Home  >  Kansas  >  Small Business Roundtable Gives Obama Administration an Earful on Job Creation

Small Business Roundtable Gives Obama Administration an Earful on Job Creation

By   /   November 11, 2011  /   3 Comments

If President Obama truly wants input on how to create jobs he just got a large helping from a few Kansas small business owners.

Small business owners in Kansas say they just want government to get out of the way and stop penalizing them to pay for runaway government spending.

Mike Strong, owner of Mike’s Rent-to-Own in Hutchinson, said the Patient Protection and Affordable Care Act, popularly known as ObamaCare, and runaway government spending are the biggest problems he sees with small business development.

“The most common thing I hear is, we don’t know what going to happen with the health care law,” Strong said during an invitation only White House Council roundtable in Hutchinson recently. Patricia Brown-Dixon, Region 7 Administrator for the U.S. Small Business Administration, tried to keep the focus on President Obama’s proposed American Jobs Act.

KansasWatchdog.org received a tip about the meeting and asked for permission to attend.

“I have 48 employees and I’m thinking about opening another store,” Strong said. “If I do that I’m going to have over 50 employees. When I go to conventions almost every businessperson there says, Mike, you might ought to reconsider about going over 50 because that 50 puts you in a different category in the health care law. I hear that a lot.”

“My other comment would be, if we’re looking for suggestions and if the President is talking to me, quit spending money like it grows on trees,” Strong said. “We’re so far in debt we don’t think we’re ever going to get out. We’re just really nervous, nothing’s for certain so we’re going to kind of hang on to our money until we find out what’s going to happen.”

Mike Bergmeier, owner of Shield Agriculture makes payroll for 43 employees. “If government cuts taxes I’ll hire people and expand.”

Rising costs attributable to government regulation have kept him from hiring, he said. “My health care costs since the health care act of 2010 have had a direct cost impact of $30,000. That’s one guy I can’t hire. Four dozen regulations I can name have had direct cost of $20,000. That’s another guy I can’t hire. Government doesn’t have a good track record of taking my money and growing the economy. They suck at it.”

Brown-Dixon opened the roundtable with a summary of President Obama’s jobs proposal for tax cuts and credits targeted at small businesses and veterans, spending $50 billion for transportation and reducing regulation. The plan also calls for limiting tax deductions, and thus raising taxes, for households making more than $250,000 a year and closing what she called a corporate loophole by extending the depreciation time for corporate jet purchases.

She also said that, “So far this administration, I’m told, has fewer regulations than the other eight years before it.”

That statement was met with a loud hmmmm from one attendee followed by laughter from around the room

Bob Fee, owner of Fee Insurance, told Brown-Dixon, “If I was going to advise the President I’d advise him not to go it alone without the Congress. We need to make sure we work within our democratic processes. I would encourage him keep it simple. We are so convoluted with so many regulations and so much stuff we have to comply with it’s compressing business.”

Fee also pointed out that many small business owners report business profits on their individual tax returns. “They get taxed as if they took it all, when in fact they did not, they can’t take that all out or they don’t have a going concern,” Fee said. “That money has to stay inside the business in order to keep the business going for another year.”

For households with $250,000 or more annual income Obama’s plan would increase the tax rate and cap itemized deductions at 28 percent. Those changes would mean many small business owners would not be able to hire as planned, or would cut salaries or employees.

Bill Wyer is the owner of Sidney’s Hairdressing College in Hutch. He told the gathering, “I am one of those sub S corporations where the money the company makes flows to a personal statement.” He said half of the money stays in the business and the half that would be profit pays taxes. “It’s a very frustrating situation.”

Even setting the threshold at $1 million catches mostly small business owners according to an August analysis of small business taxes by the U.S. Treasury Department. Seventy percent of tax filings with adjusted gross income over $1 million were small business owners according to the study.

Brian Youngers, General Manager of Wells Aircraft in Hutchinson, said the change in depreciation for corporate jets is misguided and will hurt the state’s economy.

Wells Aircraft provides a broad spectrum of services for private aviation including maintenance, avionics, flight training and charters. Youngers says a Wells charter can often get business fliers to their location cheaper than commercial flights booked on short notice. “I see an aircraft as a business tool.”

