We have a month left yet, but there is no doubt who the “Person of the Year” should be in 2020. The Iowa Standard believes it should be the small business owner.
Small business owners in 2020 have endured a year like never before. Just like everyone else, but perhaps on an even grander scale.
The COVID-19 pandemic has led to closures and additional rules and regulations that have hampered opportunity for our small business owners.
Matt Everson, Iowa director for NFIB, noted there are 200,000 registered small businesses in Iowa that employ 650,000 people.
“They really are the lifeblood,” he said. “When it comes down to it, they’re the job creators, they’re going to be the folks taking the risk trying to build their businesses up and hiring new people and innovating. They’re always flexible, they always adjust to the economic times.”
Those small businesses have historically excelled at taking care of their employees and their customers as they know those are their two greatest assets.
“The small business world is always resilient, always looking to innovate and always adjusting to economic trends – they are the ones that are going to bring this economy back,” Everson said. “They’re going to be the ones that either create a new business if their other business kind of goes away or ramp up and build back their original business. Most of these people are entrepreneurs, risk-takers.”
Chris Ingstad, president of Iowans for Tax Relief, highlighted some efforts by the government to soften the blow small business owners have experienced.
He pointed to help recently provided to movie theaters as Iowa Gov. Kim Reynolds still looks for ways to use the dollars from Washington D.C.
“The impact of a forced or mandated closure really hits home,” Ingstad said. “Rather than maybe the state stepping in, because if the state provided some relief it really would just be taking income tax dollars and sending it back to local government, our hope is local governments would trim and maintain everywhere they could instead. That might help ease the property tax burden some too.”
Early in the pandemic, Ingstad said he heard some local governments bemoaning the fact they’d miss out on some fee income and hotel/motel tax revenue. Those local governments were pondering what they’d do.
“I thought, ‘Boy, a lot of small business owners and a lot of employees of small business don’t have another option to turn to,’” Ingstad said. “We’re all in this together. Everybody has got to tighten their belt where they can – governments and individuals.”
While searching for a solution, Ingstad encouraged governments to do no harm.
“Don’t find some new revenue source to keep the state and local governments full – don’t turn to those folks – the last thing they need is a bigger tax bill,” Ingstad said.
A reduction in regulations or loosening of regulations could also help. Ingstad pointed to simple things, like allowing bars and restaurants to provide curbside service and selling alcoholic beverages to go.
“Things like that that can let businesses do business,” he said. “Most business owners don’t want a check from the government, they just want a chance to stay in the fight. Any way that you can allow them to innovate and be creative and go forth is a good thing.”
One positive? Iowa is positioned perhaps better than any other state in the country to weather the economic storm. Iowa’s Republican-controlled legislature, along with Reynolds, has refused to spend all the revenue it receives.
“Coming into this, Iowa’s positioned about as well as any other state in the country. They were able to close the last fiscal year without dipping in and we think we’re going to be able to at least manage status quo next year,” Ingstad said. “That’s where the value of budgeting and keeping the spending reined in starts to pay off.”
Everson said one of the advantages of being with NFIB is having information from every state.
“You can kind of compare notes on how other states are, like out here in Oregon and Washington has been totally devastated,” Everson said. “Most people aren’t even out and about. Another reason we’re lucky is our state is really set up well and our budget is balanced.”
So far, Everson said, revenue is on track for Iowa despite the pandemic. The reserves are filled. If the state does take steps to help, there is just one solution – tax reform.
“That’ll be immediate and really it’s the only thing that helps anybody and everybody in the pandemic is letting folks keep their own money,” Everson said. “But I think our members are pretty optimistic in Iowa. Obviously retail and service are probably a little less optimistic, but a big part of that is people are still not going out and engaging in the economy. That’s another big thing – how do we get those people back into the economy and spending money.
“I think we’re one of the lucky states because I’ve seen other states and I don’t know how they’re going to recover from this.”
Both Ingstad and Everson agreed that Iowa Gov. Kim Reynolds is making a good effort right now to keep as many businesses open as possible.
“Gov. Reynolds is doing all she can to keep as many businesses open and people employed as possible,” Ingstad said. “Frankly, compared to a lot of other states, she really has tried to find that balance of health and safety versus commerce. She did it the first time around too and this time around I think she has realized, which other states have not, if we go to a total shutdown, there may not be an economy to recover.”
Everson said that Iowans should consider themselves fortunate that Gov. Reynolds is not taking drastic measures like many governors across the country.
“It’s a hard needle to thread,” Everson said. “She’s actually done a really good job of trying to thread that needle and trying to keep as much open as possible, especially after that initial shutdown. Nobody knew what was going on there and I think that was everybody’s initial reaction around the world. But she’s held pretty steady in not trying to shut it down again.”
A second round of “massive shutdowns” in Iowa, as other states are experiencing, would be a likely deathblow.
“Small businesses are already barely hanging on,” Everson said. “The last thing they need is another full shut down. I think you would see most of those businesses, especially small mom-and-pop shops, retail, service industry would just go away forever. We’re really lucky.”