Voters' Voices: Kentucky business owners discuss election issues

gkocher1@herald-leader.comOctober 1, 2012 

  • The views of the candidates

    Here is a look at what the candidates have said about small businesses:

    Andy Barr, Republican candidate in 6th Congressional District

    Barr supports passage of the REINS (Regulation from the Executive in Need of Scrutiny) Act, which would require congressional approval before any new regulation takes effect.

    Barr supports repeal of the Dodd-Frank Act's Wall Street regulatory changes, which Barr says ties up loans to small business.

    And he supports repeal of the Affordable Care Act, sometimes called "Obamacare."

    Ben Chandler, Democratic candidate in 6th Congressional District

    Chandler notes that he is chairman of the Blue Dog Coalition's Task Force on Oversight and Regulatory Review. Its goal is to look at the nearly 8,000 regulations issued each year by the federal government and ensure that congressional intent is appropriately followed. The Blue Dog Coalition is a caucus of fiscally conservative Democrats.

    Chandler supports legislation to tackle the trade deficit.

    And he supported tax deductions for start-up businesses.

    Barack Obama, Democratic candidate for president

    President Obama notes that he signed 18 tax credits to support small business. His administration invested $2 billion in Small Business Administration funding for early-stage businesses.

    The administration also created the $30 billion Small Business Lending Fund to help banks provide more loans to small businesses. But Entrepreneur.com reported that the fund "doled out only $4 billion to banks — and many used the fund to repay TARP (Troubled Asset Relief Program) funds, not lend to small business." TARP was the $700 billion fund used to bail out banks.

    Mitt Romney, Republican candidate for president

    Romney notes that he is the only presidential candidate with experience in the private sector.

    He supports repeal of the Dodd-Frank Act and says he would "replace it with a streamlined regulatory framework."

    Romney would cap new regulatory costs at zero dollars.

    And he supports repeal of the Affordable Care Act, although whether he could do that is in question. Romney himself said in September that he would keep some parts of the law.

  • Editor's note

    This is the first in a series of stories that will look at the election through the eyes of local voters. The stories will run every Tuesday in October.

Small businesses drive the economy. They provide the jobs for 49 percent of private-sector employment, and accounted for 64 percent of the net new jobs created from 1993 to 2011, according to the U.S. Small Business Administration's Office of Advocacy.

So it is not surprising that the economy and jobs are ranked in national polls as the most important issue for entrepreneurs in the Nov. 6 election.

Jeni Gruchow, owner of Fava's, a 102-year-old restaurant on Georgetown's Main Street, said jobs are foremost on her mind when she thinks of the choice between President Barack Obama and Republican challenger Mitt Romney.

"I just hope one of them puts the people back to work, and not let people be out of jobs," Gruchow said. "There's just not many jobs. I tell my employees they need to hang onto the jobs they got because there are 10 people in line to get theirs."

The comments from Gruchow and other owners of retail and service businesses reflect the responses of their counterparts in national polls. More than 6,000 small businesses surveyed in September rated the economy and jobs as the most important issue to them, according to a poll conducted by George Washington University's Graduate School of Political Management. If more people have jobs, they'll have more money to spend, and that will encourage small businesses to hire more people.

Small business owners — and the nation — will watch closely Wednesday night, when Obama and Romney meet in Denver for the first of three face-to-face debates. The vice presidential candidates, Democrat Joe Biden and Republican Paul Ryan, meet Oct. 11 at Centre College in Danville for their only debate.

Business owners interviewed during the past week expressed uncertainty, frustration and cynicism.

Unemployment, taxes, health-care reform, regulations — all were subjects on their minds.

Here's what other small business owners in the region had on their minds:

Danville winery owner Andre Brousseau said putting people back to work has to be the top priority. But he won't hire with so much uncertainty.

"You're afraid to hire because you don't know what's coming down the road," Brousseau said. "For example, with the new health care law, will that affect me and will that affect any employees I hire? And if so, how much is it going to cost me?

"Since I'm not really making enough profit now to handle everything I want to do — and I'm not talking about anything extravagant; I'm just talking about paying the light bill and paying the heat bill — if I can't do that, then I certainly cannot hire an employee to come in. And that is the major problem. As small business people, we have to have income coming in the door to be able to pay employees."

Since the economic downturn began in 2008, Brousseau has laid off two employees in Chateau du Vieux Corbeau Winery's tasting room. That has left Brousseau, his wife and two daughters to keep the business going. Sales are "flatter than a pancake" since the recession began, even though their wine sells for reasonable prices of $9.95 to $20 a bottle, he said.