According to a study commissioned by the National Business Aviation Association 74 percent of corporate aircraft flights are time-critical trips made by sales, technical and middle management employees.

“The only reason a company will buy an airplane is if they can justify it,” Youngers told KansasWatchdog.org after the roundtable. “When somebody in a company wants to buy an airplane they have to go to the CFO and say, here’s how we pay for this. If you can’t do that, you’re not going to get the plane.”

Changing the tax law to lengthen depreciation of corporate aircraft from five to seven years may backfire. “While closing a loophole may provide revenue for the president’s plan, it’s going to have a negative impact on my business, let alone the very direct impact it will have on all the aviation companies in Wichita that make these planes and all their suppliers and their subcontractors.”

“People aren’t going to keep their jobs and we’re not going to get to work on them and install avionics and fuel them and train pilots. All those things aren’t going to happen.”

Brown-Dixon asked the group if a proposed tax holiday for businesses hiring new employees or raising employee pay would help create jobs.

Fee responded, “I don’t see that as an incentive. Most business owners don’t go out and hire workers because there’s a candy bar out there. I think that they hire workers that they need to get the work done.”

Jeff Clark, owner of Jeff Lawn Service, agreed the jobs act wouldn’t cause him to hire anyone. “Tax incentives and everything else, that is not my problem. I’m not anywhere close to having those kinds of needs. I’m just trying to make a profit. That’s not going to do anything for people with small businesses with one to 10 people.”

According to Census data 78.3 percent of business firms in the U.S. have no employees and of those with employees, 78.6 percent have fewer than 10.

Clark said his problem is access to capital, money to grow his business so he could hire people. “I’ve been trying to be a small business for over 30 years in different fields. Opportunities come, and I spend more time more or less dancing for a bank, trying to get enough money to do what I want. It’s been frustrating.”

Dave Inskeep, Chairman of the Hutchinson chapter of SCORE, the Service Corps of Retired Executives, said he’s seen that problem while working in commercial lending for five banks.

He said he was often the only person at the bank willing to make SBA loans because someone at the bank long ago had a bad experience with a small business loan. “I can’t tell you every good loan I’ve made, but I can tell you, right to the detail, every bad loan,” Inskeep said. “That’s one of the problems we have to overcome. Lenders have a long memory. It’s got to be somebody’s fault so it’s going to be SBA.”

“My local bank has done exactly two SBA loans, mine and one other,” Bergmeier said.

LeeAnn Marker, Business Advisor and Commercial Lender for Hutchinson Credit Union, said she would like to make more small business loans but current banking regulation limits credit union loans to 12.25 percent of assets. “We need it raised. We’re asking for 27.5 percent. Once again you’ve got government saying you can’t do that. It’s an arbitrary regulation put on us.”

Mark Buckley with the Kansas Small Business Development Center said the SBA and federal banking regulators are at cross-purposes. “We’ve got regulators clamping down on these little banks and they’re not the problem. I didn’t see little banks getting bailouts. I saw Bank of America getting a bailout. I saw big banks getting bailouts and they’re not under the squeeze that a small bank is.

Buckley said the dramatic decline in the number of locally owned banks is a big problem. “We can’t continue to do that because in America the small bank is the lifeblood of the small business man because my bank knows me. The government needs to get these two together, the small business administration and the bank regulators.”

Another reason cited for banks’ reluctance to make small business loans is the overwhelming number of loan programs sponsored by SBA, U.S. Department of Agriculture and other government agencies.

Bergmeier said he did 100 percent of the homework for his loan and presented it to the bank. “I don’t know that they don’t want to, they just don’t understand.”

Wayne Bell, District Director for the SBA in Wichita, said lenders in his territory are mostly community banks. “They don’t have a lending officer who is solely dedicated to SBA like your larger national lenders.”

