inflation. supply chain. Understaffed. These three things might be the easiest way to sum up his 2022 for small businesses. The National Federation of Independent Business (NFIB) optimism index is still below his 49-year average, meaning business owners don’t have much hope for the future. A lot of this anxiety no doubt stems from discord in Washington, where Congress and the White House are in a constant stalemate. While there is a historic amount of federal dollars available to help local economies revive, small businesses continue to face obstacles. His December employment report for the NFIB shows that labor quality is the number one managerial issue for small employers. And while job openings are down a few points in the same report, his figure of 44% of small business owners said they were unable to fill job openings, compared with his historical average of 23%. far surpasses
Annapolis will undergo many changes as a new Governor, Comptroller, Attorney General, and General Assembly take office. New policymakers no doubt have their own ideas on how to solve the problems facing Marylanders. They have moved from campaigns to policy making, and the NFIB exists as a resource for small businesses to understand what they need from their representatives. Sure, there will be policy disagreements, but we need to keep our focus on improving Maryland’s business climate. Years of progress have been made, but a weak recovery and fears of an upcoming recession are making it difficult for small business owners to attract, hire and retain job seekers. Small businesses are the backbone of the state economy, and anything passed by the General Assembly should reflect that.
The coming year will bring a variety of issues that are important to small businesses. Some have a direct impact on bottom line, while others set the stage for future success or failure. Below are the issues he will monitor closely with the NFIB during his 90-day legislative session beginning Jan. 11.
Four years ago, the General Assembly passed a statewide $15 minimum wage over the opposition of small businesses. Our members fought hard to demonstrate the compounding impact of this move on our ability to run a business. Ultimately, Congress pushed the inappropriate proposal. Despite our opposition to the bill as a whole, the legislator acknowledged some concerns from the business community by adding amendments, meaning companies with fewer than his 14 You can give it more time to pull up to the dollar.
But now, policymakers, including the governor-elect, have indicated their intention to accelerate the phase-in. Moreover, there seems to be a move to tie the state minimum wage to inflation. The state’s gas tax rises each year in line with inflation, jumping 18% last summer. Small businesses cannot afford yearly increases.
Taken together, these proposals would have a very large and devastating impact on small businesses in Maryland.
In fact, small businesses are already voluntarily paying more to attract and retain talent. A net 40% of owners are increasing their pay, according to the NFIB’s November employment report. Arbitrarily raising state minimum wages sooner than our members planned will only hurt the smallest of our businesses. and industries such as hospitality.
If House Bill 698 in 2022 were enacted (which would also raise the minimum wage to $15), small business owners with 15 employees would have to pay $50,000 in payroll costs in the last six months of the year. It jumped more than a dollar. It’s simply unsustainable.
The state’s Unemployment Insurance Trust Fund (UITF) faced unprecedented stress during the pandemic. A record number of claims in 2020-2021 led to a surge in his UI tax for employers, with some seeing a 400-600% increase in taxes in the first quarter of last year. The UI tax rate table has jumped from A (lowest) to F (highest) in 2021. Thankfully, the NFIB, with the help of legislative leaders, the Hogan administration has passed legislation that will reduce the employer tax rate to Table C in 2022 and his 2023. .
The relief may be short-lived, however, as some policymakers are likely to seek an increase in the amount of weekly benefits that claimants can receive.There is also talk of tying benefits to inflation. I have. Following the economic crisis that has depleted the UITF at an unprecedented rate, it is unwise to increase the amount. And tying future earnings to inflation only makes it harder for employers to keep their tax rates low.Remember that in Maryland only the employer contributes to her UITF. Other states, such as New Jersey and Pennsylvania, incorporate worker contributions into the fund. Getting paid more while asking small businesses to pay is a very tough order.
Maryland has a “historic” General Fund surplus. In this session, the NFIB will help improve Maryland by investing this surplus responsibly and wisely to support small businesses and communities, rather than increasing the cost of doing business in Maryland. We work with legislators willing to improve the business environment.
Mike O’Halloran is the Maryland Director of the National Federation of Independent Business.