Most California residents know that we are fortunate to have nearly perfect atmospheric conditions in our beautiful state… but our weather is the only good climate to speak of.
The business climate is miserable and nearly unworkable.
According to the latest Federal data, there are 3,320,977 small businesses in California. It’s not enough any more to have a unique idea or recognize an unmet need to start a small business. Coming up with enough capital is always a challenge, but possible for the determined. However, in Sacramento the challenges just keep getting lobbed.
If I want to start my own small manufacturing company in Sacramento, I must first deal with a staggering the twenty-one agencies for permits, licenses and regulatory controls:
- City of Sacramento City Finance, Revenue Department
- City of Sacramento Fire Department: Fire Prevention Inspection
- City of Sacramento Planning Department Land Use Permit/Zoning Clearance
- City and County Police Department Police Regulations/Public Safety Issues
- County Assessor Business Property Statement office
- County of Sacramento Treasurer Tax Collector's Office
- County of Sacramento Environmental Health Department Hazardous Materials/Waste
- Sacramento Metropolitian Air Quality Management District
- California Department of Industrial Relations Air Tanks Permit
- California Secretary of State Corporation, Company or Partnership Filings
- California Department of Fair Employment and Housing
- California Department of Toxic Substances Control Hazardous Waste Facility (two different permits)
- Cal Environmental Protection Agency Industrial Activities Storm Water General Permit
- California Department of Industrial Relations: (OSHA)
- California Employment Development Department (EDD)
- Franchise Tax Board
- US Department of Treasury Internal Revenue Services
- Department of Industrial Relations (Workers' Compensation)
- US Immigration and Naturalization Service (INS)
It is not enough that a small business owner must apply to and work with each of these agencies before starting a business; surprise inspections and unannounced visits regularly occur. Any business owner can enumerate from memory, the audits and inspections they are subjected to: Annual inspections by the Fire Department and/or Fire Marshall, OSHA, safety and liability inspections by Insurance carriers, EPA and Cal-EPA toxic substances inspections, and Sacramento Air Quality Management District for emissions tests, to name just a few. There are surprise spot checks for permits and licenses by the city, county and state, even if there are current permits and licenses in place, as well as highly disruptive unannounced inspections.
One manufacturing owner shared that recently he has been subjected to increased permitting, licensing mandates, pop inspections, and required to obtain additional insurance coverage (terrorism insurance?). The Fire Marshall recently decided that the annual inspections by the Fire Department are not enough, and has conducted several surprise inspections, consequently announcing that he needs to purchase additional permits for paper storage and propane tank usage, replace existing EXIT signs with larger EXIT signs, change the open/close direction of interior doors, stop using extension cords, and the like. The redundancy of their request with Sacramento County and State licensing and permitting is of no concern as long as fees are associated; it is as if orders are coming from the top down in all city agencies to step-up permitting, fines and fees collection. This is mafia-style extortion for hapless business owners to operate in certain areas of certain counties and cities – such as Sacramento.
Another business owner told me that during a recent unannounced insurance inspection to his business, the Insurance company Risk Assessment Manager “recommended” the company move large rolls of paper away from the printing presses, and to take sales reps off the road if they have any moving violations or spotty driving records. City of Sacramento Parking Enforcement department keeps ticketing his trucks… parked on his property.
This is all in addition to all of the annual audits conducted by the IRS, the Franchise Tax Board, the bank, State sales tax audits, Worker’s Compensation insurance audits, payroll audits, and EDD audits, all totaling hundreds of hours of employee time.
The business climate in California is treacherous and unfriendly. The City of Sacramento is no better and is bullying more and more business owners with no concern whatsoever for the cumulative impact of their demands. Existing businesses are struggling to keep their heads above water in an ever-increasing regulatory nightmare, not to mention a particularly hostile economy. Given this miserable climate, who would want to start a business in California, and equally important, who wants to continue doing business in this city and state?
Katy Grimes is a long-time political activist, writer and columnist.