Published December 2001

Small businesses share health care, tax concerns

By Kimberly Hilden
Herald Business Journal Assistant Editor

Health care, transportation and taxes topped the concerns of small-business owners in Snohomish County at a recent roundtable discussion.

The roundtable, held Nov. 7 at Everett Community College, was part of the Washington Policy Center's Small Business Project, which aims to gauge the small-business climate in the state.

And when Dan Smith, President of the nonprofit research and education organization, told attendees he wanted their ideas on small-business problems and solutions, he got ’em.

Of primary concern was the rising cost of health-care insurance. Many at the roundtable blamed state coverage mandates for pushing insurers out of the state — and pushing up the costs for those who stuck around following the state Health Services Act of 1993.

“I don’t have insurance now for my employees,” said Sue Magruder of Magruder’s Upholstery in Snohomish. “There’s nothing I can do because the cost is just exorbitant for small business.”

A number of attendees said they’d like to see greater access to bare-bones health-coverage plans and Medical Savings Accounts. All agreed that government should reduce the service mandates to open up the insurance market.

Another hot-button issue was transportation, which drew congestion horror stories and construction complaints.

“For my business, I do not do deliveries between 12 (noon) and 6 o’clock,” Magruder said, citing heavy traffic. “We’ll do them mornings; we’ll do them after 6. That requires that I put on additional help to do those deliveries in the evenings.”

“The big thing that they always seem to talk about regarding transportation is mass transit as a solution,” said Tom Dyer of System Solution Strategies Inc. of Lynnwood. “Meanwhile, you drive down a road and run over all these bumps.”

Or one agency finishes a paving job only to have it ripped up by another department that needs to put in sewer lines, said Louise Stanton-Masten, President of the Everett Area Chamber of Commerce, which co-sponsored the roundtable.

There’s a “need to coordinate those projects between municipalities,” she said.

The group acknowledged that fixing the transportation problem wouldn’t be cheap, but some questioned the state’s ability to handle that money in a cost-effective manner.

“There’s got to be a real strict accountability for the monies that are there,” said Joel Starr, owner of The Flying Pig restaurant in Everett.

Some in the group suggested canceling Sound Transit or reducing the state’s payroll to help pay for a transportation fix, which would include increasing road capacity.

The issue of government accountability came up again when talk turned to the business and occupation (B&O) tax and taxes in general.

It’s “their answer to everything,” said Rick Pratt of Snohomish Transmission in Monroe. “It’s almost like if you’re dumb enough to be in business, you should be punished and have to pay for everything.”

A major concern with the B&O tax is that it taxes gross receipts, Stanton-Masten said, but another issue is that is it consecutively passed on to every subcontractor or subconsultant so that it becomes “a progressive tax on gross.”

Tax-limit legislation, similar to that of Initiative 601, was suggested by some as a way to get lawmakers’ attention.

Other issues brought up during the roundtable were:

• Implementation of the state ergonomics rule, which many thought put too much burden on businesses.
• State’s minimum wage, which is set to increase to $6.90 an hour in January — “The number one cost for restaurateurs is minimum wage,” Starr said. “We have tipped employees. The state does not recognize those tips as wages. ... When you do the real numbers, we have servers making $17, $18 an hour on average.”

The Snohomish County roundtable was one of 15 the Washington Policy Center held across the state during October and November. The center will use the data it collected from the meetings, as well as a survey, to write two reports on the state’s small-business climate — one on problems, the other on solutions — to present to lawmakers, Smith said.

Back to the top/December 2001 Main Menu