"Economy cools small-business climate"

SF Examiner, March 14, 2008

by David Smith

Even for gas station owners, economic times
are rough.
David Sahagun has owned the Chevron station
at Castro and Market streets since 1979 and the
Chevron on California at Steiner streets since
1992. With prices up, it means his costs go up as
well, meaning he has less money to replace equipment
and supplies.
Sahagun, 55, was one of 190 small-business
owners in The City who took part in the recent
Small Business California survey, which took the
temperature of 629 small business owners across
California.
The results were cool at best, with 62 percent
saying California is heading in the wrong direction
and 66 percent calling the business climate
for small business in the state “poor” or “very
poor,” according to the data.
“I’m very pessimistic,” Sahagun said. “Our main
problems are costs that are just out of control.”
The survey was the fourth annual analysis put
together by Small Business California, a nonpartisan
business-advocacy organization located in
The City. Every county in the state is represented
in the survey.
Scott Hauge, the president of Small Business
California, said the pessimism about owning a
small business in the state stemmed partially
from a feeling the voices of small business go
unheard in Sacramento and the high cost of doing business in the state.
 

Mayor Gavin Newsom said Thursday that The
City could not compete as the cheapest place to
do business and should not because it would “take
away all the advantages of doing business in San
Francisco.”
“One could extend that out to the rest of the
state. We won’t be the cheapest state because we
provide so much more than other states,” Newsom
said. “And what that does is invite a work
force that’s second to none in the country.”
Because of the high cost of doing business in
The City — which stems in part from high property

costs, a high minimum wage, paid sick leave
and mandated employer fees for health care —
a small-business assistance center and several
tax reduction programs, such as the green tax
and biotech tax credit, have been implemented,
Newsom said.
But it is tough to get over those taxes and fees,
Sahagun said.
“The pressures put on by government mandates,
taxes, fees and regulations are just
becoming overbearing,” he said.
dsmith@examiner.com

Business priorities
Top 10 concerns for California small businesses
Percent calling
Issue it a top priority
Rising cost of health care 86
Quality of education 75
Infrastructure (roads etc.) 71
Regulations 63
Energy 62
Taxes 57
Procurement 54
Immigration 53
Workers’ compensation 52
Access to capital 50
Source: Small Business California survey