Legislative Update

The 106^th United States Congress began its session Monday, Jan. 24. The Florida legislature starts its next session March 7. The deadline to file requests for bills to be drafted in Feb. 11.

State and federal lawmakers are expected to tackle a variety of issues this year that could have dramatic implications for employers and business people both locally and nationally. Entrepreneurs and other business people should beware that legislators are likely to address concerns ranging from minimum wage to workforce development to transportation, say spokespeople from the Florida Chamber of Commerce and the United States Chamber of Commerce. Both groups outlined proposed legislation expected to hit the respective congressional floors this year, as well as their positions on the proposals.

Two issues that definitely will be addressed by federal lawmakers are health care and the minimum wage, both of which will have "profound effects" on businesses, says Giovanni Coratolo, director of small business policy for the U.S. Chamber. But with the election looming, he added, "in this Congress, we see very little getting done. The Democrats as well as Republicans will be framing issues for reelection."

Minimum Wage

That's why neither side took a very hard look in the past year at the minimum wage issue, a hot election issue, then brushed it aside until after the holidays, Coratolo says. "They passed the budget, and everyone skated out of town. Democrats wanted to fight that battle closer to the election."

The Democrats want to raise the wage by $1 over two years from $5.15 to $6.15 per hour, he says, and "the Republicans have compromised to $1 over three years. .We do see it passing, although we are totally against raising the minimum wage."

Forcing businesses to pay somebody more money is counter-productive, he says. Employees who measure their worth at work by how much above minimum wage they're getting paid feel undermined when new employees come in at a higher wage and "the government mandating it is not as meaningful as an employer giving it to you."

What's more, he says, payroll accounts for a large proportion of a business's expenditures, compounded by all the extras tied into it, including unemployment compensation, workman's compensation and FICA. When payroll goes up, raising the cost of doing business, an employer has three options: raise prices, lay off employees, or take a smaller profit margin.

Health Care

Coratolo described as an "extremely harsh" version of the so-called "patient's bill of rights" has already passed in the U.S. House, while the Senate is dealing with a "moderated" version. The House version allows patients the right to sue health insurance plans when they cause harm by denying care or providing inadequate care.

Critics of the House version argue that it benefits only the trial lawyers and that it could, in fact, raise the cost of health insurance so that employers would have to quit providing it. "It will drive up the cost of health care," Coratolo says. "It's nice that health care organizations are forced to provide certain benefits, but it does no good at all if you can't afford it" - a position echoed by the Florida Chamber of Commerce.

On the other hand, he says, the House version also includes a bill that would allow associations and groups, such as chambers of commerce, to provide health care plans that fall within guidelines of the Employees Retirement Income Security Act (ERISA). That would allow small businesses to purchase health care plans comparable to those that large businesses are able to offer.

Workforce Development

For businesses, Coratolo says, "The No. 1 concern is the paucity of labor and lack of skilled labor."

That's not only a national matter, it's a hot topic in Florida, where the problem has reached "crisis proportions," according to the Florida Chamber of Commerce. In an annual survey of Florida Chamber members, 82 percent listed the dearth of skilled and qualified workers as their top priority - for the second year in a row, says Steve Liner, vice president of communications. In Southwest Florida, two workforce studies conducted by local economic development organizations showed equally dramatic results at the end of 1999.

"It is very difficult for businesses to find the employees that they need with the skill bases that they need," says Liner. And even if they do find qualified workers, it's tough to get training to help those workers keep their skills up-to-date.

All that affects a company's decision to locate in Florida. In some cases, training is available, Liner says, but sometimes in skills that aren't marketable. He describes the experience a friend in Tallahassee had: The man, determined to make more money while his wife was finishing school, spotted an advertisement for a course in working with fiberglass, a skill that promised to pay well. After spending the money, time and effort, he completed the course with a new skill, only to find that it was of little value in his area. Tallahassee, he learned, has no marine industry and only a few body shops that require fiberglass workers. The few potential employers in the area had waiting lists of would-be fiberglass workers who had been churned out of this course. "There was no reasonable determination of need" before the course was offered, Liner says, and "there was no place my friend could go to find out how many fiberglass jobs there would be."

The Florida Chamber has worked with government agencies in labor and education and is drafting legislation to deal with some of the labor and training problems, Liner says. It addresses four components:

· Consolidating the authority for workforce development, which now falls under a variety of state and local authorities.

· Creating an education system that meets both employers' and employees' needs. It would boost communication between employers and education systems and scrap any training program that doesn't meet a need.

· Establishing a comprehensive, statewide database so employers can find out what training is available and employees can find out what jobs might be available.

· Allocate funding for workforce education. "We have been on a no-growth track in funding for development," he says.

If workers had opportunities to broaden their skills, then they would be able to demand a better salary and raising the minimum wage would become a moot issue, he says. "There is no problem in Florida relative to making proper wages as long as prospective employers have skilled workers. . Our members are telling us there are jobs out there."

Administrative Procedures

The Florida Chamber of Commerce also plans to advance legislative efforts to cut through red tape and give businesses a more equitable footing in disputes with the State.

"When you come to the State with a complaint, it takes a really long time to get these things worked out," says Cindi Marsiglio, the Florida Chamber's director of government affairs. "It's causing a loss of time and industry on both sides."

As it stands, a "legal deference" is granted to the State's position, Liner says. For example, if a business owner wants to challenge a road-widening project in front of his business, he carries the burden of proof under the existing system. "The business has to go in and say why this is not the best decision by the state," Liner says. "There is an assumption by the courts that the state is acting in the overall best interest. We want that deference removed so that, when you go into a hearing process, you're on an equal playing field."

E-Commerce Taxation

With the State of Florida losing an estimated $1 billion in sales tax every year to Internet sales, "the Department of Revenue obviously would like to come up with a solution to that. We are concerned about what that is going to look like," Liner says. "One the one hand, we do not support broad taxation of Internet access," he says. On the other hand, those tax-free purchases from "e-tailers" are undercutting the retailers the Chamber represents.

It's an issue that comes up every year and likely will again this year, so the Chamber will be watching to see what emerges, he says. However, "I don't think that 2000 is going to be the session where we'll see that dealt with."

Transportation

With a bill in the works that would match local transportation dollars with state money, "everything is lining up to make this the transportation session," says the Florida Chamber's Marsiglio.

The state's transportation system is "fractured and severely under-funded," she says. Efforts are underway to address some of the problems that it poses -- not only for residents and visitors, but for business and industry.

Transportation is directly linked to economic development, she says. "It's more than people to work, people to school, and people to church. You see trucks sitting in traffic and every minute that truck is sitting at a toll booth, it's costing money," she says.

Transportation projects are determined by a 20-year work plan, which means that many of those plans take years, even decades, to complete. "It would take $23 billion to complete that 20-year work plan in current dollars," she says.

Money is collected for transportation projects through a number of sources - gas tax, tag fees, rental car surcharge and other user fees - and those revenues go into a transportation trust fund. But "over the past 10 years, the legislature has skimmed out of that trust fund," she says, and the Chamber is lobbying to put a stop to that.