Small-Business People Take Opportunity to Air Gripes to Uncle Sam
Carol Morrow has a few things she wants to tell the White House about the problems facing small-business people.
She knows the woes firsthand, having owned a bath shop in West Covina that failed a few years ago. Morrow, who has plunged into business again as a leasing consultant, blames the closure of her first venture on financing problems, the burden of business taxes and her lack of experience.
Morrow was one of more than 1,000 Southern California small-business people who gathered in Anaheim last Tuesday to give the Reagan Administration and Congress an earful about what bothers them most.
The meeting was the 26th of 57 day-long conferences being held around the country during which participants vote on recommendations and delegates to send to the national White House Conference on Small Business in Washington Aug. 17-21. Tuesday’s session, the only one in Southern California, was the largest so far. A similar meeting was held in San Francisco Friday.
The White House Conference on Small Business is designed to identify the problems of small business and to develop recommendations for government action. In addition, the conference is intended to increase public awareness of small businesses’ contributions to the economy; help small business carry out its role as the nation’s major job creator; review the status of women and minority small-business owners, and examine what happened to recommendations from the 1980 White House Conference on Small Business.
Should Stick Together
“Every business at one time in its life was a small business, and I feel that small-business people should stick together more with each other,” said Morrow, one of the delegates appointed by an elected official--in this case, President Reagan--rather than being elected by conference participants. In all, 1,823 elected and appointed delegates will attend the Washington conference, where they will sift through 2,213 recommendations.
Participants in the Anaheim conference, like those at many of the other meetings held since August, were preoccupied with product liability questions and rising insurance rates. They also were concerned about cutting the federal deficit, simplifying the tax code, providing incentives for investment in small business and increasing opportunities for small business in international trade and government contracting.
“The White House conference is your chance to speak up,” Reagan told participants in a taped message shown at the beginning of each meeting. “We are counting on you to point us in the right direction.”
Such conferences do have an impact on Washington, said Jack Courtemanche, executive director of the White House conference. “I think we can just point to the results of 1980 when there were 60 recommendations and 38 were fulfilled,” he said.
Laws Were Changed
Recommendations from that conference produced, among other things, changes in estate and gift tax laws that make it easier for survivors to hold on to a family business when the owner dies, Courtemanche said. The 1980 session also resulted in changes in government procurement policies giving small business a better shot at contracts, said Courtemanche, former owner of Los Angeles-based Crown Coach Corp., now called Crown Coach International, one of the nation’s oldest manufacturers of school buses.
In all, the Anaheim participants came up with 45 recommendations. One issue that dominated most forum discussions was insurance--or the lack of it at reasonable rates.
Without insurance, most small businesses, especially in the environmental field, are “living at the very edge of disaster,” said David A. Janes, president of California Manufacturing Enterprises in Los Angeles.
For instance, Janes had to pay $55,000 in clean-up charges for a sulfuric acid spill in Burbank. He wanted the government to sponsor a privately funded insurance pool for companies like his that can’t get coverage for cleaning up spills of toxic or hazardous materials, a proposal that didn’t survive the day’s voting process.
Business owners cheered numerous proposals aimed both at regulating the insurance industry and curbing abuses by attorneys, who they saw as winning huge sums and forcing premiums up.
“Attorneys have a vested interest in the fault system,” said Philip A. Toomey, corporate counsel for Office Communications Systems in Santa Monica. He proposed a federal commission to examine the tort system and the liability insurance industry with an eye toward regulating both.
Called ‘Extortion’
Dan Gribble, president of Boatswain’s Locker Inc. in Newport Beach, charged that the insurance industry practice of suddenly raising rates or canceling policies on short notice is “essentially extortion.”
“I had no claims this year (1985) and yet my insurance premium went up 70% even after I reduced coverage and raised my deductible,” Gribble said. Participants recommended that Congress enact emergency legislation that would require insurance companies to notify policyholders at least 120 days before they cancel or renew insurance policies.
The growing federal deficit also drew much attention.
“I think deficit reduction, apple pie and motherhood all go together,” said Charles Huxtable, president of Impression Die & Tool Corp. in Santa Fe Springs. Participants agreed that the deficit should be reduced through federal spending cuts, a line-item presidential veto and support of the Grace Commission’s cost-cutting recommendations.
But not everyone was pleased with the conference or was confident of influencing governmental policies. Some attendees said the proceedings were “too political” and that intense campaigning by more than 300 hopefuls for 47 delegate spots for Southern California resembled a high-school election for student body president.
Participant Disappointed
“I was a little disappointed,” said John Albin, owner of Prime Engineering in South El Monte.
“Most of the time people were talking about things akin to turning the Washington Monument upside down,” he said. “I’m not sure that a march on Washington by a bunch of amateur politicians will get the message across.”
But Frank Swain, chief counsel of the Small Business Administration’s Office of Advocacy, urged the small-business people not to sit by quietly.
“Small business really does deserve more attention at all levels of government but it’s easy to dismiss them because (elected officials) say it’s too messy out there and too hard to find out what they (small-business people) want,” Swain said. “If I’ve learned one thing in working for small business it’s that the squeaky wheel gets the grease.”
Times Staff Writer James S. Granelli also contributed to this story.
