In many ways, small businesses represent the spark of innovation, optimism and hard work for which Americans have become known. That small businesses provide the bulk of jobs and serve as the engine of our economy comes into stark relief during emergencies.
Grappling with the devastation of the Great Recession, President Barack Obama said, “We need to strengthen small businesses, which are the backbone of our economy and critical to job creation and sustained economic growth.” As the coronavirus pandemic rages on, what was true then remains today.
About 87% of Sonoma County’s approximately 19,800 businesses are small, family owned employers. The overwhelming majority of the 266,000-person workforce in Sonoma County has a job at a small business. Even if those data are surprising, I think most people in Sonoma County know that supporting small business isn’t helping the rich get richer, it is building the character of our community and keeping each other employed.
The proof of our community’s support of small business can be seen in how we rally together after disasters. It is sad to say we are good at it now. Just like with fires and floods, our community’s efforts in response to the current disaster offer a ray of hope. People are going out of their way to shop locally, purchasing gift cards in bulk for future use and taking out food instead of cooking at home to help keep their favorite restaurant alive.
Support extends beyond shopping. The good people at Bayside Church donated their time, materials and labor to build parklets up and down Fourth Street for Santa Rosa’s Open & Out program — a wonderful effort to help small businesses in downtown Santa Rosa through partnership with city staff, small businesses, the chamber of commerce and the Downtown District.
Business leaders have also stepped up. Elizabeth Gore’s company, Alice, provided grants nationwide to small businesses. Locally, the Santa Rosa Metro Chamber has distributed well over $100,000 doing the same.
Recognizing that pandemic response was all consuming for local government, small businesses shared the weight. Over the course of several weeks, we formed partnerships with health leaders to develop and offer a framework for reopening our economy led by data and science, focused on protecting the public’s health. Similarly, recommendations for economic recovery have been developed and offered for consideration.
In March, virtually every chamber of commerce and business association in Sonoma County sent a letter to all local and state elected officials laying out what small businesses need to survive. Among the 17 detailed recommendations were:
- Small business loans.
- Emergency grants.
- Expanding government contracting with local businesses.
- Government-funded rental assistance for people out of work.
- Property tax deferral.
- Workforce investment to build skills.
- Innovation grants to adapt business to our new environment.
Other jurisdictions in California took up similar support for small businesses. San Francisco, for example, deferred property tax and set up a small business emergency loan fund within weeks of its shelter-in-place orders.
Yet as we move into the fifth month of this crisis, there is no meaningful action from our local government leaders, despite multiple meetings every week explaining the need. There are some exceptions, the city of Healdsburg dedicated funds for small business loans — something Councilman Jack Tibbetts has called for in Santa Rosa to no avail. Some minor tax collection delays have been implemented for hotels, but little else has happened.
Instead, our elected leaders have increased requirements and costs on small business. For example, the Santa Rosa City Council took up the necessary and appropriate action to close a federal loophole for large employers to provide enhanced sick leave to employees with COVID-19.
However, by unanimous vote, the council extended additional financial burdens to small employers who already provide this benefit, while exempting itself as an employer. Santa Rosa is the only jurisdiction in California — if not the United States — to do so.
Small businesses in Santa Rosa now have an increase in costs of up to $3,100 per employee. When added to the $2,000 already required by the federal government, that totals up to $5,100 per employee, or $100,000 in total for a small business; the expense totals over $250,000 for business with 50 employees.
After being closed for the past four months, most small businesses simply don’t have this kind of extra money available. Small employers critical to our community, including child care providers, have already indicated these additional costs will mean closing their business for good.
Other countries understand the public’s health and the economy are an interrelated system, and they paired strong shelter-in-place orders with robust public investments to keep workforces and wages intact. We didn’t take that approach in the United States. As recently reported by a group of former Centers for Disease Control and Prevention directors, we have politicized our national response.
We haven’t done better locally. So quick to close state and federal loopholes through local policy for other reasons, but stepping up to provide the necessary investments to ensure small businesses survive — and employees keep their jobs — has gone ignored.
Meaningful investment along the lines of what was requested in March would help keep people employed and help our community bounce back stronger. Alternatively, we can continue to align with the current administration and wrongly politicize our response by pitting the economy against health and employees against employers.
I’ll look to the actions, not words, of our elected leaders to show what choice is made.
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