In his role as state director of Maryland and Delaware for the National Federation of Independent Business (NFIB), Mike O’Halloran serves as chief lobbyist. He is responsible for NFIB’s mission of promoting and protecting the right of members to own, operate and grow their business.
To that end, O’Halloran lobbies the General Assembly and Gov. Larry Hogan’s administration on small business issues, including tax policy, environmental regulations and workforce guidelines.
Prior to joining NFIB, O’Halloran served as the government affairs manager for the Arlington, Va.-based Air-Conditioning, Heating & Refrigeration Institute, where he lobbied state legislatures on issues impacting manufacturers of heating, cooling, commercial refrigeration and water heating equipment. Earlier in his career, O’Halloran also served as chief of staff to current Maryland Budget Secretary David Brinkley, during Brinkley’s days in the state Senate.
He is a graduate of Salisbury University with a bachelor’s degree in political science.
What is NFIB’s definition of a small business? Is it the same at the SBA’s (which is 500 employees for most manufacturing and mining industries and $7.5 million in average annual receipts for many nonmanufacturing industries)?
We don’t have a particular employee size. We just stress that our members are independently owned and are not publically traded. We have 4,000 members in Maryland (and another 1,000 in Delaware), and 70% of those businesses have 10 or less employees.
Actually, we struggle with that question, because of the moving goalposts we have to deal with. For instance, take the new paid leave bill; businesses are wondering if they have to offer paid leave or unpaid leave because the threshold in the law is set at 15 employees, without regard to whether those employees are full-time, part-time or seasonal. At the federal level, the Affordable Care Act has you believing a “small business” is less than 50 employees because of the employer mandate. It’s very confusing.
At times, I wonder if the state knows the answer to that question. The state doesn’t always offer a clear definition.
What is the NFIB keying on during this year’s session?
Our members can’t afford any more labor laws that make it harder for small companies to make a profit. There are overwhelming costs involved in running a small business that impact employees and customers, too. The owners usually wear many hats, and they need to focus on growing their companies and not dealing with more regulations and more paperwork.
How will federal tax reform affect independent businesses, small and large?
It’s creating record optimism, pay raises, expansion plans, etc., from large corporations, but we have stories of NFIB members doing that, too. That hasn’t been widely reported by the media because the numbers obviously aren’t as big, and because small business owners typically don’t have time to put out press releases. Many of them don’t see the need to toot their own horns, but NFIB wants to make sure their stories receive the attention they deserve.
What are your concerns about the new law concerning mandatory sick leave for employees of small businesses?
Our members got nailed with a doozy earlier this month with the paid leave law. One attraction of working in small business is the flexibility it can often offer. The major concern here is whether some of them will be able to afford it. One of the complaints I hear from members, now that it’s mandated, is that sick leave was intended to be a benefit from (often larger) companies to attract workers. Making it a mandate didn’t really change that fact.
We’ve told the legislature over and over that small businesses that can afford to offer this employee benefit, because it is a benefit, are doing it to attract and retain good employees. Those who don’t offer it don’t offer it because they cannot afford to do it. Mandating it does not change that fact.
Also know that the amount of legislators who own or have run a small business are becoming fewer and fewer, and that’s reflected in the laws that are being passed. Our members are very fortunate to have a governor in Larry Hogan who understands what they have to overcome. More regulation doesn’t make it any easier.
What are your thoughts on a minimum wage hike?
It’s another well-intentioned idea, but as we’ve seen in study after study, it’s not sound policy. That’s especially true in a state like Maryland, where a would-be entrepreneur will look here and see the minimum wage law and the other rules, then not open a business. Or they’ll go over the state line to Pennsylvania, West Virginia or Delaware and do it there.
Want proof? Look at the negative effect the $15 minimum wage is having in Seattle. Small businesses out there are getting walloped. That’s crippling, because small business owners are taking a 50/50 shot in the first place — and many put up their houses as collateral.
What’s your take on the bill requiring that Maryland generate 50% of its electricity from renewable sources by 2030?
There are concerns. The cost of doing business will likely rise, so part of my fear is that there won’t be enough electricity created by the wind and solar sectors to go around. The utilities will have to work that out, but our concern is that NFIB members will have to foot that bill.
What’s the market like for businesses that are looking for workers, particularly service workers?
We conduct our Problems & Priorities Survey, and recently we found that a concern is finding qualified workers. For years, the big three issues have been the costs of health care, regulatory burdens and taxes, but in recent years, finding qualified workers has become another hurdle to success.
How are small businesses attracting and retaining a quality workforce?
They have to find a qualified workforce worth attracting, but you do that by treating employees well via pay structure, benefits and making the best workplace you can. There are plenty of opportunities for a qualified worker.
What government needs to realize is that not every small business is created equally. Still, the government wants to dictate that it knows better how to run a small business without taking into account the balance sheet of every business. And that’s one thing that we keep on telling legislators: Businesses are not one-size-fits-all.
How much are the exorbitant health care costs that many small businesses are paying, or independent workers are paying for, impacting the overall economy?
That continues to be the ultimate concern for small business owners. The average premium for single coverage in a small business is $6,179; from 2006 to 2016, it has increased 47%. As we saw the increase, the number of small business employers who offer health insurance dropped from 56% to 33%. Then you look at the overall picture, and with the ACA Health Care Exchange, premiums are through the roof.
MasterCard and Visa have stated that they can hold merchants liable for credit card fraud if they don’t provide hardware and software to accommodate chip cards and a customer’s account is hacked. But due to costs required to accommodate the new technology, how many businesses are still using systems that only work with swipe strips?
That’s yet another cost of doing business. When they’re left holding the bag through no fault of their own, the costs can add up quickly.
What do you think of Maryland’s reputation for not being particularly welcoming, all things considered, toward business around the rest of the country?
I think it’s a shame, because Maryland has so many things to offer: the Chesapeake Bay; the mountains; Ocean City; Washington, D.C., and its national attractions; Baltimore with the waterfront; Annapolis; big league sports; and plenty of top line entertainment. We mainly need government to get out of the way and just monitor the bumper rails, if you will, and keep everything in line.
For too long, the enforcement regime was used as a stick, rather than a carrot. Under the Hogan Administration, we’ve seen state regulators more willing to educate inadvertent violators, as opposed to levying steep fines.
Are you concerned that the City of Baltimore is going to lose more businesses because it isn’t doing enough to keep the locals and its businesses safe?
Crime is a huge concern to all businesses. Yet, the Baltimore City Council recently decided to increase restaurant regulations and ban polystyrene — the foam drink cups and food containers that you and I are used to using. In other words, the City Council is not concentrating on the impact crime has on small business. What the restaurants need to do is hire people and not have to worry about more regulations.
Since you’re the state director for Delaware as well as Maryland, are you seeing many companies pulling up stakes in Maryland to move to more regulation-friendly Delaware?
We have not been able to put together a study on outmigration, though there are ample anecdotes about businesses doing just that. It happens often on the shore, where people leave Wicomico County (Ocean City), for instance, and move 10 feet over the line to Fenwick Island, Del. So people will do what makes sense for them and their hard-earned employees and dollars.
What are your hopes for the end of Session 2018?
First and foremost, that our legislators figure out that, with the federal tax cut, the federal assessment goes down, and that they ensure that the extra money people will have doesn’t go back out of their wallets some other way. In other words, we need state tax relief, too.