Contact: Bill G. Smith at (608) 255-6083
Jack Mozloom at (609) 989-8777
NFIB says small companies pay disproportionately for regulatory compliance
MADISON (April 12, 2011) – The National Federation of Independent Business (NFIB), which represents roughly 12,000 small businesses in Wisconsin, testified today in Madison its members pay substantially more than larger companies to comply with the state’s myriad regulations.
“A majority of our members, according to studies, find it is impossible to have knowledge and be in compliance with all the regulations that affect their business,” said NFIB state Director Bill G. Smith, who testified today in favor of Senate Bill 47, otherwise known as the Small Business Regulatory Relief Act. “One in five small business owners believe the cost of regulations has caused them to eliminate jobs, or forced them to postpone the growth or expansion of their business.
“Faced with unprecedented economic challenges, it is essential that regulatory barriers to small business growth and job creation be removed,” continued Smith.
Smith cited statistics showing that small businesses pay a lopsidedly heavy share of the regulatory burden. For example, according to the federal Small Business Administration:
20 employees on average pay 36 percent more to comply with federal regulations than big business.
Compliance with environmental regulations cost 364 percent more in small firms than in large firms.
The cost of tax compliance is 206 percent higher in small firms than the cost in large firms.
The compliance cost per employee for small manufacturers is more than double the compliance cost for medium-sized and large firms
“Many of the proponents of these regulations imagine that only large corporations are affected by these regulations,” said Smith. “The truth is that small businesses pay a much heavier price to be compliant with the proliferation of federal and state rules.”
Smith said that regulatory costs are as much a threat to Wisconsin’s economy as high taxes.
“Wisconsin has a small-business economy,” said Smith. “Eighty five percent of Wisconsin firms have fewer than 20 employees. Three out of every four employ fewer than 10 workers. And substantially more than half of all workers in Wisconsin are employed by a small business.
“So, when lawmakers propose to impose a new rule, they have to keep in mind the consequences,” he continued.
SB-47 includes provisions that will streamline the regulatory review process, modify the membership of the Small Business Regulatory Review Board.
“It would create a user-friendly system overseen by a more representative, more intuitive Small Business Regulatory Review Board,” said Smith.
For more information on NFIB, please visit http://www.nfib.com/Wisconsin.
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NFIB is the nation’s leading small business association, with offices in Washington, D.C. and all 50 state capitals. Founded in 1943 as a nonprofit, nonpartisan organization, NFIB gives small and independent business owners a voice in shaping the public policy issues that affect their business. NFIB’s powerful network of grassroots activists send their views directly to state and federal lawmakers through our unique member-only ballot, thus playing a critical role in supporting America’s free enterprise system. More information can be found at http://www.NFIB.com/newsroom.
