sales tax, strictest climate change bill and a slew of inflexible employer mandates, Sen. George Runner isn’t surprised to hear from small businesses that say they’re crippled by over-regulation and may be forced to leave the state.

He’s gravely concerned the trend could stymie California’s chances of an economic rebound.

At 8 a.m. Friday Runner, (R-Lancaster), will join Assemblyman Cameron Smyth at Santa Clarita City Hall to host the first of several planned town halls aimed at finding out which state regulations and taxes are hurting local businesses the most. In February Runner plans to host a similar event in the Victor Valley.

As local unemployment rates hover around 15 percent, Runner said repealing or increasing flexibility to state mandates regarding issues such as overtime pay, and meal and rest periods could be critical to creating jobs and strengthening the state’s economy.

“Often times what at California does with its regulatory environment is it makes it so employees are a burden and a potential uncontrolled expense,” Runner said. “So when businesses look at that, they say there’s too much risk in hiring somebody.”

California loses $493 billion annually in regulatory mandates on business — nearly five times the state’s general fund budget, according to a 2009 study by the College of Business Administration at California State University, Sacramento. California’s business climate ranked 48th of 50 states in the Tax Foundation’s 2010 index, with neighboring Nevada earning the fourth best rank.

“Small businesses are being squeezed out by the state,” said Apple Valley Chamber of Commerce Board Chairman Pat Orr. He stressed that mining and transportation companies are getting hit especially hard by environmental laws like Assembly Bill 32, the climate change bill aimed at reducing carbon emissions by enforcing on businesses strict mandates and speedy equipment upgrades.

Vice President Steve Stolp of Raider Trucking, Inc., a family-owned business with its main hub in Hesperia, said that in addition to tough environmental rules, California has worker’s compensation insurance rates that can make it a struggle to stay afloat.

“It’s outrageous how higher workman’s comp is in this state than in other states,” he said.

Stolp cited a worker’s insurance rate difference that made his jaw drop in October as he finalized two nearly identical bid proposals for the same Fortune 500 company, with one job located in Texas and the other in California. Texas charged just $4,323 per employee, while California charged $12,529 per employee — nearly three times more than Texas, according to Stolp.

“The economy is based on businesses and any business that is asked to pay higher fees will slap them onto the consumer,” Stolp said. “If the government really wants to stimulate the economy, the best thing to do would to get the hell out of the way.”

To read entire story, click here.