“It’s so difficult to run a business now, and it’s just getting worse.”
That’s according to Brian McDonald, General Manager of Outer Banks Heating & Cooling in Kill Devil Hills, North Carolina, and certainly the sentiment of many other contractors and small business owners. However, some new hope exists for many in the wake of the 2014 mid-term elections. Multiple contractors consider the outcome to be a victory of massive proportions for themselves and small businesses.
Republicans took control of the Senate and increased their lead in the House of Representatives, leaving contractors hopeful for business-friendly changes to taxes, regulations, immigration and healthcare laws.
New hope for a better tomorrow
Results of this year’s election didn’t come as a surprise to Mark Riso, director of government relations for Plumbing-Heating-Cooling Contractors National Association. They did, however, make him extremely enthusiastic about the near future.
His organization is tied into, “business friendly folks, those who will listen to us,” he said, and he believes this current incarnation of Congress will certainly listen to the interests of small businesses.
“I’m looking forward to the 114th Congress,” Riso said. “We’ve been shut out in the past. We don’t want to push our way around. The government should always broker and partner with small business’ interest. That’s what we want to do; become good solid partners, always. We want to help development rules and regulations that the industry can comply with and make more sense.”
Reigning in regulation
Regulations will need to be addressed by this new Congress, Riso believes. He first pointed to the Proposal to Protect Clean Water amendment to the Clean Water Act by the Environmental Protection Agency. This rule looks to redefine the waters of the U.S. in a dangerous way for contractors, he said. The EPA’s website said this rule will clarify that most seasonal and rain-dependent streams are protected, wetlands near rivers and streams are protected and said, “Other types of waters may have more uncertain connections with downstream water and protection will be evaluated through a case specific analysis of whether the connection is or is not significant.”
“We are requesting that they withdraw [the new rules],” Riso told us. “It’s expanding the definition of water — almost anything can be deemed of water of the U.S. to make it more permissible to work with. It expands what we deal with in this country greatly. We’re totally on board with clean water, but it’s a great example of the EPA moving very quickly on something. We’ve worked with the Chamber of Commerce as well to request the rule be withdrawn, and that was just as of last [month].”
Mark Giebelhaus, president of Marlin Mechanical Corp. in Phoenix as well as the government relations chairman for PHCC National, said this Proposal to Protect Clean Water amendment from the EPA would, “kill the new construction industry.”
The EPA is also overstepping their bounds when it comes to proposed new rules for working with lead paint in residential areas, according to Giebelhaus.
“What the EPA regulations are doing is requiring anybody who does work in a house that has had lead paint before to essentially screen off any area where they’re working so none of that lead paint dust can get in the air and harm people,” Giebelhaus said. “It’s such a remote chance that will happen. It’s not based on science. It’s a feel-good thing for them that is going to cost us contractors more money to do our job, therefore costing the customers more money.”
Riso said this rule change is still ongoing with nothing final imminent. In the future, he hopes that EPA hears the voice of PHCC and its contractors when creating and developing rules and regulations.
Even if there are some regulations Giebelhaus wants to see changed, he said the election results would mean good things for businesses. In fact, the newly elected officials give him hope that regulations being written into law by agencies, such as the EPA, will stop.
Ben Friedman, marketing director at Atlas Plumbing Co. in Dallas, hopes that the new election means there will be elected officials who can, “come in and have a backbone, basically.” Friedman said those who were elected need to pay close attention to regulatory agencies and be the watchdogs for small businesses on Capitol Hill.
Regulations have hurt many contracting businesses and customers, Friedman said. One example he noted was the guidelines to increase the amount of insulation on water heaters. While this may increase efficiency in the long run, he said it was done too quickly for manufacturers to properly prepare. This means they will need to change how they produce these heaters, likely making them much wider.
“Most locations for water heater installations are based on older guidelines and regulations,” Friedman said. “[The change] is going to increase the cost of the homeowner to replace their water heater. We’re a little concerned about that.”
Addressing immigration issue
Immigration has been a hot-button issue for years. Friedman would like to see Congress getting a better handle on the immigration issue for the sake of his industry, as he worries that there are too many undocumented workers in plumbing and heating.
“They are getting hired for cheap and don’t know what they’re doing. They are causing issues for homeowners,” he said of illegal contractors. “I think there are business owners, in particular, that are unscrupulous are going to find the cheapest labor possible and hope they don’t get caught by local regulatory agencies for work reform.”
Immigration reform is a big deal to Giebelhaus, as he said both Democrats and Republicans have failed to handle the issue correctly over the years. He does not like the way President Barack Obama is currently addressing the issue but has hope Congress will steer it in a different direction.
Better handle on healthcare
Many contracting businesses have not been happy about the Affordable Care Act and would like to see changes made. McDonald hopes newly elected officials can change some of the aspects of the ACA that he said damage small businesses such as his. Prices for his company’s healthcare went up 34 percent this year, he noted, after consistently increasing 10 to 15 percent each year before that.
“My employees can’t afford the increase,” McDonald said. “For some of them, the older ones, we used to pay 100 percent of employee healthcare. About five years ago, we could no longer afford to do that. Everyone else that came aboard had 50 percent paid. Now, we have people, like a young man who is 34-years-old with wife and daughter. His insurance costs went up from $900 a month to $1600 a month. How does that even make sense?”
Friedman agreed, saying the Affordable Care Act puts businesses like his family business in a tough situation.
“We want to provide benefits for employees, but we don’t want to raise costs just to supplement healthcare benefits,” Friedman said. “Everyone should be paying in. All of the healthy people are paying for the sick people.”
Riso said PHCC and many small businesses he works with are still very frustrated when it comes to exactly what the Affordable Care Act will mean going forward.
“We testified last year,” for healthcare reform, Riso said. “PHCC testified, basically, to say that small businesses are job creators and a lot of what’s coming out of this Affordable Care Act is still up in the air as far as the confusion it’s causing … It’s frustrating. I’m looking forward to them providing information and input as the act is tweaked.”
More communication, conversation needed
One big change everyone is hopeful for is communication and partnership across the political aisles of the new Congress. The current vitriolic atmosphere in politics has not been conducive to helping Democrats or Republicans pass laws. Riso suspects there will be more of an effort by Obama and his administration to partner with Congress in pushing forward new laws.
“People have to get along, without question, but people are elected to govern and I think that’ll have to be the tone for this 114th Congress,” Riso said. “Right off the bat I think we’re going to find a Congress that is a lot more receptive to valuing our input as small businesses into the process.”
One area where both sides would be wise to partner is tax reform. Riso doesn’t believe there will be a large amount of change right away regarding taxes, but he sees the House eventually working with tax reform to help streamline tax processes.
Moving into the future, Riso is looking forward to the PHCC’s spring legislative conference. Here, members will get face-to-face time with industry executives, staff and members of Congress, something Riso says is a great opportunity for small businesses to have their voices heard, as “there’s not a lot of former contractors up there on the Hill.”