Voting shouldn't take half a work day

Electronic voting machines were supposed to make going to the poll and tabulating the results faster with less potential for fraud.  Not here in Richland County, South Carolina.

Widespread failure of machines and too few poll workers caused most voters in this county, home of the state’s capital city, to wait 2, 3, even 4 hours to get through the process yesterday.  Many voters simply couldn’t wait in line that long and didn’t cast their ballots.

Employers, especially small businesses, while wanting their workers to vote were rightfully angry that their employees were off the job for hours.  Workers standing in long lines are workers not doing the jobs their being paid to do.  Every voter standing in line for that long is a potential customer not shopping at a local business.  Every business owner standing in line that long is an entrepreneur not watching the “store”.

Obviously the same problem occurred in precincts across the country yesterday.  Where it happened my guess is that the voters put through this torturous process or who were disenfranchised would have preferred the old paper or punch card ballots with more poll workers on duty.  We actually can track ballot boxes with GPS now so losing them would not be an issue.  As for ballot-stuffing fraud, at least we can investigate that and hold people responsible.  The potential for hacking into electronic voting machines is real and is much harder to prove.

For all the money governments have poured into this new voting technology, the machines fail at far too great a rate for a piece of equipment only used a couple times a year.  And don’t blame the operators.  They might be too few but the machines fail in every precinct.  One at mine precinct was down and I was one of the first to vote. 

If we really want citizens to exercise their right to vote, then we need to make the process simpler and throw out the technology that isn’t doing the job.  I will be very interested to see the analysis of New Jersey’s forced experiment with email and fax voting. 

The big voting machine manufacturers will fight against alternative voting methods but we have listened too long and spent too much money on their promises of voting simplicity and efficiency. 

We didn't vote for this

The opinion editorial below ran on the Huffington Post and The Hill yesterday.
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We Didn't Vote for This

by Frank Knapp, Jr.

Whether Americans voted for Republicans or Democrats in the mid-term election, one thing is clear: Voters were demanding that Congress focus intensively on job creation on Main Street -- not lobbyists and campaign donors from big business and Wall Street.

Apparently, many in Congress and President Obama, if recent reports are true, either didn't get the message or simply don't care now that the voting is over.

The top legislative priority of the newly "Tea Party-empowered" during the lame duck session is hardly what Tea Party insurgents had in mind. The proposal is to (1) increase the national debt by borrowing $700 billion to $1 trillion over the next 10 years; (2) spend the money on big, non-job producing tax cuts for the wealthiest 2 percent of Americans; (3) use small business as the excuse.

This bad-business proposal is now being pushed in Congress and the media by those advocating extending the Bush-era tax cuts to the top two income brackets. While proponents acknowledge that less than 3 percent of the taxpayers who would receive the tax cuts actually have some business income, they insist that these approximately 900,000 taxpayers are the very successful small business owners who will stop hiring and purchasing if they don't get their tax cut. Wrong, wrong, wrong.

First, almost all real small business owners are middle-class Americans with middle-class incomes. Walk down any Main Street and you won't find small business owners netting over $250,000 a year in profit (dollars remaining after the cost of employee wages and other business expenses are deducted from taxable income).

These middle-income, Main Street small businesses are the ones we really need to help create the new jobs to lift us out of this down economy There is absolutely no evidence that the wealthiest small business owners create more jobs than those in any other tax brackets. As any small business owner knows, the number of employees does not correlate with profit.

So who are these mysterious high-income "small business" taxpayers in the top two brackets who Congress is considering borrowing hundreds of billions from foreign countries in order to give a tax cut?

Very few of them are what most would consider small business owners. They include partners in large corporate law firms, hedge fund managers, K Street lobbyists, high-powered consultants, Wall Street bond traders and the country's wealthiest millionaires -- all of whom claim some business income and thus are counted in IRS eyes as small businesses. These aren't "mom and pop" businesses, says Adam Looney, senior fellow at the Brookings Institution.

Not only are the vast majority of these 900,000 "faux" small business taxpayers not involved in job hiring decisions, the tax cut won't even cause them to significantly increase their personal spending to create the demand for new jobs.

The non-partisan Congressional Budget Office (CBO) evaluated 11 policy options in terms of boosting economic growth and creating jobs. It found that "policies that would temporarily increase the after-tax income of people with relatively high income... would have smaller effects because such tax cuts would probably not affect the recipients' spending significantly."

The wealthiest American's are more likely to save their money from a tax cut rather than spend it, according to Moody's Analytics, Inc.