Dan Ledeboer, Director of Quest Center for Entrepreneurs in Hutchinson, said he’d like to see programs for small business entrepreneurs consolidated. “There are so many programs that every day something else is out there. You could literally spend your whole life finding out what’s out there.“

<!– /* Font Definitions */ @font-face {font-family:Calibri; panose-1:2 15 5 2 2 2 4 3 2 4; mso-font-charset:0; mso-generic-font-family:auto; mso-font-pitch:variable; mso-font-signature:3 0 0 0 1 0;} @font-face {font-family:Cambria; panose-1:2 4 5 3 5 4 6 3 2 4; mso-font-charset:0; mso-generic-font-family:auto; mso-font-pitch:variable; mso-font-signature:3 0 0 0 1 0;} @font-face {font-family:"Lucida Grande"; mso-font-charset:0; mso-generic-font-family:auto; mso-font-pitch:variable; mso-font-signature:3 0 0 0 1 0;} /* Style Definitions */ p.MsoNormal, li.MsoNormal, div.MsoNormal {mso-style-parent:""; margin:0in; margin-bottom:.0001pt; mso-pagination:widow-orphan; font-size:12.0pt; font-family:"Times New Roman"; mso-ascii-font-family:Cambria; mso-ascii-theme-font:minor-latin; mso-fareast-font-family:Cambria; mso-fareast-theme-font:minor-latin; mso-hansi-font-family:Cambria; mso-hansi-theme-font:minor-latin; mso-bidi-font-family:"Times New Roman"; mso-bidi-theme-font:minor-bidi;} a:link, span.MsoHyperlink {mso-style-noshow:yes; color:blue; text-decoration:underline; text-underline:single;} a:visited, span.MsoHyperlinkFollowed {mso-style-noshow:yes; color:purple; text-decoration:underline; text-underline:single;} p.MsoAcetate, li.MsoAcetate, div.MsoAcetate {mso-style-link:"Balloon Text Char"; margin:0in; margin-bottom:.0001pt; mso-pagination:widow-orphan; font-size:9.0pt; font-family:"Times New Roman"; mso-ascii-font-family:"Lucida Grande"; mso-fareast-font-family:Cambria; mso-fareast-theme-font:minor-latin; mso-hansi-font-family:"Lucida Grande"; mso-bidi-font-family:"Times New Roman"; mso-bidi-theme-font:minor-bidi;} span.st {mso-style-name:st;} span.BalloonTextChar {mso-style-name:"Balloon Text Char"; mso-style-locked:yes; mso-style-link:"Balloon Text"; mso-ansi-font-size:9.0pt; mso-bidi-font-size:9.0pt; font-family:"Lucida Grande"; mso-ascii-font-family:"Lucida Grande"; mso-hansi-font-family:"Lucida Grande";} @page Section1 {size:8.5in 11.0in; margin:1.0in 1.25in 1.0in 1.25in; mso-header-margin:.5in; mso-footer-margin:.5in; mso-paper-source:0;} div.Section1 {page:Section1;} -If President Obama truly wants input on how to create jobs just got a large helping from a few Kansas small business owners.Small business owners in Kansas say they just want government to get out of the way and stop penalizing them to pay for runaway government spending.

Mike Strong, owner of Mike’s Rent-to-Own in Hutchinson, said the Patient Protection and Affordable Care Act, popularly known as ObamaCare, and runaway government spending are the biggest problems he sees with small business development.

“The most common thing I hear is, we don’t know what going to happen with the health care law,” Strong said during an invitation only White House Council roundtable in Hutchinson recently. Patricia Brown-Dixon, Region 7 Administrator for the U.S. Small Business Administration, tried to keep the focus on President Obama's proposed American Jobs Act.

KansasWatchdog.org received a tip about the meeting and asked for permission to attend.

“I have 48 employees and I’m thinking about opening another store,” Strong said. “If I do that I’m going to have over 50 employees. When I go to conventions almost every businessperson there says, Mike, you might ought to reconsider about going over 50 because that 50 puts you in a different category in the health care law. I hear that a lot.”

“My other comment would be, if we’re looking for suggestions and if the President is talking to me, quit spending money like it grows on trees,” Strong said. “We’re so far in debt we don’t think we’re ever going to get out. We’re just really nervous, nothing’s for certain so we’re going to kind of hang on to our money until we find out what’s going to happen.”

Mike Bergmeier, owner of Shield Agriculture makes payroll for 43 employees. “If government cuts taxes I’ll hire people and expand.”

