10-point plan to jumpstart Cape Cod's economy

 

Cape Cod's economy is fueled by tourism, retirees, technological and ecological development, health care, and the demands for goods and services related to all of the above.

 

The 5^th Barnstable District reflects these same characteristics and its business community is a roster comprised, almost exclusively, of small businesses.

 

Our focus, as a state legislature, must be on the small business owner. Nationwide, approximately 70 percent of all jobs are created by small businesses; on Cape Cod, that figure is even higher.

 

Rather than repeat the platitudes and talking points that voters seemingly have become immune to, I have compiled a list of specific items that can be embraced and acted on by your state government to improve the overall business climate and expand opportunities for businesses of all sizes across the commonwealth.

 

These actionable items fall into three categories:

 

Health care

• Adopt a 50-employee exclusion (currently ten) for determining which small businesses must offer health insurance. This is consistent with the new federal Affordable Care Act and would allow small businesses to grow beyond ten employees without triggering a huge expense for mandated insurance.
• Abandon the "creditable coverage" standard, which mandates that everyone carry a blue ribbon, bells and whistles policy. We have to wake up to the fact that not everyone can afford the same insurance plan enjoyed by our legislators.
• Implement other measures to reduce the cost of insurance, such as tort reform, standardized electronic medical records, and interstate competition between insurers (a federal issue), to name a few.
• Allow small businesses to band together to purchase health insurance policies as a group. This is a provision that was included in the Small Business Health Care Cost Relief Bill passed in the most recent legislative session. Unfortunately, that bill also included measures to increase government control in this market which, in the end, will drive away competition and increase costs.

 

Taxation

• Roll back sales, meals and personal income tax to 5 percent. Our state government's insatiable appetite for spending resulted in $2 billion of new taxes during the most severe economic recession in decades. That ignores the fact that it leaves less spendable income in the pockets of consumers, who are the life blood of small businesses.
• Reduce corporate income tax to 5 percent. At 9.5 percent, Massachusetts is among the highest taxing states in the country; yet another reason for large businesses to not come here or to relocate elsewhere. These large businesses generate big demand for goods and services from our small business community.
• Reduce the short-term capital gains tax rate from 12 percent to 5 percent. As a CPA, I'm always cautioning my small business owners about the state's taxation of capital gains. This puts the brakes on entrepreneurs who would otherwise expand more quickly.

Regulation

• Open public construction projects to all bidders, not just union shops. The governor claims that PLAs (project labor agreements) account for relatively few of the total contracts awarded by the state. What he doesn't say is that those "few" are the largest projects, accounting for the lion's share of project dollars spent.
• Repeal the Pacheco Law, which bars privatization of state services. Small businesses could certainly benefit if allowed to bid on such things as vehicle fleet maintenance, building management and maintenance, and state park maintenance.
• STOP CHANGING THE RULES (at least changes that make things worse.) The unpredictability of what our legislators have in store for businesses from year to year makes Massachusetts a poor choice for new and expanding businesses.

Illegal immigration is a matter of demand

 

Why they come
Immigrants come to the United States because of opportunity and, in some cases, because of political oppression and persecution which creates their need to seek asylum. Millions of legal immigrants have emigrated from all over the world, carving out their place in society, living productive lives, and through it all, appreciating the personal liberties guaranteed by our Constitution.

No one I know has a problem with legal immigration. For the most part, illegal immigrants arrive here for the same reasons. It just doesn't make sense for them to stand in the long lines at the United States Citizenship and Immigration Services (USCIS) when the alternative is so attractive for two reasons:

1) It's easy to get into the United States. Illegal immigrants from many countries obtain valid visas or travel here on vacation and simply don't leave when they're supposed to. Another option of trekking across the desert wastelands of Sonora, Chihuahua and other abutting Mexican states is a lot more challenging, but certainly exploited as well. I'm sure there's some migration across the Canadian border, but mostly by geese.

 

2) Once here, there are jobs available. This is actually where the problem lies and is often left out of the conversation which is dominated by "seal the borders" and "build a fence."

On the border
As a matter of background, I grew up on the border of Texas and Mexico in the City of El Paso. The Border Patrol agents were always busy, picking up illegal aliens and dropping them back at the Santa Fe Bridge.