"In 2008, people were coming in once a week to get a bottle of wine to share with their family," he said. "Then it went to once a month. And now it's special occasions: 'Our wedding anniversary is coming up.' Or 'My husband's birthday is coming up.' It's a totally different proposition than in 2008."

Anthony Hayden, co-owner of Exquisite Belvedere Barber Shop and sole owner of the Lexington Academy of Barbering, said it should be easier for small businesses to get loans.

"Because a lot of times we go apply for a loan, and we're still turned down," Hayden said. He had hoped to get a loan to buy the building he leases for the barber college and to provide financial aid for students, but he has not been able to secure that financing. He opened the college to provide young barbers with the kind of training that benefitted him.

"I'm a veteran and I've tried for loans several times at several banks, and I've tried to use the Patriot (Express Pilot) loan, which they say is available for vets," he said. "And we still get turned down. They say one thing, but when you go apply for it, it seems like you can't get it."

He's right. Since the beginning of the recession, banks have been more reluctant to loan money to small businesses. In 2011, outstanding loans to small businesses reached its lowest volume in five years, according to figures cited by the Small Business Administration.

And while the state reported last week that unemployment dropped in 98 Kentucky counties, Hayden said he hasn't seen an upswing at the barber shop. Customers still prefer to get a cut and a shave for $10 from a student at the barber school rather than pay $20 at the shop, he said.

Tight lending isn't the only indicator of the still anemic economy. Leonard Fitch, owner of Fitch's IGA in Wilmore, sees another. Last year he had to deal with $7,000 in bad checks.

"There are a lot of good people who are giving us bad checks with good intentions, but they're so financially depressed, it's one of way of getting short-term food," Fitch said.

"The court system has been very supportive in trying to collect them, but people don't have any money. You can't get too much out of a stone, you know what I'm saying?"

That situation doesn't help his razor-thin profit margin. Meanwhile, Fitch said the candidates aren't specific in how they would put people back to work. "I think they talk in generalities," he said.

There's a lot of talk about the middle class this season, but it's not substantive enough for Charles Booe, owner of Rebecca Ruth Candy Inc., the bourbon-chocolate maker in Frankfort.

"They need to address the shrinking of the middle class," Booe said. "We have a safety net and we have people who are very well-to-do, and the people in the middle are being squeezed. And that's problematic because it puts more pressure on them and more of them are falling into the safety net, and the safety net is not sustainable as more of our population moves into it."

That's an issue for small businesses, Booe said, "because as the middle class continues to contract, people don't have the money to either purchase products or to maintain a vehicle and get it to work."

Rebecca-Ruth has weathered the recession because of its 93-year history with customers. "We're a third-generation candy maker and we have a multigeneration of followers across the entire United States," Booe said. "So we tend to have a strong er marketing base than many companies. ... If we are doing business with you, we probably did business with your parents and their parents, and possibly their parents. That history helps us transcend a short-term downturn."

Steve Henderson of Caramanda's Bake Shoppe in Lexington said he doesn't expect much change no matter who wins the presidency or control of Congress.

"I'd like to hear somebody say, 'We're going to make these specific cuts, this department, that department, here's how we're going to save money, rather than identify who can we tax more," Henderson said.

Unlike many small businesses, Caramanda's has expanded since opening in 2006. It now has locations in Fayette Mall and on Boston Road, in addition to its original Southland Drive site.

How has a business been able to expand in a recession?

"We're kind of a comfort food," Henderson said. "What we're offering here is a cheap way to feel good for a little bit. And I think a lot of people are not feeling so good, so they come and grab a cupcake and that's not going to bankrupt them."

Ken Gastineau, a maker of silver and pewter jewelry in Berea's Old Town, said more needs to be said about how the country intends to invest in education, specifically the arts in education.

"People need to understand that teaching art and critical thinking and creative thinking isn't a luxury," Gastineau said. "It's part of the basis of our economy."

Advertising, media, movies and architecture all depend on creative thinking, "and if we start cutting that because we think arts are a frivolous part of education, then we're really impacting the economic growth of our nation."

Health reform is "definitely" a concern, too, said Gastineau, 60.

"I mean, my wife and I, we're moving into an age category where if something isn't done, the cost of our health insurance will be greater than what we earn."

Greg Kocher: (859) 231-3305. Twitter: @heraldleader

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