[House Hearing, 115 Congress]
[From the U.S. Government Publishing Office]
THE PERSPECTIVE OF RURAL SMALL BUSINESSES IN NORTH MISSISSIPPI
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HEARING
BEFORE THE
COMMITTEE ON SMALL BUSINESS
UNITED STATES
HOUSE OF REPRESENTATIVES
ONE HUNDRED FIFTEENTH CONGRESS
SECOND SESSION
__________
HEARING HELD
JUNE 18, 2018
__________
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]
Small Business Committee Document Number 115-079
Available via the GPO Website: www.govinfo.gov
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HOUSE COMMITTEE ON SMALL BUSINESS
STEVE CHABOT, Ohio, Chairman
STEVE KING, Iowa
BLAINE LUETKEMEYER, Missouri
DAVE BRAT, Virginia
AUMUA AMATA COLEMAN RADEWAGEN, American Samoa
STEVE KNIGHT, California
TRENT KELLY, Mississippi
ROD BLUM, Iowa
JAMES COMER, Kentucky
JENNIFFER GONZALEZ-COLON, Puerto Rico
BRIAN FITZPATRICK, Pennsylvania
ROGER MARSHALL, Kansas
RALPH NORMAN, South Carolina
JOHN CURTIS, Utah
NYDIA VELAZQUEZ, New York, Ranking Member
DWIGHT EVANS, Pennsylvania
STEPHANIE MURPHY, Florida
AL LAWSON, JR., Florida
YVETTE CLARKE, New York
JUDY CHU, California
ALMA , North Carolina
ADRIANO ESPAILLAT, New York
BRAD SCHNEIDER, Illinois
VACANT
Kevin Fitzpatrick, Majority Staff Director
Jan Oliver, Majority Deputy Staff Director and Chief Counsel
Adam Minehardt, Staff Director
C O N T E N T S
OPENING STATEMENTS
Page
Hon. Steve Chabot................................................ 1
Hon. Trent Kelly................................................. 3
WITNESSES
Mr. Pat Woods, Owner, Woods Farm Supply, Inc., Byhalia, MS....... 6
Mr. Geoffrey Carter, Founder, President and CEO, Hyperion
Technology Group, Inc., Tupelo, MS............................. 8
Mr. Michael Hatcher, President, Michael Hatcher & Associates,
Inc., Olive Branch, MS......................................... 9
Mr. Jason Bailey, President and CEO, Summit Management Services,
LLC, Oxford, MS................................................ 11
APPENDIX
Prepared Statements:
Mr. Pat Woods, Owner, Woods Farm Supply, Inc., Byhalia, MS... 25
Mr. Geoffrey Carter, Founder, President and CEO, Hyperion
Technology Group, Inc., Tupelo, MS......................... 27
Mr. Michael Hatcher, President, Michael Hatcher & Associates,
Inc., Olive Branch, MS..................................... 29
Mr. Jason Bailey, President and CEO, Summit Management
Services, LLC, Oxford, MS.................................. 31
Questions for the Record:
None.
Answers for the Record:
None.
Additional Material for the Record:
None.
THE PERSPECTIVE OF RURAL SMALL BUSINESSES IN NORTH MISSISSIPPI
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MONDAY, JUNE 18, 2018
House of Representatives,
Committee on Small Business,
Washington, DC.
The Committee met, pursuant to call, at 2:02 p.m., at the
ServPro Training Center, 1160 Stateline Road East, Southaven,
MS, Hon. Steve Chabot presiding.
Present: Representatives Chabot and Kelly.
Chairman CHABOT. Good afternoon. This hearing will come to
order, the hearing of the House of Representatives Small
Business Committee.
Before we get too far into this, I want to sincerely thank
Mr. Kelly for inviting me down here to Southaven this
afternoon. This is such a beautiful area of the country, and I
am glad to be with you all here today.
Now, in our Committee back in Washington, we have members
that come from all over the country, including, of course, from
the south like Florida and South Carolina, Kentucky, and they
all bring their own unique voice to our collective work, but
none so much as Trent Kelly, who I used to think had quite an
accent, but now I am starting to find since I have gotten here
that I am the one that has the accent.
[Laughter.]
He is certainly a very valued leader on our Committee. In
just a short time, he serves as Chairman of the Subcommittee on
Investigations, Oversight, and Regulations, and he works
diligently to represent the important issues facing North
Mississippi small businesses in that role.
Another thing I really like about Trent Kelly is his
willingness to reach out across the aisle and work together
with Democrats in a bipartisan manner. As the Small Business
Committee, we really strive to work together to tackle the
issues facing small firms in a very bipartisan fashion. You
could say our Committee is an outlier in what has become the
hyper-partisan city known as Washington, D.C.
But enough about Trent; let's talk about me.
[Laughter.]
I am Congressman Steve Chabot, and I represent my home
town, Cincinnati, Ohio, and some of its surrounding areas. As
you might have figured out already, I am also Chairman of the
House Small Business Committee, which I have served on for the
past 22 years. I also serve on the House Foreign Affairs
Committee, as well as the House Judiciary Committee.
