Giving Small Businesses Their Voice

The unsung heroes of our economy are the small businesses with just a few employees. 

While it’s the bigger companies that grab the headlines when there is a big job expansion or layoff, it is small and micro businesses that truly are the bread and butter of our state and national economy.  Unfortunately, these same small businesses are the most vulnerable in conditions like the ones we have faced over the last few years.

Complicating matters for small businesses is the gauntlet of bad government regulatory policy approved over the last decade and before. Like the vulnerability created by poor economic conditions, government red tape creates uncertainty that is difficult for smaller ventures to adjust to and afford.  As a result, fewer entrepreneurs are taking the types of risks with their capital associated with growth and job creation. 

This must change.

One way we can address this issue is to reform Wisconsin’s Small Business Regulatory Review Board through the passage of Senate Bill 47. Under current law, the Board is charged with reviewing government regulations that have a significant financial impact on small businesses. Currently, if a state agency determines that a regulation will have a significant economic impact on small businesses, the agency must forward it to the Board.

The Board is currently comprised of six small businesspeople, the Chairs of the Senate and Assembly Small Business Committees, and nine members of various state agencies.  So, believe it or not, small businesses are actually outnumbered on the Board by the state government agencies that write the rules!  How much sense does that make? 

SB 47 eliminates all government agency representation and increases the number of small businesspeople to seven. Shouldn’t an advisory board made for small businesses actually represent the interests of small business?

In addition, SB 47 requires each agency to help small businesses comply with rules the agency has written. Agencies must establish reduced fines and alternative enforcement mechanisms for minor violations and, when appropriate, consider the use of written warnings. 

Today, small entrepreneurs are guilty until proven innocent when found in violation of a state regulation, even though they often don’t know they’ve violated a rule in the first place.

SB 47 also changes the threshold for when a regulation must be forwarded to the board.  Currently, the agency must forward the rule if it’s projected to have a “significant” economic impact on small businesses. Under SB 47, however, the agency must forward the rule to the Board if it has “any” economic impact, no matter how small.

With the tremendous amount of fear and uncertainty in this economy, job creators need to know what to expect.  Government red tape only makes the uncertainty worse.

When you dial back government over-regulation, entrepreneurs gain the confidence they are looking for in order to take risks with their capital and take steps that will result in long-term job growth.  That is the fundamental way in which an economy expands – and that is what we have to strive for in Wisconsin.

To contact me with any questions or comments or to sign up for my regular e-updates, please send an e-mail to Rep.Knodl@legis.wi.gov or call me at (608) 266-3796.