If we really want to give a tax cut that will create jobs, then we could cut employer payroll taxes on businesses that actually increase their workforce. The CBO estimates this would have six to eight times as much job-creating impact as an income tax cut.
Alternatively we could create more customers for our small businesses through infrastructure projects, many of them long overdue upkeep or modernization, or keeping teachers and law enforcement officers working rather than laid off.  The policy the CBO found with the biggest bang for the buck is extending unemployment insurance -- a direct infusion of money into local economies by people buying for their basic needs.

Increasing the nation's deficit while not saving or creating jobs is just more politics as usual in Washington where those with the most money get rewarded with even more money.

Congress needs to hear this loud and clear. These high-end tax cuts serve K Street lobbyists not Main Street shop owners. Politicians should not use us to justify a very bad business decision.


More than just an election this week

I was a little pre-occupied this week so I’m late with this blog.
A little thing like an election sucked some energy out of me as it did most folks. But I was involved with some positive activities.

My declaration expressing support for the Environmental Protection Agency’s power to regulate greenhouse gas was filed along with similar support messages from 38 other state agencies, conservation groups and business organizations, such as Small Business Majority and Mainstreet Alliance.

I, Frank Knapp, Jr., co-founder, president and CEO of The South Carolina Small Business Chamber of Commerce, make this Declaration in support of the response filed by the Environmental Defense Fund, the Natural Resources Defense Council, and other environmental intervenors in opposition to motions filed by various parties to stay various actions of the U.S. Environmental Protection Agency (EPA) relating to the control of greenhouse gas (GHG) emissions under the Clean Air Act. The purpose of this Declaration is to express The South Carolina Small Business Chamber of Commerce’s support for EPA’s decisions to move forward with controls on emissions of GHGs under the Act and to oppose motions to stay EPA actions in order to further delay implementation of the Act as to GHG emissions. Read more…

I also submitted a letter to the Internal Revenue Service in support of a citizen’s complaint against the U.S. Chamber of Commerce.

On behalf of the South Carolina Small Business Chamber of Commerce, I am writing to urge you to take prompt action on the letter filed on October 18, 2010 by U.S. Chamber Watch, the Center for Responsibility and Ethics in Washington, and Corporate Ethics International. The letter describes a series of troubling transactions between the Starr Foundation, National Chamber Foundation (NCF), and U.S. Chamber of Commerce, and raises serious questions about whether these organizations knowingly structured their dealings to facilitate the covert use of charitable funds for significant non-charitable purposes – including electioneering by the U.S. Chamber and the payment of excessive compensation to its CEO, Tom Donohue – in violation of the federal tax rules. Read more…

It was a busy week.

Small Business & the Next Governor

The South Carolina Small Business Chamber of Commerce (SCSBCC) today released an assessment of the three candidates running for Governor—Rep. Nikki Haley, Sen. Vincent Sheheen and Dr. Morgan Reeves. The assessment was based both on specific critical legislative votes and a questionnaire sent to each candidate on July 7, 2010. The questionnaire can be found at http://www.scsbc.org/issues.aspx?article_id=883.

While the SCSBCC does not endorse candidates for any office, it is educating the small business owners in the state as to how small business-friendly each candidate has been to date and might be in the future if elected.

“It is important that small businesses have a good understanding of how the election of the next Governor might affect them,” said Frank Knapp, Jr, president and CEO of the SCSBCC. “In 2002 we were in our infancy as an organization and thus not in a good position to evaluate Gubernatorial candidates. As a result, what many small business owners thought they were getting with Mark Sanford did not pan out.” Mr. Knapp’s blog on this issue can be read at http://www.unconflictedsc.com/2010/06/sheheen-haley-sanford-endorsement.html.

Summary and Assessment

Below are the detailed results of our questionnaire and review of critical legislative votes.

Because both Rep. Haley and Dr. Reeves failed to respond to our questionnaire, they have deprived small businesses the opportunity to compare the candidate’s positions on extremely important small business issues. Dr. Reeves, the candidate of the Green and United Citizens Parties, might receive a pass on this matter due to lack of resources. However, there is no excuse for Rep. Haley’s unresponsiveness to a questionnaire from a statewide small business advocacy organization with thousands of members that has successfully represented the interests of small business in the Legislature and in regulatory matters for over 10 years.

Sheheen @ Wateree River Sweep

Sen. Sheheen should be applauded not only for responding but also because his comments reflected an appreciation for not increasing health care costs to small business, projecting leadership in creating alternative energy jobs, and promoting comprehensive tax reform and reducing small business property taxes. Most importantly, Sen. Sheheen recognizes the importance of small business growth and development and proposes a Division of Small Business and Entrepreneurship within the Department of Commerce.

A review of critical small business votes indicates that both Rep. Haley and Sen. Sheheen have casts numerous votes in support of matters strongly favored by the SCSBCC.

