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Business Journal • February 2013
Local effect of the ‘fiscal cliff’ By Al Higgins
When Congress and President Obama finally got around to working out a deal on the fiscal cliff they touted their cooperation and how they had succeeded in avoiding going over the cliff. After all their backslapping and praise for one another it’s time to take a look at just what was accomplished and how the new law is going to affect small businesses. While taxes were increased for those making more than $450,000 a year, taxes were also increased on nearly every other working American. The so-called tax holiday, that reduced payroll taxes by 2%, was lifted, meaning that Americans earning $50,000 a year can expect a tax increase of about $1,000. Unfortunately, as with the passing of most bills in Congress, this one was also loaded with expensive and questionable perks. The U.S. Chamber of Commerce states that a majority of small businesses think the economy is on the wrong track. Most of the uncertainty comes from concern over the implementation of the healthcare law, according to a survey by the U. S. Chamber of Commerce. The chamber states that despite the recent congressional agreement on some tax and spending policies, busi-
nesses say uncertainty is being churned up over concerns about the economy, debt and deficient issues, as well as implementation of the healthcare law. The U. S. Chamber of Commerce also states that their survey shows that more than one half of U. S. small businesses have not hired in the last year, and two-thirds plan to keep the same number of employees in 2013. Among small businesses, 86 percent say regulations, rules and taxes will harm their business, and health care regulations are their prime concern in addition to labor rules and environmental laws. The overall small business climate appears bleak. Of those surveyed, 82 percent think the economy is on the wrong track, 54 percent expect the climate for small businesses to deteriorate in the next two years and 88 percent they are looking for more certainty and not more assistance from Washington. Additionally, three in four small businesses expect the Affordable Health Care Act will increase their costs. Only 5 percent expect the law to make health care more affordable. Also, 71 percent said the act will end up making it harder for them to hire more workers. The total impact on local businesses was yet to be determined, and there are still many issues that Congress has yet
to address, such as Medicare, Medicaid, Social Security and the defense budget. With that in mind, a couple of local businesses shared what the impact of the recently passes fiscal cliff legislation will have on them. Steve Romney, president and CEO of Millenium Microwave, has concerns about Congress’s inability, or unwillingness, to pass the defense budget. “Nearly 100 percent of our business involves projects dealing with the defense of our country. We need strong direction from Washington. One of our largest customers is Lockheed and we have been supplying electronics for the B-2 bomber to them for several years. Without a budget in place Lockheed is not going to be ordering electronic equipment.” Romney added that the whole defense industry is in suspension awaiting action from Congress. Susan Purnell, owner of Kuhn’s Jewelers in Salisbury, has not felt the impact of the legislation. “We have not hired anyone in quite a long time and don’t see any need to do so in the near future. The jewelry business was pretty much unaffected by the fiscal cliff agreement.” The general consensus of those businesses contacted is that unless the nature of the business is specifically affected by the legislation then there has been little affect to date.
Career Day needs presenters
The Salisbury Area Chamber of Commerce Young Professionals Committee in partnership with the Wicomico County Board of Education, and Salisbury University is organizing the 7th Annual Career Day for all Wicomico County high school freshmen. The event will be held at Salisbury University on Tuesday, March 19, and will include presentations from a wide variety of professions. Students will select four career presentations of their choice from nearly 40 different career tracks, allowing them to explore different career options. Presenters are needed from all fields to introduce students to the many opportunities available after graduation. As a volunteer presenter, you will be asked to share your experience and knowledge related to your career area - how you got here, what is involved, a typical day, educational requirements, tips and lessons learned. Each presenter will be given their own classroom with audio/visual capability and classes will have a maximum of 30 students per session for 20 minutes. There is a morning schedule and an afternoon schedule, each with 4 periods. If you are interested or would like more information, contact Sophia Smecker at the chamber at 410-7490144 or sacc@salisburyarea.com. Sponsorship opportunities are available and range from $100 to $500. Contact the chamber for more information.