During my tenure on the House Small Business Committee, two
of the concerns that we have repeatedly heard from small
businesses are the burdens of overregulation, and also taxes,
the complexity of it and just the level of taxation in our
country.
Let's start by talking about regulations because that is
where we have made some headway that some in the press have
already forgotten about. President Trump has worked very
effectively, I believe, with Congress to tackle overregulation.
He signed 15 CRAs, which are Congressional Review Acts. These
are resolutions essentially determining that certain
regulations that President Obama enacted had to go. In fact, 17
have already passed one chamber or the other.
In addition to that, he signed a number of executive orders
that directly address regulations. My favorite is the one that
says for every two new regulations coming out of Washington, we
have to get rid of two new regulations for every one coming out
of Washington. I am sure that I don't have to tell our
witnesses or any other small businesses in attendance that the
cost of federal regulations can be a lot, up to about $11,000
per employee per small business.
So the progress that we have made is important, and it is
something that a year ago we could have only dreamed about.
There is also good news on the tax front, as I am sure that
most of you are aware. Last year we passed the most
comprehensive overhaul of the tax code that we have seen in a
generation. Because of that, a recent survey done by the
National Federation of Independent Businesses, NFIB, said that
small businesses are more optimistic now than they have been in
the last three decades, the last 30 years.
Now small businesses can invest more in their people, in
increasing their benefits, giving their employees bonuses,
buying and updating new equipment and, most importantly,
creating jobs. Because small businesses are now out from under
the yoke of excessive regulation and taxation, they are
creating jobs at an historic pace.
Our unemployment level is now 3.8 percent. Imagine that,
3.8 percent. That is a big deal. Even the New York Times, a
publication that certainly avoids giving credit oftentimes to
this president or to his allies in Congress, had a headline
earlier this month that said ``we ran out of words to describe
how good the jobs numbers are.'' But we can always do better,
and that is what we are striving to do.
Today especially we are examining how small businesses in
America's rural areas are faring and what they need to continue
expanding and creating economic prosperity for small towns that
they serve. I certainly appreciate being out here with rural
folks who are in the trenches and hearing what they feel about
the federal government and what we should do to help them live
their entrepreneurial dreams.
I again want to thank Trent Kelly for his service to his
country, of course, and particularly his service in Congress
and inviting us to be here with you all today.
I would now like to yield to General Kelly for the purpose
of making an opening statement.
Mr. KELLY. Thank you, Mr. Chairman.
This is kind of funny, because in D.C. we have 5-minute
clocks and, let me tell you, you get rapped down if you go over
5. So we get a little leeway here, so I will talk a little more
than I do in Washington today.
I thank Chairman Chabot and welcome him to Mississippi's
1st District. I appreciate very much, and I hope you guys do,
that he took the time to come down here to my district to do
things and to learn about our small businesses here in
Mississippi, but that is the kind of guy he is.
I guess we are kind of tied at the hip because in 2009 and
2010 I took kids from Xenia and Lebanon, Ohio, to Iraq with me,
about 340 of them, which if they are not in his district, they
are within rock-throwing distance of his district. So that is
very important.
As Chairman Chabot mentioned in his opening statement, they
do talk about and rib me a little bit about the way I talk. I
don't say ``I'' right. I don't know all these words, but every
now and then we will have a good southern witness who speaks
right, and I will say it is good to have somebody up here
without an accent.
[Laughter.]
But down here today in my neck of the woods, you are the
one who talks funny.
[Laughter.]
Anyway, we really appreciate him being down here, and all
kidding aside, I really appreciate Chairman Chabot's leadership
on the Small Business Committee. As he mentioned, our Committee
does work in a bipartisan fashion, and he set the tone three-
and-a-half years ago when he became the Chairman. He fostered a
fantastic relationship with the Ranking Member, Ms. Velazquez
from New York, even though they couldn't and I couldn't be more
ideologically different from her area of the world and where we
live and what we represent and what she does.
But as he and she often say, when it comes to small
business, there are no Republican issues and there are no
Democratic issues. So thank you again for your leadership on
the Committee and your willingness to work across the aisle to
actually get things done in a place where that is so rare.
It is definitely an exciting time for businesses. We are
seeing record-breaking small business optimism, and the
national unemployment rate is at an 18-year low of 3.8 percent.
Write this number down, 6.7 million jobs in America, and only
6.2 million workers who are looking for work right now, 6.7
million jobs, 6.2 million people looking.
This rate is down significantly from the most recent high
of 10 percent in October of 2009, and the economy has created
16 percent more jobs in the first five months of 2018 than in
the first five months of 2017. Business is booming, and
deregulation and tax reform action taken by the President and
the Congress have certainly primed the pump for what is looking
like an extended period of economic growth that we haven't seen
in decades. I just saw recently where they had to re-up their
estimate for the GDP growth this quarter, and that is the
second time I think that they have done that this quarter.
But as in everything in life, we can do better. There are
still some nagging problems small businesses face, and these
problems are especially acute in rural areas, like most of the
area I represent. For example, despite good news in most
segments of the economy, the financial lending environment
continues to be challenging for small businesses. According to
the recent report by the United States Small Business
Administration Office of Advocacy, small business lending
decreased significantly during the Great Recession and has
remained depressed compared to pre-recession levels. Access to
affordable capital can make or break a small business, and the
continuing strain on the system caused by the Dodd-Frank
reforms after the Great Recession continue to hamper capital
markets and affect small firms, particularly in rural areas
where fewer and fewer lenders are located.
