Small business: The 'economic backbone' is aching

By Lisa Patterson -- Daily World Writer

Grays Harbor, WA - 4/4/02 - The shelves are empty and dusty. All that remains is a sign dangling on the door: "Closed - Forever."

When Ma & Pop stores fold, it's usually a quiet death, with no autopsy. But when large corporations like Boeing threaten to leave and lay off thousands, lawmakers in Olympia scramble for ways to improve the business climate in the state.

"Legislators don't always hear the small business issues in Olympia," Daniel Mead Smith, president of the Washington Policy Center in Seattle, said during a meeting at the Grays Harbor Chamber of Commerce in Aberdeen Tuesday.

And that's ironic, he said, since small businesses are the "economic backbone" of communities. They make up 95 percent of all businesses in the state and provide 60 percent of the jobs in the private sector.

The Washington Policy Center is a non - profit, non - partisan think - tank that has been studying the state's small business climate.

Last fall, it distributed surveys and conducted round - table discussions with small business owners across the state, including Aberdeen, to pinpoint the issues.

The staff has compiled the results into a policy report. Later this year, Smith said, they hope to meet again with small business owners and elected officials to talk about solutions and give small business owners "a voice."

Throughout the state, some of the problems identified are similar to issues big corporations complain about - high taxes, traffic congestion, the rising tide of energy costs, the high minimum wage, expensive regulations and bureaucratic pitfalls.

In Grays Harbor, 35 small business owners participated in a lively roundtable discussion last fall - the "biggest turnout anywhere in the state," Smith noted. Surveys were also distributed.

The top roundtable issues here were complaints about strict environmental regulations, the lack of accountability of elected leaders and barriers that stack the deck against rural areas attracting private industry. The top issues from the surveys were cost and availability of health insurance, gas prices and the overall cost of energy.

LeRoy Tipton, president of the Grays Harbor Chamber, said that some of the of small business owners in rural areas may differ from owners in urban areas.

In Seattle, small business owners complain about traffic congestion. Here, owners try to figure out way to entice people to stop.

"About 50,000 people stop (in the Aberdeen - Hoquiam area) out of the 3 to 5 million who drive through," Tipton said.

The Washington Policy Center concluded that the Grays Harbor community is impacted heavily by environmental regulations, which hit agriculture and resource - based businesses in the area particularly hard.

Owners here cited continuing slowing in timber sales and concern over the inability to attract private industry to the area, the analysts said.

They worried that increasing taxes and regulations "scare away new businesses" and make it "difficult for established firms to stay afloat." Higher prices for health insurance, gasoline and energy were also major concerns of small business owners in the area, Smith said.

A recent national study ranked Washington state as the fifth most regulated state in the country, according to Smith.

The think tank president said that the state administrative code runs more than 34,000 pages and many small business owners say they don't know if they are in full compliance with the law. The cost of compliance is steep and the fines if a business is found to be out of compliance can be even more expensive. "The theme of the report is that Washington state is not the best place to do business," said Smith. "In fact, it is one of the worst."

The Washington Policy Center plans to hold a statewide small business conference later this year and work to reform the regulatory rules in the state and reduce the complexity of the tax system, Smith said.