One time, Mary and I were watching one of our kids compete in a track meet at Bowie High School when we spotted a helicopter hovering over the stadium and soon noticed a group of undocumented tracksters sprinting through the school grounds with Border Patrol agents in hot pursuit.

The reason these people crossed the Rio Grande was for work. And there was plenty of it available. Yes, some border jumpers were drug runners and coyotes (smugglers of people), but the vast majority of them were day workers who could make as much as a week's worth of Mexican minimum wage in a day in the United States.

Enforcement in the workplace
If we are ever going to get a handle on this problem, we must enforce our immigration policies in the workplace. The flow of undocumented workers will cease when there's no work to be had without proper paperwork.

The two amendments voted on in the Massachusetts legislature this year that dealt with eliminating public benefits for illegal immigrants (one by Jeff Perry in the House, and the other by Bob Hedlund in the Senate) each had a key component that would help us solve the larger issue of undocumented workers, namely the E-Verify System.

I took the training for E-Verify and became certified for its use three years ago when it appeared that it would be a requirement for all businesses over a certain size. In a nutshell, it gives a green or red light to hiring someone. The system works well, provides answers swiftly, and allows for investigating rejections created by errors in the database.

George Bush (43) put the brakes on the mandated use of E-Verify and it has been relegated to the sidelines. That was a mistake, one that has turned everyone's attention to replicating the Great Wall of China from Brownsville, Texas to San Ysidro, California.

We need to revive E-Verify to choke off the demand for illegal immigrants, but that's not the ultimate solution to the problem.

The need for more workers
It is a fact that millions of undocumented workers would be forced to leave the country, not being able to satisfy the requirements of E-Verify. The problem is that certain industries, agriculture and hospitality to name two, would be crippled.

In this recessionary time, many of these jobs would be backfilled by existing unemployed workers; however, when the economy comes around, a vacuum will occur in low skill jobs.

I worked in Midland, Texas, from 1981 to 1985, a time when oil was booming and we used to kid that a secretary was someone who could identify a typewriter. Hotels and restaurants lacked for help because anyone could get a job as an oilfield roughneck or support person.

We see that same problem on Martha's Vineyard and Nantucket--less so now but definitely when the economy was better. Too few people to fill the low skill jobs. A vibrant economy needs people with all levels of skills and abilities.

The solution
A sweeping amnesty is the wrong answer. People who are breaking the law should not be rewarded for it. It's bad policy. If we used this approach to raising our kids, we would have ended up with six hooligans.

The ultimate solution is to clamp down in the workplace to eliminate illegal workers while setting immigration quotas at the proper level to satisfy businesses' needs for skilled and unskilled labor. Then the USCIS must meet the challenge by streamlining the process for documenting enough workers to meet demand.

The road to citizenship, by the way, does not need to be fast tracked. That's really a separate and distinct issue that can be debated on its own merits and modified if it makes sense.

Disconnecting work visa policies from naturalization policies would remove the "third rail effect" when dealing with immigration. That is, immigration reform would not then be all about adding people to the voter rolls. Rather, it would be about filling legitimate needs, getting people out of the shadows, and making our economy and country stronger.

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Outlining several of his legislative agenda proposals designed to lessen the tax burden on small businesses, Hunt called for the removal of the $456 corporate excise tax "floor," lowering state income, meals, use and sales tax rates to five percent, and replacing the twelve percent short-term capital gains tax rate with the ordinary income tax rate.

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Benefits for illegal immigrants?

I find it unconscionable that Massachusetts spends millions every year providing benefits to illegal immigrants while deserving legal residents are forced to stand in line and are being told that the money has run out.

 

Every subsidized public housing apartment, for example, that is currently rented to an illegal immigrant is a unit not available for someone struggling to get his/her life back on track. Agencies are making decisions regarding who receives benefits without utilizing a simple process made available by the federal government to determine if someone is legally present in the United States.

 

As a CPA and payroll processor, I have been trained and certified to run checks using the federal system to determine eligibility for hiring. It is simple, quick and has a process for appealing the determination where an applicant claims that the database is incorrect. The system to be used to comply with Jeff Perry’s amendment is similar and offers the same protections to ensure that eligible people are not rejected by a computer "glitch."

 

It is simply common sense that we should first stop the abuses in our entitlement programs before punishing our legal residents with higher taxes and fees, and slashing local aid to our cities and towns.

 

The priorities of our state legislature must be rearranged.