Learning About the Needs of Small Business

Just a few weeks ago the Select Committee on Small Business and Entrepreneurship held its first hearing. I asked to establish this Select Committee in order for us to do a deep-dive into how the legislature could better work with the institutions that form the backbone of our communities and economy – small businesses.

As the chair of this Select Committee, and a small business owner myself, I felt it was important to start our work with a look at the current challenges as well as opportunities for businesses. My goal is to finish the hearings having developed recommendations for policy changes that we can introduce in the next legislative session.

I have a deep appreciation and admiration for our district’s small businesses and entrepreneurs. The 43rd Assembly District is home to numerous renowned neighborhood shopping destinations. We have the Montrose Shopping Park, Downtown Glendale, Magnolia Park in Burbank, Vermont Avenue and Hillhurst Boulevard in Los Feliz, Foothill Boulevard in La Cañada and La Crescenta, and more. These areas are proof of the critical role small businesses play in our state’s economy, culture and neighborhoods.

At our hearing we heard informative testimony from business owners and policy expert including: Sheneui Weber (executive director, Goldman Sachs 10,000 Small Businesses), Betty Jo Toccoli (board president of the California Small Business Association) Pam Elyea (History for Hire), Silvana Arzeno Toledo (CEO, Collab&Play), and Todd Schwartz (owner, Dickey’s BBQ Pit). Their knowledge and experiences painted a good picture of some of the most pressing obstacles facing our small businesses.

One of the major concerns brought up was the housing crisis. Small businesses are struggling to hire and keep employees because many employees cannot afford housing close to their workplace; mix this with a lack of mass transit options in most communities and you have a serious problem that threatens businesses and cuts deep into people’s quality of life. Housing affordability receives a lot of attention, but the crisis of rising rents hits our commercial sector hard as well. Many small businesses operate with razor-thin margins and as rates continue to rise it’s not just the employees being pushed out, but businesses themselves. This issue recently entered the public sphere in Burbank with the formation of the community activist group “Save Magnolia Park,” which is determined to protect the treasured shopping destination from exorbitant rent hikes.

We also heard from business owners that some reforms should be made to certain taxes and fees. For example, LLC fees cost around $800 a year, regardless of the size of the business. The sum might not be significant for medium to large businesses, but for your average small business, it can be tough. A sliding scale for fees, based on the size of the business, is something the committee will be considering.

Todd Schwartz (Dickey’s BBQ) brought up the problem he faces paying taxes and workers compensation on employee tips, citing these are funds he has no control over and makes no revenue from. Concerns were also raised about the unfair advantage online and other internet-based businesses have on brick-and-mortars because online businesses do not have to pay the same taxes when operating in the same areas.

From this first hearing it is clear that that there is plenty of room to improve our business climate but the news isn’t all bad. California is still the world’s fifth largest economy, meaning there is a lot of local economic opportunity. We have great state and municipal programs that can connect businesses with resources and support run out of the Governor’s Office of Business & Economic Development and the Los Angeles Small Business Development Center. We on the committee are committed to exploring new and better ways that we can connect our state’s small businesses with these programs as well as tweak them to be more effective.

As the Select Committee continues to meet, we will dig deeper into the issues we discussed and continue to add new topics so that we can make the most effective and informed recommendations to the legislature as possible. I will be sure to update you again as our work progresses.

In the meantime, I would like to hear your thoughts, concerns and ideas about the current climate of small businesses. As always, I encourage you to reach out to me via email or through my District Office at (818) 558-3043.