Central Mass. Companies Keep Watch On Outcome Of Election

When it comes to the issues that sit at the forefront of business leaders' minds in the closing days of this election season, it's almost difficult to come up with something they aren't concerned with.

“They're worried about everything,” said Stuart Loosemore, director of government affairs and public policy for the Worcester Regional Chamber of Commerce.

He said the biggest issue is the cost of doing business and whether it will fall. That includes unemployment insurance, workers' compensation, health insurance, utilities and costs associated with government regulation.

Paula Camara, senior business advisor with the Small Business Development Center at Clark University, said those costs have been causing small business owners to think twice before hiring at a time when the biggest business concern is creating jobs.

According to a recent survey by Thumbtack.com and George Washington University, 52 percent of small business owners in Massachusetts said the most important issue in electing a president this year was the economy and jobs.

“When your retention costs keep going up to keep that employee, you don't have the money to hire the next one,” Camara said.

Beth Proko, who owns used car dealership Mill Street Motors in Worcester with her husband, said health care costs are their top concern.

“What's it going to be like moving forward and how (is) that going to affect the bottom line in businesses? It's going to be a huge thing,” she said.

According to the state's 2006 health care legislation, an employer with at least 11 full-time employees must meet certain contribution obligations or pay penalties to the state. Under the federal Affordable Care Act, that obligation falls on business owners with payrolls of at least 50. Proko said the state mandate has caused business owners to slow hiring.

“When you're struggling to hang on … even if you're not required to pay a certain amount, you still need to pay people enough to be able to afford it and that's a huge thing,” she said. “

On the Massachusetts side, we have developed some programs that are supposed to help you in a small way (to) pay for it, but it's such a small amount when compared to the monthly bill.”

Tighter Regulatory Environment

Although costs associated with employees are the biggest expense for business owners, growing regulation is another costly and time-consuming issue they have been paying close attention to, Loosemore said.

He cited the tighter financial and corporate governance rules associated with the Sarbanes-Oxley Act of 2002, passed after the fall of Enron in 2001 and Worldcom the following year. (Energy firm Enron and telecommunications giant Worldcom filed for two of the country's largest bankruptcies after scandals that brought to light fraudulent accounting practices that lost creditors billions of dollars.)

“Something had to be done to make sure that that stuff didn't happen again, but a lot of those were large companies and smaller companies have to comply with that if they're traded on the market,” Loosemore said. He said compliance with regulations such as Sarbanes-Oxley is costly for small businesses that can't absorb the cost of a legal team as easily as a larger firm might.

Proko said regulations have added to the stress on her business.

“That really has been something that's hit us very hard,” she said. “It seems like there's always some paper here to fill out from somewhere in the government. I get it; you need some forms of regulations, but it's so much that sometimes it takes away from being able to focus on your business.” Some of the burdensome regulations she cited include paperwork regarding employees' health care and “endless” rules surrounding workers' compensation reporting, even if no claims have been made.

Proko said car buyers need to fill out loan applications to help them get financing, and a credit check is involved in the process.

“We also now have to send them a document that says we pulled their credit (even though they gave us permission to do so).”

Rising gasoline prices are another concern for business owners, directly through costs they pay for goods and transportation and more indirectly through the burden they place on customers.

Loosemore said restaurateurs are worried about fuel costs because customers who, for example, come from a town or two away might choose to cook at home instead.

“That's not wrong, but for the restaurant that makes money off of us not eating at home, it makes it more difficult for them to thrive,” he said.

There's a general feeling of wait and see, Camara said. She said business owners aren't making many moves right now because they don't know what will come of the regulations, tax changes, and how much access to capital they'll have with the administration that will be in office after Jan. 20.

“I really think the issue for small business right now, in terms of hiring, is they're trying to get a sense of what the programs are going to be,” she said. “I think everyone is waiting for a solid answer as to what it's going to be because it's been all speculation. Even Congress has everything on hold.”

Camara expects changes to be evident by spring. Meanwhile, Proko hopes changes are coming.

“I think we need to agree to disagree on some things to come up with plans to really move our country forward,” she said. “We've never felt a time when we are so sitting on the edge of our seat waiting to see what's going to happen."

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