BUSINESS PULSE : SMALL BUSINESS IN ORANGE COUNTY : Foes of Tighter Rein on County Growth Outnumber Backers
In late March--after months of deliberation--the Orange County Board of Supervisors adopted a growth-management plan designed to defuse one of the most divisive issues in years.
Had it been up to the county’s small-business owners, however, the plan might not have passed at all.
Exactly half of the 522 participants in The Times Small-Business Survey said they opposed “having Orange County officials place stricter controls on local growth and development.”
Even so, most were willing to spare some change to deal with the consequences of growth: Nearly two in three supported a sales-tax increase to fund road improvements.
On other issues, poll respondents said the general outlook for small business is bright, expressed concern about inflation and interest rates and questioned the effectiveness of the government’s efforts to keep illegal immigrants out of the work force.
The growth-management plan, adopted at about the same time that the Small-Business Survey was sent to business owners, forbids developers to build houses, offices and other buildings unless they first pay to widen roads and otherwise offset the impact.
Among survey participants--who were asked about growth controls in general and not about the plan under consideration by the county--50% said they opposed imposing restrictions. Only 39% favored tighter controls. Another 11% checked the “don’t know” box.
Times pollster Mark Baldassare concluded that small-business owners, many of whom sell directly to the public, believe that controls would mean fewer customers for their restaurants, shops and service companies.
In response to another poll question, for instance, 74% of the owners said population growth would benefit their businesses. Only 17% predicted a negative effect.
Those results are hardly surprising. Outside the building industry, it would be difficult to find a group more dependent on a growing local population.
“I want growth left to the free enterprise system,” said Kenneth E. Stevens, president of Irvine’s $700,000-a-year All Care Services, which provides in-home care to the elderly.
“I don’t like the traffic any better than the next guy on the freeway, but I’ve seen communities where they restricted growth. You get a type of decay there,” said Stevens, who described himself as a moderate Republican.
That feeling is not unanimous, though. Ervin R. Cooley, for example, believes growth in the county has finally gotten out of hand.
“I’m not against a moderate amount of growth, but our public officials are not paying enough attention to how people are going to get in and out of our communities,” said Cooley, president of Fountain Valley’s SBI Inc., a $1.5-million-a-year microfilm company.
“I guess they’re listening to the developers and not to us,” said Cooley, a registered Democrat who said he often votes for Republicans.
Stevens said he was not aware of the county’s new growth management plan; Cooley said he was.
On another public issue, small-business owners said voters should approve a proposed half-cent sales tax to pay for expanding freeways and roads. The poll found that 62% favor such a tax, 33% oppose it and 5% checked “don’t know.”
A measure under consideration by county officials would increase the sales tax from 6 cents on the dollar to 6 1/2 cents and raise about $3 billion over 20 years. But that’s only if it gets on the ballot for a special November election and voters approve it.
The county’s builders strongly support the tax, since it would relieve them of some of the financial burden of building roads.
It would also probably help defuse the local slow-growth movement by offsetting its most effective weapon, the increasingly frequent traffic jams that anger voters.
Slow-growthers defeated a similar tax measure at the polls in 1984. They called it a boondoggle designed to open up more of the county to developers.
Some other recent polls also show voters in favor of a tax increase. But experts say that support may be soft and subject to shifts during a hard-fought political campaign.
Barbara A. Ormand, manager of the Anaheim branch of Pasadena’s $1.3-billion Community Bank, said the bank favors the tax.
“If the congestion gets much worse, it’s going to cause problems for our employees and our customers,” Ormand said. “A tax on everybody seems the easiest and fairest way to get it.”
That is also the perspective of William P. Ficker, senior partner at the $2-million-a-year Newport Beach architectural firm of Ficker & Ruffing.
“I think it’s fairer than a gas tax, for example, because the number of people on the road are probably there in inverse proportion to their ability to pay a tax,” he said.
In other words, affluent county residents often live close to their work and hence, use less gas, said Ficker, who described himself as a Republican. The less affluent often have to commute long distances from housing they can afford to their jobs.
A sales tax could have the same effect, though. The poor tend to spend a proportionately larger share of their money than wealthier people on purchases of items subject to the sales tax. So they still could wind up bearing more of the road improvement burden.
Fairness was also a chief concern of tax supporter Chuck Bearden, president of 3-year-old Executive Horizons Inc., an Irvine placement firm that finds jobs for laid-off executives.
“A sales tax spreads the burden around,” said Bearden. “And it’s a small price to pay compared to our big need for roads.”
All three respondents were aware to some degree of the growing debate over the county’s 20-year transportation plan and the half-cent increase in the sales tax that is supposed to help fund it.
The Small Business Survey questions were designed to elicit philosophical--not highly specific--answers. They do not pinpoint soft support or opposition and should not be considered the final word on attitudes toward these issues.
On the economic front, surveyed small-business owners were guardedly optimistic, much like counterparts at larger companies who have participated in similar polls.
When questioned about the general outlook for small businesses this year, 33% responded “excellent,” 54% “good,” 12% “fair” and only 1% “poor.”
On specific economic issues, 56% of respondents said inflation is likely to have a negative effect on their businesses this year, while 53% felt the same way about interest rate changes.
Only 21% thought that the inflation outlook is favorable, and a mere 14% saw interest rates headed the right way.
The U.S. budget deficit is expected to have a negative effect on small business by 44% of survey participants, while only 4% saw positive movement on that issue. But a majority of 52% said the deficit was simply no big deal for businesses like theirs.
Despite concern in some quarters about purchases of U.S. real estate and business ventures by foreigners, 49% of the poll participants said foreign investment in Orange County should have a positive effect on their firms. Only 9% saw it as a problem.
Survey respondents were skeptical, though, about the effectiveness of the federal government’s recent immigration reform law, which imposed new sanctions against businesses that knowingly hire illegal immigrants.
RESULTS OF GROWTH-MANAGEMENT SURVEY Is Amnesty Law Working ? “From your experience, has the federal amnesty law eliminated illegal aliens from the workplace in businesses such as yours?” No Comment 15% Yes 34% No 51% Business Outlook “What is the 1989 business outlook for firms like yours?” Poor 1% Fair 12% Good 54% Excellent 33% Growth Policy “Do you favor or oppose having Orange County officials place stricter controls on local growth and development?” Favor 39% Oppose 50% Don’t Know 11% Sales Tax for Transportation “Do you favor or oppose raising the sales tax from 6 cent to 6 1/2 cents to pay for Orange County transportation improvements?”
Don’t Know 5% Oppose 33% Favor 62% Growth Policy
Favor Oppose Don’t Know By Industry Retail 43% 43% 14% Construction 13 83 4 Services 41 49 10 FIRE * 27 58 15 Manufacturing 56 30 14 Other 40 42 18
Sales Tax for Transportation
Favor Oppose Don’t Know By Industry Retail 43% 47% 10% Construction 75 25 -- Services 64 27 9 FIRE * 74 24 2 Manufacturing 59 38 3 Other 59 34 7
* Finance, Insurance, Real Estate What Effect ? “What do you think is the likely effect of these factors on businesses like yours in 1989?”
Good None Bad O.C. population growth 74% 17% 9% Foreign investment in O.C. 49 41 10 Value of the dollar 25 51 24 Export opportunities 25 71 4 Inflation 21 23 56 Interest rates 14 33 53 U.S. budget deficit 4 52 44
Source: Times Small Business Poll