Rising costs attributable to government regulation have kept him from hiring, he said. “My health care costs since the health care act of 2010 have had a direct cost impact of $30,000. That’s one guy I can’t hire. Four dozen regulations I can name have had direct cost of $20,000. That’s another guy I can’t hire. Government doesn’t have a good track record of taking my money and growing the economy. They suck at it.”

Brown-Dixon opened the roundtable with a summary of President Obama’s jobs proposal for tax cuts and credits targeted at small businesses and veterans, spending $50 billion for transportation and reducing regulation. The plan also calls for limiting tax deductions, and thus raising taxes, for households making more than $250,000 a year and closing what she called a corporate loophole by extending the depreciation time for corporate jet purchases.

She also said that, “So far this administration, I’m told, has fewer regulations than the other eight years before it.”

That statement was met with a loud hmmmm from one attendee followed by laughter from around the room

Bob Fee, owner of Fee Insurance, told Brown-Dixon, “If I was going to advise the President I’d advise him not to go it alone without the Congress. We need to make sure we work within our democratic processes. I would encourage him keep it simple. We are so convoluted with so many regulations and so much stuff we have to comply with it’s compressing business.”

Fee also pointed out that many small business owners report business profits on their individual tax returns. “They get taxed as if they took it all, when in fact they did not, they can’t take that all out or they don’t have a going concern,” Fee said. “That money has to stay inside the business in order to keep the business going for another year.”

http://www.feeinsurance.com/

For households with $250,000 or more annual income Obama’s plan would increase the tax rate and cap itemized deductions at 28 percent. Those changes would mean many small business owners would not be able to hire as planned, or would cut salaries or employees.

Bill Wyer is the owner of Sidney’s Hairdressing College in Hutch. He told the gathering, “I am one of those sub S corporations where the money the company makes flows to a personal statement.” He said half of the money stays in the business and the half that would be profit pays taxes. “It’s a very frustrating situation.”

http://sidneyshair.com/

Even setting the threshold at $1 million catches mostly small business owners according to an August analysis of small business taxes by the U.S. Treasury Department. Seventy percent of tax filings with adjusted gross income over $1 million were small business owners according to the study.

http://www.scribd.com/doc/71985277/Treasury-Department-analysis-of-small-business-taxes

Brian Youngers, General Manager of Wells Aircraft in Hutchinson, said the change in depreciation for corporate jets is misguided and will hurt the state’s economy.

http://hut.wellsac.com/

Wells Aircraft provides a broad spectrum of services for private aviation including maintenance, avionics, flight training and charters. Youngers says a Wells charter can often get business fliers to their location cheaper than commercial flights booked on short notice. “I see an aircraft as a business tool.”

According to a study commissioned by the National Business Aviation Association 74 percent of corporate aircraft flights are time-critical trips made by sales, technical and middle management employees.

http://www.noplanenogain.org/Quick_Facts.htm?m=47&s=391

“The only reason a company will buy an airplane is if they can justify it,” Youngers told KansasWatchdog.org after the roundtable. “When somebody in a company wants to buy an airplane they have to go to the CFO and say, here’s how we pay for this. If you can’t do that, you’re not going to get the plane.”

Changing the tax law to lengthen depreciation of corporate aircraft from five to seven years may backfire. “While closing a loophole may provide revenue for the president’s plan, it’s going to have a negative impact on my business, let alone the very direct impact it will have on all the aviation companies in Wichita that make these planes and all their suppliers and their subcontractors.”

“People aren’t going to keep their jobs and we’re not going to get to work on them and install avionics and fuel them and train pilots. All those things aren’t going to happen.”

Brown-Dixon asked the group if a proposed tax holiday for businesses hiring new employees or raising employee pay would help create jobs.

Fee responded, “I don’t see that as an incentive. Most business owners don’t go out and hire workers because there’s a candy bar out there. I think that they hire workers that they need to get the work done.”

Jeff Clark, owner of Jeff Lawn Service, agreed the jobs act wouldn’t cause him to hire anyone. “Tax incentives and everything else, that is not my problem. I’m not anywhere close to having those kinds of needs. I’m just trying to make a profit. That’s not going to do anything for people with small businesses with one to 10 people.”

According to Census data 78.3 percent of business firms in the U.S. have no employees and of those with employees, 78.6 percent have fewer than 10.