Another problem is reliable access to broadband Internet.
As the economy continues to rely on a more global marketplace,
access to broadband is crucial to keeping businesses
competitive. Many of the industries central to rural
communities such as agriculture, fishing, mining, energy
production, and manufacturing depend on mobility and
connectivity to run their daily operations. Unfortunately,
small firms in rural areas continue to be at a disadvantage
when it comes to access and broadband.
For example, about 39 percent of the rural population, or
23 million people, still lack access to broadband services that
is defined as fast by the FCC. Increasing access to broadband
in rural communities can also mean access to better education,
health care, higher wages, which all lead to economic growth.
Technology is changing at an amazing pace, and we have got
to be vigilant to ensure rural communities are not left behind.
Finally, the economy's success is also causing a problem
that hits small firms harder than their larger brethren. For
the first time since the Department of Labor began tracking job
vacancies, the number of vacant jobs surpassed the number of
unemployed Americans. So while employees who are looking for
work are finding it easy to locate jobs in several industries
and can even command higher wages and better benefits, the
increase has unified jobs and inhibited business growth, and
therefore economic growth. Small firms are finding it difficult
to find qualified employees and are at a disadvantage to large
firms who can often provide larger salaries and greater benefit
packages. In a sense, small firms are victims of their own
success.
That said, all in all, things are looking up. But what we
would like to do today is hear from small businesses in North
Mississippi and how they are doing. We have asked them to talk
about the good and the bad. We want them to be honest with us
so we can take their testimonies back to Washington to share
with our colleagues and develop policies to alleviate day to
day problems they face. The best ideas don't flow from
Washington to the people. The best ideas flow from the people
back to Washington.
Again, thank you, Chairman Chabot, for joining us here
today, and I yield back.
Chairman CHABOT. Thank you very much.
The gentleman yields back.
I will take just a moment to sort of explain our lighting
system, which is going to be a little different than the
lighting system we use in Washington. We have kind of a fancy
system up there where there is a green light on there to let
you know. It is on for 4 minutes. We operate by the 5-minute
rule where each of the panel members gets to talk to us for 5
minutes and talk to you all, and then we ask questions for 5
minutes, and then we will go back and forth. And then a yellow
light comes on and lets you know you have a minute to wrap up,
and then the red light comes on, and then you stop. But we are
in the south, so we are going to go by the honor system. We are
going to ask you all to try to stay within the 5 minutes. If
anybody goes too far, I will maybe tap like this to let you
know that you have gone over, and then I can tap real hard if
you don't stop. But we won't have to do that, I am sure. So we
would ask you to just kind of stay within 5 minutes, and we
will all get along just great.
So I would now like to turn the floor back over to Mr.
Kelly to introduce our very distinguished panel here this
afternoon.
Mr. KELLY. Thank you again, Mr. Chairman.
Our first witness is Mr. Pat Woods, Owner of Woods Farm
Supply in Byhalia, a family-owned and -run small business that
started in 1953. It began when his grandfather, JP, bought the
local gin. The family began selling feed at the gin in 1975 and
has continued to expand to its multi-faceted operation today
that includes a wholesale fertilizer bagging line, a retail
farm supply store, a hardware store, and a 300-head cow/calf
operation. He attended both Northwest Mississippi Community
College and Mississippi State University.
Mr. Woods, we appreciate you being with us today.
Our second witness is Mr. Jeff Carter, Founder and
President and CEO of Hyperion Technology Group in Tupelo.
Hyperion is a multi-million-dollar defense contractor with over
25 full- and part-time employees. The company has licensed
technologies from a variety of research institutions and
developed several new technologies, including one designed to
protect the warfighter for the Army that is currently deployed
in Afghanistan. He received a Bachelor of Science and his
Master's in Electrical Engineering from Mississippi State
University.
Thank you for being here, Mr. Carter.
He is also my neighbor.
Our next witness is Mr. Michael Hatcher, President of
Michael Hatcher & Associates in Olive Branch. His company is a
full-service landscaping provider, has been providing a full
range of professional landscaping services for over 30 years to
homeowners and commercial properties in Memphis and surrounding
areas, including parts of Mississippi and Arkansas. The company
relocated its corporate headquarters to Olive Branch in 2016
and currently employs over 110 full-time associates.
It is a pleasure to have you testifying here today, Mr.
Hatcher.
Up next is Mr. Jason Bailey, Owner and CEO of Summit
Management Services, LLC in Oxford. Summit is a full service
property management firm that offers a variety of rental
options to local residents and businesses. He oversees the day
to day operations of 40 different condominium and homeowner
associations and over 700 long-term rental properties. Since
2012, he has also served as an alderman for the City of Oxford.
He received his Bachelor of Business Administration from Ole
Miss.
Mr. Bailey, thank you for being with us today.
Mr. Chairman, I do want to recognize Mr. Brian Rigby, who
is the owner of the ServPro franchise here, and also in Tupelo,
for making this venue available to us today, and I yield back.
