Business blames state for woes

By: Don Chaddock, Telegraph Managing Editor
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Business owners vented their frustrations at a hearing in Folsom last week and their main message was the same — state regulations are choking businesses and the economy. Sponsored by the Folsom Chamber of Commerce as one of a series of public hearings with state Sen. Dave Cox (R-Fair Oaks) and Assemblyman Roger Niello (R-Fair Oaks), the latest also featured Folsom City Councilman Steve Miklos and El Dorado County Supervisor John Knight. Rochelle Hall, the unemployment insurance manager for Mainstay Business Solutions in Folsom, said the state has changed the ranking for every business to an F when it comes to unemployment. “The California unemployment insurance, the Employment Development Department, has caused tremendous cost to the employers,” Hall said. She cited errors in the payments to employees are of grave concern. “Errors paid to employees are burdened by the businesses,” she said. “The state goes to the employee to get reimbursed for overpayment. If the employee can’t pay, citing financial hardship, the business is stuck with the cost. … There is a tremendous error rate.” Jerry Bircher, owner of Express Office Products and chairman of the Small Business Association, said taxes on businesses are killing the economy. “We have been looking at moving to Nevada or Arizona,” he said. “The business tax is killing us here.” He said the Worker’s Compensation Insurance went up 25 percent and unemployment payments to the state are also going up. “Unemployment (ranks) for everyone are an F, which is the worst you can have,” Bircher said. “That’s the only way they can raise the rates.” He said California is ranked as the 47th worst state related to business taxes. “California taxes are 40 percent,” he said. “Nevada is 11 percent. Dave Doherty, CEO of Stanfield Systems in Folsom, said the state’s policy regarding independent contractors makes using them almost impossible. He said they’ve also been audited by the state EDD regarding independent contracts, so they are no longer worth using. “We have an office in Virginia,” he said. “There it’s possible to be an independent contractor and build a business. … (California regulations are) crushing the American dream for a lot of people.” He said he’s not alone in his feelings of frustration. “It’s shutting us out of work. The small businesses I talk to are all facing the same thing,” Doherty said. Future hearings have yet to be scheduled.