Clark said his problem is access to capital, money to grow his business so he could hire people. “I’ve been trying to be a small business for over 30 years in different fields. Opportunities come, and I spend more time more or less dancing for a bank, trying to get enough money to do what I want. It’s been frustrating.”

Dave Inskeep, Chairman of the Hutchinson chapter of SCORE, the Service Corps of Retired Executives, said he’s seen that problem while working in commercial lending for five banks.

http://hutchinson.score.org/node/146042

He said he was often the only person at the bank willing to make SBA loans because someone at the bank long ago had a bad experience with a small business loan. “I can’t tell you every good loan I’ve made, but I can tell you, right to the detail, every bad loan,” Inskeep said. “That’s one of the problems we have to overcome. Lenders have a long memory. It’s got to be somebody’s fault so it’s going to be SBA.”

“My local bank has done exactly two SBA loans, mine and one other,” Bergmeier said.

LeeAnn Marker, Business Advisor and Commercial Lender for Hutchinson Credit Union, said she would like to make more small business loans but current banking regulation limits credit union loans to 12.25 percent of assets. “We need it raised. We’re asking for 27.5 percent. Once again you’ve got government saying you can’t do that. It’s an arbitrary regulation put on us.”

Mark Buckley with the Kansas Small Business Development Center said the SBA and federal banking regulators are at cross-purposes. “We’ve got regulators clamping down on these little banks and they’re not the problem. I didn’t see little banks getting bailouts. I saw Bank of America getting a bailout. I saw big banks getting bailouts and they’re not under the squeeze that a small bank is.

http://www.swksbdc.com/About%20Us.html

Buckley said the dramatic decline in the number of locally owned banks is a big problem. “We can’t continue to do that because in America the small bank is the lifeblood of the small business man because my bank knows me. The government needs to get these two together, the small business administration and the bank regulators.”

Another reason cited for banks’ reluctance to make small business loans is the overwhelming number of loan programs sponsored by SBA, U.S. Department of Agriculture and other government agencies.

Bergmeier said he did 100 percent of the homework for his loan and presented it to the bank. “I don’t know that they don’t want to, they just don’t understand.”

Wayne Bell, District Director for the SBA in Wichita, said lenders in his territory are mostly community banks. “They don’t have a lending officer who is solely dedicated to SBA like your larger national lenders.”

Dan Ledeboer, Director of Quest Center for Entrepreneurs in Hutchinson, said he’d like to see programs for small business entrepreneurs consolidated. “There are so many programs that every day something else is out there. You could literally spend your whole life finding out what’s out there.“

http://www.hutchquest.com/

–>

Click here to LEARN HOW TO STEAL OUR STUFF!

During his 28-year journalism career Soutar worked for the Associated Press, the Detroit Free Press, Detroit News and Knight Ridder Newspapers in Washington, D.C. From 1990 to 2008 he worked for the Wichita Eagle as a photo and graphics editor, producing special sections and writing stories on various subjects. He has received numerous international, national and regional journalism and design awards. Before his journalism career Soutar served in the U.S. Navy photographing and writing about events in the Western Pacific and Indian oceans.

  • beth landis

    Unemployment numbers are comprised of those that are in the job market for the past 30 days. It does not include those that have not been in the job market in the last 30 days: people who have given up looking; those that have gone off unemployment because it has run out. One solution to unemployment is High Speed Universities check it out

  • Dave Higdon

    Interesting…from the details here it appears that many Kansas small business owners need an accountant — or a better one; this small Sub-chapter S corp suffers from none of the mistakes seen here…and like the majority of this nation’s small businesses, our profits — that part that gets taxed — are nowhere near $250K and will likely never hit $1 million…

    And despite the anti-tax propaganda, the vast majority of small businesses would never be bothered with the higher rate for people clearing more than $250K…

    But this is what I’d expect in Kansas…

  • Sheila

    Note, once again, that NO ONE from tourism or hospitality, (restaurants, bars) were invited. Brownback did not allow anyone on his Commission on Growth either. We are the invisible industry, cranking out all the tax dollars to run all the handout programs.

    We pay the highest taxes and provide more jobs than the big companies. And yet, we are never invited to the table.

    We get NO tax breaks or incentives.

    Why would they invite us, when we are the ones they are sticking it to the most?