Chairman CHABOT. Thank you very much.
The gentleman yields back.
Mr. Woods, you are recognized for 5 minutes.
STATEMENTS OF PAT WOODS, OWNER, WOODS FARM SUPPLY, INC.,
BYHALIA, MS; GEOFFREY CARTER, FOUNDER, PRESIDENT AND CEO,
HYPERION TECHNOLOGY GROUP, INC., TUPELO, MS; MICHAEL HATCHER,
PRESIDENT, MICHAEL HATCHER & ASSOCIATES, INC., OLIVE BRANCH,
MS; JASON BAILEY, PRESIDENT AND CEO, SUMMIT MANAGEMENT
SERVICES, LLC, OXFORD, MS
STATEMENT OF PAT WOODS
Mr. WOODS. Thank you. Chairman Chabot, Congressman Kelly,
and other members of this Committee, I appreciate the
opportunity to come before you today representing a small
agricultural business in North Mississippi. My name is Pat
Woods. My family and I operate Woods Farm Supply in Byhalia,
along with roughly 35 employees. We also farm cotton, corn,
soybeans, cattle, and timber.
In my allotted time, I would like to focus my brief
comments in three primary areas of federal policy: tax reform,
regulatory relief, and rural broadband deployment.
The first of these is tax reform. First and foremost, I
applaud the efforts of the Congress and the Committee on Small
Business to bring true tax reform to the American public and
our small businesses across the country. Passage of H.R. 1, the
Tax Cuts and Jobs Act, was long overdue. Reductions in
individual rates, reforms in the corporate rates, and changes
in the estate tax rules was a monumental activity that will
help put America back on the road to economic recovery.
As a small business owner and member of the board of
directors for my local bank, I see the benefits of this
legislation firsthand on a daily basis. For our business sales
are up, and new construction loans at our bank have also taken
a recent increase.
I also serve on our local rural electric power cooperative
board of directors. Our management tells us that there has been
a recent spike in new connections to new homes being built in
our service area. At our operation, my employees are seeing
more take-home pay in their payroll checks, and they are
investing those extra funds back into our local community.
Additionally, I am pleased with the changes in the estate
tax rules that allow me to pass my farm on to my three
children. The estate tax is one of the most unfair laws on the
books, and I sincerely appreciate those changes made by H.R. 1.
In summary, I can confidently stand before you today and
say that the economy is growing in my area and residents are
seeing a higher quality of life. All of these positive
movements and the boost in consumer confidence I attribute to
the efforts made in the area of tax reform passed by Congress,
teamed with a new Administration that fosters a pro-business
climate.
Secondly is regulatory relief. Another major area of
federal policy for us as small business owners and farms that I
would like to discuss is regulatory relief. As a farm business
and farm operation owner, we deal with a host of federal
regulations. One of the largest and most positive movements for
us was the repeal and replace of the Waters of the U.S. Rule,
and it was replaced by the EPA. This massive federal overreach
would have been detrimental to every aspect of my farm and my
farm business, and my customers as well.
The overall business community in rural America has
benefitted from the new vision at EPA, back to the philosophy
of cooperative federalism, where the federal government is more
of a partner and co-regulator with state lead agencies. This
new view and philosophy at EPA has brought comfort to small
businesses and farms that the federal government plans to be
there to help them stimulate growth in our economy, not to be
an obstacle in the way.
And lastly, rural broadband deployment. The last final
policy area that I would like to highlight which is vital to
small businesses and farm technology is the topic of rural
broadband deployment. Rural Mississippi is lagging behind in
the area of connectivity to the Internet. I hear stories on a
daily basis of school children that have to come to town to
download their homework, business growth hampered by a lack of
adequate service, and precision agriculture technology that
loses a signal due to a lack of connectivity in their area.
As you know, it is a huge problem for rural America, small
businesses, and farm operations. I commend the Committee for
all the work that has been done to bring broadband to rural
America, and I cannot stress how important this is to
stimulating the growth of the economy and quality of life for
rural Americans.
Specifically, I want to thank Congressman Kelly for his
efforts in sponsoring legislation last December. The Small
Business Broadband and Emerging Information Technology Act,
H.R. 4677, addresses the bipartisan push for nationwide
broadband that specifically targets small businesses' needs and
potential.
One delivery model I would like to suggest and encourage
the Committee to look at as a means to bring this
infrastructure to rural communities is through the rural
electric power cooperatives. Broadband is now the electricity
of the 1930s. The only way that electricity was brought to
rural America was through the rural electric power cooperative
model under President Roosevelt's New Deal. Numerous rural
electric power associations are effectively deploying broadband
across the rural countryside in the country right now. I would
ask the Committee to look at ways that Congress can further
study this concept, and also pursue any and all measures of
federal policy that fosters connectivity in rural portions of
the country.
Again, Mr. Chairman and members of the Committee, I
appreciate all that you are doing to promote and protect small
businesses across the country.
Thank you for the opportunity to be a part of this
distinguished group of witnesses. I will be happy to take any
questions that you may have.
Chairman CHABOT. Thank you very much, Mr. Woods.
Mr. Carter, you are recognized for 5 minutes.
