Corzine puts a squeeze on NJ small businesses

The Democratic squeeze on small business is accelerating. For the last two years businesses that have losses have still had to pay state "income" taxes. Corzine instituted a tax increase by taxing a percentage of revenues instead of taxing "income" which is revenue less expenses.

Now the state is squeezing small businesses by purchasing auto parts from an out of state "big guy". The move will save the state about $2 million this year and Corzine is calling for an expansion in this type of purchasing. "Make no mistake, this concept must be adopted by all levels of government," the governor said during his budget-signing ceremony last month.

As a small business owner myself, I don't have a problem with this saving measure, if it works. A successful small business will find or create niches where it can compete and add value and avoid "opportunities" where they are inherently uncompetitive. They will also avoid "putting too many of their eggs in one basket." I would rather have 100 customers buying $100,000 in product or service from me than one customer buying $10,000,000. If I organize my business around the $10,000,000 customer and lose them, I'm in trouble. Thus, I don't have too much sympathy for fellow small business owners who are losing state business. They made their own bed.

Where I have a problem with the state's cost saving measures is that they are not applied evenly. The state has cost increasing measures built into how they purchase and how they award contracts. "Woman and minority owned businesses" are favored to get contracts even if they are more costly. All government contractors must pay their employees "prevailing wage" for state contracts. "Prevailing wage" is not really prevailing. It is inflated for unions. These programs cost NJ taxpayers far more than the few dollars the state saves with more efficient purchasing measures.

If the state is going to save money by being more "business like," and it should, it should do so across the board, including saving on labor costs.