However, Rep. Haley has demonstrated that she has been willing to forgo supporting small business in the case of affordable health care insurance when it was tied to a tax increase on cigarettes. Since 2006 she has voted multiple times against such legislation that was specifically targeted to help small businesses. Confusing the understanding of her votes is Rep. Haley’s apparent recent endorsement of increasing the sales tax on groceries thus indicating that she is not universally opposed to raising taxes.

One of the most important questions Rep. Haley did not respond to was our inquiry of her support for establishing a small business division within the Department of Commerce not only to give Commerce a small business development focus it has never had but also to provide assistance to local communities to help make them more small business friendly.

Sen. Sheheen strongly endorsed such an initiative. Rep. Haley’s silence causes great concern given her public statements about economic development. These statements appear to completely ignore the important role of small business and possibly demonstrate a lack of knowledge about small business.

Rep. Haley’s primary economic development campaign promise is to eliminate the corporate income tax. She no longer talks about her earlier promise to reduce small business income taxes.

Image: Haley's Facebook page

Growing our small businesses and encouraging entrepreneurship apparently are no longer an important part of Rep. Haley’s economic development plan, even though over 60% of all new jobs come from small businesses. Instead, she promises only more of the traditional, and not very successful, economic development strategy of recruiting big business.

That is the essence of her “elimination of corporate income tax” pledge. For the uniformed, and possibly this might apply to Rep. Haley, very few small businesses pay corporate income taxes because they are not C-corporations. The elimination of corporate income taxes will not help our small businesses. Instead, it would create an unlevel playing field between big and small businesses on income taxes.

In 2005, after a major legislative battle with Governor Sanford, the SCSBCC scored one of its most significant victories in having the income tax paid by small businesses reduced from 7% to 5% primarily to achieve parity with big business C-corporations.

There is an underlying problem with Rep. Haley’s unresponsiveness to the questionnaire and her campaign’s lack of courtesy in failing to even notify the SCSBCC that they would not be responding. In the past, Rep. Haley has demonstrated this same lack of respect for the SCSBCC in her refusal to meet with the SCSBCC to discuss legislation. This is the same path Mark Sanford took with the SCSBCC, refusing every request for a personal meeting.

It is possible that Governor Sanford and Rep. Haley both believed that they already had the answers to all the state’s problems and didn’t need to listen to alternative opinions. Unfortunately, we know that this gubernatorial attitude failed our state over and over during the last 8 years.

Questionnaire Response

Haley: Unfortunately, Rep. Haley did not return the questionnaire. To insure that her campaign received it, the questionnaire was hand delivered to her campaign communication director, Mr. Rob Godfrey, on July 27, 2010. The SCSBCC did not receive a response by the due date of August 2, 2010, or a request for an extension. No contact from the Haley campaign has been received by the date of this release.

Sheheen: Senator Sheheen did respond to the questionnaire but requested an extension to do so. His response was received on August 17, 2010. Senator Sheheen addressed each of the areas of interest—healthcare, energy, taxation, and economic development. Although some specific questions within these areas might not have been addressed, his answers did sufficiently address the issues to allow for analysis.

Senator Sheheen’s response can be read at http://www.scsbc.org/issues.aspx?article_id=882.

Image: Reeves' website

Reeves: Dr. Reeves called our office immediately upon receiving the questionnaire promising to provide a response. A series of e-mails were received with responses but subsequently, Dr. Reeves contacted our office again to ask us to disregard those responses that were prepared by a volunteer consultant no longer with his campaign. No further communications or response to the questionnaire was received. Consequently, we must consider Dr. Reeves not to have responded.

Critical Legislative Votes

Since 2005, Rep. Haley and Sen. Sheheen haves taken votes on certain legislation of extreme importance to South Carolina small businesses. Dr. Reeves has not served in the South Carolina Legislature and thus is not included in this analysis. Below is an explanation of these critical votes and whether the candidates supported these bills.

2005—The SCSBCC supported job tax credits for small businesses so that the hiring of as few as two new employees would qualify many of the state’s small businesses for this economic development incentive. These job tax credits had never before been available to small business. Both Rep. Haley and Sen. Sheheen supported this bill that passed both chambers.

2006—The SCSBCC was the primary business organization supporting an amendment to the state budget that would have increased the cigarette tax from 7-cents per pack to 39-cents. The additional revenue would have been used as a Medicaid match to give premium assistance for small businesses providing health insurance to employees with family incomes of up to 200% of poverty. This effort to reduce the cost of small business health insurance failed. Rep. Haley voted against the budget amendment. Because the budget amendment failed in the House, it did not come up for a vote in the Senate.