STATEMENT OF GEOFFREY CARTER
Mr. CARTER. Chairman Chabot, Congressman Kelly, my name is
Geoff Carter. I am President and CEO of Hyperion Technology
Group in Tupelo. Hyperion is a small business founded in 2009
which now employs 31 people. Hyperion is a custom engineering
research and development company with a primary focus on
federal government contracting. Hyperion supports all branches
of the military, as well as the Departments of Energy, Homeland
Security, and the United States Secret Service, developing and
building sensor and sensor systems to protect both civilians
and the warfighter.
Hyperion also works with several major public universities,
including Mississippi State University and the University of
Mississippi, supporting their research and development efforts
and commercializing university-developed technologies for the
public benefit.
In addition, Hyperion's commercial division serves
industrial customers with custom engineered solutions that
increase productivity, with an emphasis on workplace safety.
Over the past 18 months Hyperion Technology Group has seen
significant growth in both government and commercial sales.
Since the 2016 election, our workforce has increased by 30
percent, our revenue has doubled, and we have outgrown our
facility with the recently announced construction of our new
headquarters, with five new jobs created just this year.
Some of the factors contributing to our recent growth
include the fact that government contracts seem to be moving
through the system more quickly; there is an increased emphasis
from the government on military research and development and
modernization; a more positive and contractor friendly dealing
with government contracting officers and staff; industry's
desire to spend capital for facility modernization and
improvement; and increased revenues from larger businesses'
expenditures resulting from H.R. 1, the Tax Cuts and Jobs Act.
The tax cuts afforded to us by H.R. 1 will make it easier
for Hyperion to continue to grow and expand its footprint in
both the government and commercial sectors. We anticipate our
growth to continue as long as the current business environment
prevails. The lower corporate tax rates and the increased
ability to expense capital improvements will promote
reinvestment, growth, and expansion of small businesses, as is
evident from our recent announced expansion.
While I have this opportunity to speak as an advocate for
small business, I would like to mention how some of the
regulatory and compliance burdens disproportionately affect
small business government contractors.
We recognize the importance of security, safety, export,
and employment regulations, but the compliance and reporting
requirements of these regulations are essentially the same for
small and large businesses alike. Certain areas of our business
are regulated by multiple agencies and departments, adding
complexity and increasing the compliance with the reporting
burden to unnecessary duplication. Many of these requirements
demand full-time support staff to ensure full compliance, which
dramatically increases our overhead costs. These fixed overhead
costs are less significant for a large business but hit us
harder as a percentage of overall budget in the small business
community.
I would like to recommend that the Committee consider
introducing legislation in the form of tax credits targeted
specifically towards small business government contractors to
offset some of the burden that is required in order to comply
with these important regulations.
I would like to thank the Committee for this opportunity,
as well as for your time and consideration.
Chairman CHABOT. Thank you very much, Mr. Carter.
Mr. Hatcher, you are recognized for 5 minutes.
STATEMENT OF MICHAEL HATCHER
Mr. HATCHER. Thank you, Chairman Chabot and Congressman
Kelly. Again, welcome to North Mississippi. We are glad to have
you here.
I am Michael Hatcher. I am the Owner and President of
Michael Hatcher and Associates. We are a full-service
landscape/design/build company that will service customers in a
three-state area in about a 120-mile radius where we are today.
We have been in business for over 36 years. As a graduate of
Mississippi State University, I can assuredly share with you
that our industry has changed dramatically in the 30 years that
I have been in this industry, of which we have seen a lot of
technology, we have seen a lot of opportunities, but none the
least of which I will share with you in greater detail as I
conclude would be the shortage of labor.
Now, as we continue to move forward, we are excited to tell
you that the results of the Tax Cuts and Jobs Act that was
recently passed has played a significant impact in our area. As
a small businessman, it has given me the opportunity to invest
and to expand our facility and continue to expand our assets.
For our customers, it has driven growth by approximately 20
percent this year. It has been tremendous.
Gentlemen, we work on expendable income. The landscaping
services that we provide are not life and death services. They
are expendable income, and when that expendable income
increases, so do our revenues, and we want to continue to take
advantage of that.
Some of the things specifically that have happened is that
we were able to give a 7 percent raise across the board this
year. When you start talking about the FTEs that we have that
are in excess of 110, that is a substantial investment, and we
continue to make sure that we hire the best people that we can
hire, and to train them, and to retain them.
We are a drug-free workplace. We have been participating in
the E-Verify program--some of you may recognize that as the I-
9--since its inception. I was a contractor working in a
government facility in 2006 when that was enacted in June, and
we adapted to that immediately.
Our workman's comp mod rating, as I talk to you, is at .78.
That means that we represent 22 percent safer working
environment than our industry standard, and I am proud to talk
to you about those things, and they are a direct result of some
of the savings that we have received from the TCJA that has
allowed us to invest in safety programs.
As we continue to have those opportunities to grow, we must
continue to recruit, as we do, regional universities, colleges,
vo-tech schools and local high schools, as well as our area
residents. As you just referred to earlier, Congressman Kelly,
there are more jobs available than there are people to fill
them. We have chosen to participate in the H2B program for the
last three years.
