This month, a key survey revealed a wide disconnect between San Diego's small business owners and their elected government representatives. Rather than discourage future job growth and corporate spending, local leaders should consider reinstituting a proven program that enables entrepreneurs to be heard loud and clear at City Hall.
At issue is the San Diego Small Business Barometer, a new survey commissioned by the San Diego Regional Chamber of Commerce, and conducted by Competitive Edge Research & Communication (CERC), a local polling firm. Surveying 500 businesses with 50 or fewer employees between April 21-23, 2010, CERC found that San Diego's small business owners take a "cautiously optimistic outlook" toward their financial future. While a full 56 percent of respondents believe that company revenue will increase over the next 12 months, only some plan this year to increase overall spending (35 percent), expand payroll (28 percent) and investments in business development (34 percent). Part of the underlying problem can be sourced to our stagnant economy. More worrisome is the perception that government officials are unhelpful or oblivious to the needs of business people.
CERC found that a strong majority (57 percent) of respondents view local government as "unfriendly" to the interests of the small business community. When asked how San Diego's elected representatives are fostering a healthy environment for small businesses, respondents gave mostly negative reviews of the San Diego City Council, the County Board of Supervisors and other regional municipalities. To be sure, the harshest reviews were reserved for state government officials -- a full 76 percent of survey respondents rated Sacramento as doing a bad job for the commercial community -- though that should not come as any relief. The Barometer report notes that while "state government comes in for the harshest criticism, the perceived job performance of local, county and federal governments are all responsible for how small firms view their business prospects."
Changing these disastrous public perceptions should begin by addressing the priorities of small business owners. When asked to identify their top business needs, more than nine out of 10 (91 percent) Barometer respondents indicated a healthier local economy, with 43 percent stating it is "very important" and 33 percent as "extremely important." The second and third highest responses were cutting business taxes (87 percent) and streamlining regulations and bureaucracy (86 percent), respectively. County and city officials may have few commercial taxes to cut, especially in these tough economic times, but common sense reforms can be advanced (cost-free) that can help foster job growth and greater capital spending from those that need the greatest encouragement.
From 1993-2000, special public meetings known as "Regulatory Relief Days" were held at San Diego City Hall, giving everyday citizens and business owners an opportunity to share with elected officials their horror stories with local red tape. Equally important, the popular program institutionalized an annual opportunity to target onerous and obsolete city regulations for repeal. With bipartisan support, Regulatory Relief Days successfully removed permit requirements for certain types of low-grade construction, reduced the time to get a business permit by more than half, and allowed child care centers in residentially zoned areas. Ultimately the program lead to the elimination of more than 40 unnecessary regulations and demonstrated the city's commitment to listen to the concerns of the community, which is in demand now more than ever. The Small Business Barometer revealed that 76 percent of respondents want the business community to have a "stronger voice" at City Hall.
Regulatory Relief Days at City Hall may not be on the books today, but it could be on the horizon. Councilmember Carl DeMaio, who has previously expressed his support for the program, has reached out to small business owners to advance a broad job creation agenda. Said DeMaio, "I believe that the city of San Diego must do all that it can to help small businesses, because they are the true economic driver in our city. We have to move towards streamlining our permit processes, supporting technical assistance organizations more efficiently and perhaps most importantly, keeping taxes and fees low."
Whether his colleagues join him in this effort remains to be seen, but promising steps have been taken in recent months to expand public resources to local small businesses. Just this April, the San Diego City Council signed off on a $95,000 grant from the U.S. Small Business Administration, which will in part help develop a virtual "Business Resource Center" on the Internet that serves as a one-stop information clearinghouse on starting and expanding a business in San Diego. A citizen's commission on economic development, commissioned by the Council, is also now in review of various proposals and ideas for job growth and regulatory reforms, including a business license tax amnesty that has proven in other cities to increase government revenues and improve business enrollment. With an estimated 162,000 San Diego County residents unemployed today, it is my sincere hope that more business-friendly solutions will emerge from City Hall in the coming months.
Small business owners must not only seize open opportunities to be heard -- they must create them. Now is the time for every entrepreneur to raise their voice, speak out and be heard in San Diego.
Vasquez is the senior policy analyst with the San Diego Institute for Policy Research.