2007—The SCSBCC was the primary business organization supporting the establishment of a $1000 tax credit per new employee in a Registered Apprenticeship program. Rep. Haley supported the bill. The Senate passed the bill on a voice vote.

2007—The SCSBCC proposed reform in the state’s workers’ compensation insurance law that would require the state to regulate how much an insurance company could build into the premium for profit, taxes and other expenses. The non-regulation of this Loss Cost Multiplier component of premiums had cost businesses over $200 million in excess premiums over several years. The bill that contained this reform passed with the support of both Rep. Haley and Sen. Sheheen.

2007—The SCSBCC was a strong supporter of increasing funding of the State Child Health Insurance Program to extend Medicaid to the children in families with incomes of up to 200% of poverty. This change would help make health care more affordable and reduce health insurance costs for small businesses by helping to stop health care cost shifting from the uninsured to the insured. The Legislature passed this bill but Governor Sanford vetoed it. Both Rep. Haley and Sen. Sheheen voted to override the Governor’s veto.

2007/2008—In 2007 the SCSBCC and a growing coalition of business organizations supporting an increase in the state’s cigarette tax to provide more affordable health insurance for individuals and employees. The House passed its version of the program in 2007 with Rep. Haley voting against the bill. In 2008 the Senate passed its version of the bill calling for a 50-cent increase in the cigarette tax to be used in a non-Medicaid premium assistance program for small employers offering health insurance to workers below 200% of poverty. The state’s Medicaid program would also be expanded to parents between 50% and 100% of the poverty level. Sen. Sheheen voted for this bill. Governor Sanford vetoed the bill and Rep. Haley voted not to override. The House sustained the Governor’s veto thus no Senate vote was held.

2008—The SCSBCC first identified in 2003 the problem with excessive amounts (approximately 42%) of our state procurement dollars going out of state to purchase goods, labor and services. As the primary advocate for procurement reform that would result in more procurement dollars staying in our state to benefit our small businesses, legislation was crafted for the SCSBCC by the Budget and Control Board and introduced by Republican leadership in the Senate (Leatherman) and in the House (Harrell). The Legislature passed the Senate bill but the Governor’s veto failed to be overridden in the House. Both Rep. Haley and Sen. Sheheen voted to override the Governor’s veto.

2009—The exact same procurement reform bill passed in 2008 but stopped by a gubernatorial veto was reintroduced in the Senate by Senators Knotts and McConnell and in the House by Speaker Harrell and Rep. Mac Toole. The Senate bill was passed by the Legislature and vetoed by the Governor. Both Sen. Sheheen and Rep. Haley voted to support the successful override of the veto.

2009/2010—The SCSBCC once again joined the even greater chorus of organizations supporting an increase in the cigarette tax. In 2009 the House passed a 50-cent increase in the cigarette tax with the new revenue used for a tax credit for small businesses providing health insurance to low income employees, a tax credit for low-income individuals purchasing health insurance directly and premium assistance for those wanting to enroll in the state’s high-risk health insurance pool. Rep. Haley voted against this bill. In 2010 and in recognition of the new national health care law which created a small business health insurance tax credit program, the Senate passed a 50-cent increase in the cigarette tax with most of the funds going into a Medicaid Trust Fund to make health insurance more affordable for low-income South Carolinians. Sen. Sheheen voted for the bill. Governor Sanford’s veto of the bill was overridden with Rep. Haley voting to sustain the veto and Sen. Sheheen voting to override.

Gubernatorial Endorsement?

"Are you going to come out in support of Vincent Sheheen?"

That was the question raised to me yesterday in a telephone call from a friend. After all, the State Chamber re-upped on their Sheheen endorsement this week.

“No,” I said, “the Small Business Chamber doesn’t endorse candidates.”

That has been our position since I co-founded the organization ten years ago.

That policy has served us well over the years. While we side with or against elected officials on particular issues, we try to keep our efforts issue-oriented and not make permanent enemies. Well, unless it becomes obvious that the public official has absolutely no interest in our positions or having a positive relationship.

That’s eventually what happened with Governor Sanford. After he was first elected, we tried very hard to forge a positive relationship with his office. But after a few years, it became clear that Sanford had no real interest either in working with us or in taking on any initiatives to really help small business. The gloves were off from then on. But our organization still didn’t endorse his re-election opponent.

Did we make a mistake then and are we making a mistake now? I don’t think so. But we probably should have done more to check how Sanford voted in Congress, put him on the record with questions and then informed the small business community of what we found out before he was first elected Governor.

So that’s what we are going to do with both Vincent Sheheen and Nikki Haley. That is what the small businesses of this state deserve—to be informed by an organization fighting for their best interest every day. That’s what we do because we are "The Advocate of South Carolina Small Business".