Gentlemen, I need not tell you--you live it every day--the
significance of the immigration reform policies that are before
us. As a small businessman I can tell you that that is where
the rubber meets the road. So we have adapted to the program.
As you referred to earlier, Mr. Carter and Mr. Woods, there is
an undue burden of rules and regulations to follow by the
Department of Labor, the guidelines of the H2B program. If we
continue to work with those requirements for eligibility, the
DOL has set wage rates for the positions that we field at a
minimum of $12.97 per hour.
Gentlemen, that is your new minimum wage rate. There is no
longer a need for you to debate this program. It is coming
through the DOL, which you all may or may not be aware of,
which sets a market rate for the rest of us in the area, the
requirement that mandates that all of our full-time employees
pay that. So if I am hiring a high school worker for the
summer, just working alongside one of those H2B documented
workers that we have, we are paying that rate. We don't mind
paying that rate because as an E-Verify drug-free workplace, we
are attracting the best workers.
During the past three years we have incurred expenses of
that program of over $100,000, and that $100,000 does not
include the salaries of the workers. Those are the fees that we
are required to pay to receive those people across the border
through the consulate, through the legal fees that we have to
provide them.
As we continue, this is a very burdening process that we
incur, and then there is no assurance most recently with the
cap being met. Fortunately, we have been in the program long
enough. We know how to facilitate our request and do it at an
early start. So for the 2019 workforce, we have already started
this process.
We want to continue to celebrate the successes that the
TCJA has had, and it has been a tremendous success. We
compliment each of you and your constituents for all the hard
work to get that accomplished. Now we are missing the last
piece. We are missing that piece to be able to facilitate the
growth of the small businesses in our area.
With that, gentlemen, I would like to conclude and thank
you for your time.
Chairman CHABOT. Thank you very much, Mr. Hatcher.
Mr. Bailey, you are recognized for 5 minutes.
STATEMENT OF JASON BAILEY
Mr. BAILEY. Thank you. Good afternoon, Chairman Chabot and
Congressman Kelly. I want to thank you for the opportunity to
be able to be here today and speak to you about small business
and things facing small businesses like mine in the Mississippi
1st Congressional District.
My name is Jason Bailey. I am the Owner-Operator of Summit
Management Services, LLC. I started my business in 2007 under
the name Bailey Management Company, and I literally started my
business out of a broom closet in one of the buildings that I
managed. In 2009, three management companies that were in
Oxford came together and we formed Summit Management Services.
Right now I have a business partner. He and I are the sole
owners and the operators of our business, and we are now
working with the City of Oxford to go through our final
approval to get a building built for our office. So we have
come a long way since that little broom closet, and we are kind
of excited about that.
When we began we had four employees, including owners.
Through the efforts of many, we have grown our company five-
fold since that first day. Currently we average 18 employees,
both full-time and part-time, and in 2007 I was named by the
Mississippi Business Journal as one of the top business persons
of the year for the top 15 under 40, and this honor was given
to me but it was earned by many. It wasn't just earned by me.
So, I have a lot of support and really do appreciate that.
Today we are very excited about the future of our company.
The past nine years have been filled with challenges, including
the Affordable Care Act. The Affordable Care Act has certainly
had an impact on our business and our employees. But under this
law, we do not have to provide health insurance to our
employees, but we value them greatly and feel that health
insurance and health care is something that we would like to
provide to our employees. We have done that. That was part of
our goal as we started our business, to provide that 100
percent from day 1.
At the time when we first started our business, the expense
of health care was the seventh largest expense on our ledger.
Today it is the second largest expense. When we started we were
able to provide 100 percent health care to our employees. But
because of the rollback, we have had to roll back 20 percent,
and now we pay 80 percent to our full-time employees and they
have to come up with the 20 percent. This is less money that
they take home, and it restricts our growth as a company.
As a small business owner, we have not realized the new tax
benefits yet. We look forward to those that will be coming into
play. Our employees are able to take home more pay, and we are
grateful for that. But I feel more can be done.
One of the casualties of the new tax reform change was
removing the tax credit for entertaining clients. This is
something that we really value in our business. This is how we
grow our business. This is how we meet and form those
relationships with potential clients. And due to our clients'
busy work schedules, we find entertainment and lunch meetings,
and unfortunately these things are now out-of-pocket expenses,
whether it is us or whether it is our company or whether it is
our employees. We feel like that is something we could probably
work on and change that. I think that was one of the things
that came out that we could definitely change.
As we continue to grow, one of the many challenges is when
to invest in another full-time employee. As you can imagine in
the service business, as we are, people are critical. But due
to some of the government issues, we have held back from hiring
and searching for our people further. As you know, there is a
breaking point with personnel, and we don't want to reach that.
But oftentimes we make plans to grow to other markets and
purchase other companies, but without any benefit from growth
it makes it harder to do so, and the ROI is just too far down
the road.
One of the positive things that we have seen in the past
six months is the new Opportunity Zone. This is something that
will have a positive impact on rural Mississippi as we will see
investors flock to the area to realize the tax benefits and
invest in our communities.
One wish I have is the opportunity to benefit from this
program across all small businesses. For example, we are going
to be the new owner-operator of our building, and because we
are outside the Opportunity Zone, literally one block outside
this Opportunity Zone, we are not going to realize that
benefit.
