Small businesses create about two-thirds of all jobs. They are the backbone of a local economy.
May 16 to May 20 marks National Small Business Week. This is a time to honor small businesses in our community and the vital role that they play in our local economy. It is also an opportunity for city leaders to examine ways to better support small businesses and remove impediments to their success.
I have proposed a number of policy changes that the city should act on to improve our city's business climate and support our small businesses. The benefits of these policies would also extend throughout our economy and job market. These reforms can get San Diego working again.
First, we must improve the city's Business Improvement District (BID) program. BIDs foster an environment in which small businesses thrive, though such activities as expanding parking and organizing promotional events. Funding for the BIDs comes entirely from the neighborhood businesses that make up their membership.
The city's long delays in reimbursing the BID's expenses have created serious cash-flow problems for the BIDs. In order to fix this reimbursement problem, I have proposed replacing the reimbursement process entirely with regular monthly distributions of the businesses' assessments. Fortunately, this fix is progressing through the process in the City Council, and is expected to be resolved without additional undue delay.
Second, I have proposed that the city make the licensing and permitting processes less onerous for businesses, with the goal of conducting 95 percent of all permit and license transactions online within five years. The city should also create a customer friendly "one-stop-shop" in the Office of Small Business. Such an office would eliminate the need for businesses to weave through a maze of different city departments.
Third, we must consolidate the Small Business Enhancement Program (SBEP) grants. These grants are currently spread too thinly, with little accountability for results. The city's support of small businesses could be more effective through better allocation of the grant funds.
Fourth, we must stop unfair government policies that benefit labor unions at the expense of small businesses and non-union workers. For years, the permitting process has been used to coerce Project Labor Agreements (PLAs) that block non-union labor from participating in projects. In some cases, these practices have completely killed projects, costing union and non-union jobs alike.
I have sponsored a ballot initiative to end PLAs, and will continue to fight to end this bad-for-businesses and bad-for-workers policy.
Finally, the city must not increase any taxes or any fees on San Diegans.
Raising taxes or fees would take us in the wrong direction by discouraging investment and job creation.
I was disappointed to learn recently that some realtors were told that they now needed to pay an annual business tax due to an arbitrary and flawed bureaucratic change in city policy.
Realtors are required by state law to work under the license of a real estate broker. Real estate brokers already pay this tax, the "Business Tax." This new city policy creates a double tax that hits many small businesses at a time when they are already struggling. I am committed to working with my colleagues on the council to end this double tax.
We must reform the city's finances, but squeezing more money out of small businesses is the wrong way. Last year I proposed specific reforms to reducing and freezing abusive compensation practices in my Roadmap to Recovery. Some of these reforms are finally headed to voters for approval in 2012 through the Comprehensive Pension Reform ballot initiative.
We should use the occasion of National Small Business Week to redouble our efforts to support the businesses that make our communities work. Now is the time to recognize the impact of city policies on small businesses, and to cultivate the conditions in which small businesses can thrive.
DeMaio is a member of the San Diego City Council, representing Council District 5.