For example, our depreciation schedule when we build our
building will now be 39 years, versus just down the street
where an investor, maybe from out of state, will be able to
realize the benefit in 10 years and can sell and reinvest. We
invest in our market each and every day. I would like to see
something like this for entrepreneurs like us that are owner
operated and not geographically challenged.
Think about it this way: We are investing in a market and
not just here to build, rent, sell, and cash out. We do not
want to cash out. This is our home, and we want to be in
business for a long time. Think of a landscaping company that
wants to invest in a new shop to help operate their business, a
doctor that chooses to invest in an office in a rural area, a
property management company that will own-occupy a building in
the community that they are a key part of. I believe this is
something we can work on and that can be done.
I was excited to see the rollback of regulations of Dodd-
Frank. When a banker could not invest in someone they knew from
church, kids school, sports programs, and just being a part of
the community because of regulations placed on the banks, it
became a weighted anchor on the growth of the economy in rural
America. When I was starting out I was lucky enough to have a
banker that knew my potential and invested in my future. If I
started five years later during the Dodd-Frank regulations, I
would not have been able to realize some of the opportunities I
have. I look forward to seeing these regulations rolled back
and appreciate you all's effort on that.
In closing, I want to thank you for the opportunity to
speak with you today, and I will be happy to answer any
questions you have. Thank you.
Chairman CHABOT. Thank you very much. I think it was
excellent testimony from all four of the witnesses, so we
appreciate it.
We now go into our side asking for 5 minutes. Usually the
Chairman starts with himself, so I guess I will do that, and
then I will turn it over to Mr. Kelly, and then we will go back
and forth a couple of times. So we may take two rounds, maybe
three, but we will see how it is going.
I will begin with you, Mr. Woods. I recognize myself for 5
minutes.
You had mentioned that the Tax Cuts and Jobs Act, which was
the tax cut bill that went into effect at the end of this past
year that the President signed into law and that I would say
both Mr. Kelly and I both voted for, you had mentioned that one
of the parts of it that had to do with the estate tax was
particularly helpful to family farmers in that area.
Mr. WOODS. Yes.
Chairman CHABOT. Could you sort of explain to folks who may
not be terribly familiar with it how that did benefit you and
could benefit others?
Mr. WOODS. Well, what it benefits is the sweat and blood it
takes to build a farm for generations that was passed down from
my grandfather to my father to me. I am a 7th generation farmer
in Marshall County. My first grandfather came in around 1817,
so I have been there that long farming. And as we work and we
are able to buy a piece of land and we are able to work that
land, and our kids grow up on the land, we want to be able to
pass it on to them because it is part of their life. So many
people work so hard, and then when it comes to the point that,
all of a sudden they are gone and their family realizes that
they may have to sell the farm just to pay the taxes when the
taxes have been paid by the owner or the person for all their
lifetime, it is just a very unfair burden. We just want to be
able to have a legacy.
So we want that to be carried on. That is one thing that
makes us get up in the morning to do this, to hopefully have my
grandkids, who just came to see me yesterday--I have eight and
one on the way, will be nine--I want them to have a place, and
hopefully one day they will have a place to raise their kids on
the farm of granddaddy or great-granddaddy, for their own
provided for them.
Chairman CHABOT. Very good. Thank you very much.
Mr. Carter, I will go to you next. You are involved in the
SBIR program on occasion; is that right?
Mr. CARTER. Yes, quite a bit actually.
Chairman CHABOT. Could you tell us how that works and how
you are able to take advantage of it?
Mr. CARTER. We have several active Phase I and several
active Phase II SBIRs now, all with DOD. That is a great
program for somebody like Hyperion that is in the technology
development and R&D type of world. It allows us to take a lot
of the things that we develop and push them out, specifically
towards the military.
We do find, though, that the proposal process for DOD is
through one common website, one common portal, but each branch
of the military actually has their own requirements. So once
you are given an award for an SBIR, if you are lucky enough to
win, depending on the branch that you are getting the award
from, the requirements can be vastly different.
So, for example, the Air Force has a much higher reporting
requirement than does the Army for an SBIR. But for us, we have
been very, very successful. We have quite a few active
programs, and we are right now actually in the middle of
another proposal cycle and hope to win a few more this year.
Chairman CHABOT. Very good. Thank you very much.
Mr. Hatcher, I will turn to you now. You mentioned the H2B
program, and there may be folks in the audience who aren't
necessarily familiar with what that is. I am a proponent of it
and have been trying to increase the numbers, and there are a
lot of us trying to work on that right now.
Sometimes you will get criticism, ``Oh, this is going to
take jobs away from Americans.'' Would you explain your view on
that and what the H2B program is and why if that is true, or if
it is not true why it is not true?
Mr. HATCHER. Yes, sir. Certainly. Thank you for this
opportunity to expound on this. The Department of Labor is set
up so that we must advertise through multiple avenues for
positions that are open prior to the season.
Chairman CHABOT. And these are generally seasonal
employees. They are not going to work 12 months a year. They
will work during the summer or----
Mr. HATCHER. That is correct, the majority. So, of the 110
people, we have 30 that are participating this year. So we have
tried just all kinds of things, through radio ads, through
print ads, through social media, to fill these positions for
the local people.
Chairman CHABOT. In fact, that is a requirement----
Mr. HATCHER. Yes, sir, that is a requirement, and you have
to do it multiple times to meet those obligations. You have to
completely write the job description so they understand what it
is. So there is an exhausting effort to make sure that you are
looking for all the people locally.
As I mentioned to you in my presentation about drug-free
workplace, we often run into the real challenge in local
employees of getting people to just be able to pass the drug
test, and that is a real challenge for us. E-verification, as I
mentioned also, the I-9 process, is there and it is in place.
As I mentioned to you, I started participating in June of 2006.
Early on, before we had E-Verify, when we were working
documented workers, the Social Security Administration used to
send us a No Match letter if we had people that didn't match,
their numbers didn't match with the names. And following that
was the I-9 or the E-Verify system which was starting to
identify a lot of fraud that was outside of the employment. A
lot of that fraud was then showing up in government subsidy
programs.
As your direct question relates back, there is an H2A
program, which relates more to the farmers on the agricultural
side, and the H2B program which, as you know and understand, is
for the service business, whether it be a hotel maid or someone
taking care of your hotel, the seafood industry that we have
down on the coast. Any of those service-oriented industries
work through the H2B program.
We work under a cap system, as you know, that only allows a
certain number of people to apply every year.
Chairman CHABOT. It is about 65,000 nationally, I believe.
Mr. HATCHER. That is correct. Yes, sir. So when you look at
some of the things, and we listened to Congressman Kelly talk
about the number of jobs that are available, and then we are
only allowing that many documented workers in, it is a real
regimented process for the individuals that are applying for us
to get through the consulate in Mexico to become eligible. So
they are vetting all of these people extensively. If there is
any sort of warrants or issues, any problems, then they are not
allowed to come work for us.
Chairman CHABOT. Thank you very much.
Mr. Kelly, I went over a little while, 8 minutes and 32
seconds. I will get to the second round.
The gentleman from Mississippi, Mr. Kelly, is recognized
for 5 minutes, or 8 minutes and 14 seconds.
Mr. KELLY. All right. I am going to start with you, then,
Mr. Bailey. In your testimony you talked a little bit about
Dodd-Frank. I am not a big fan of the CFPB and Dodd-Frank. I
think it has been extremely detrimental to our small bankers,
and I think if you don't have a bank, you don't have a town
anymore, to replace the Post Office.
In your testimony you talked about how Dodd-Frank put the
brakes on commercial lending to small firms. You started five
years before Dodd-Frank, so you have seen what it was like
before, during, and now, after a little easing on the
regulations.
Can you walk us through what the credit markets were like
in all three of those years, before, during, and what you are
seeing now?
Mr. BAILEY. I was a very young entrepreneur when I first
went to the bank and asked for a loan. The banker that was
there looked at me, knew who I was--I grew up in my community--
and said I am going to take a chance on you, and gave me 100
percent financing on what I needed. I was very thankful, and it
allowed somebody young who didn't have the cash or the cash
position to realize his opportunity. I took that money, have
invested that money, have paid that back, and I think I have
five years left on that loan.
Because of that, I have been able to acquire more and more
loans and more property. But if I were to have started five
years later, the regulations would have been through the roof.
Since that time I have gone and got additional loans and have
had to come up with cash capital, and somebody that is young
like myself and is trying to put food on the table for two boys
and trying to provide for my family, those opportunities are
restricted because you have to come up with some capital.
If the banker realizes your potential and sees your future
and wants to invest in it, under these new regulations they are
so handcuffed in what they can and can't do. Not only that,
through our business as well, we do condo association
management as well, and we have seen more and more paperwork
come through our office, so we have to have somebody that hires
to take care of this paperwork just to get a condominium owner
financed. They do condo questionnaires, and when you receive
one it takes about an hour to do, and when you receive 50 of
those in a month, you could imagine what time that takes away
from somebody else doing additional work.
I am just now learning about the rollbacks. I am hoping
that we will see some of those regulations go by the wayside. I
don't know exactly just yet what that is going to look like. I
think it is just in its infant stage, but I don't expect we
will roll everything back, but I do expect if we can get rural
lenders to be able to invest in their community and in their
people like they had in the past, I think it will be a
positive, positive thing.
Mr. KELLY. Very good. And going to you, Mr. Carter, you
mentioned that regulatory burden disproportionately affects
small farmers. We have made some progress on that front since
the president took office. What more can we do? And going back
to Dodd-Frank, for small farmers, what that does is it adds a
price to the end user. So your loans are more expensive, they
can't function, so everything comes out because they don't have
anything.
What are some more things we can do to roll back
regulations?
Mr. CARTER. Well, what I would like to do is give you an
example that has kind of been at the forefront of things at my
office over the past several weeks. We have recently had
several countries contact us asking if we can export some of
the things that we build, both some of the military items and
the non-military items. We have found that, at least in our
business, there are six departments that have jurisdiction over
exports in the United States. That includes the Department of
Commerce, the Department of State, the Department of the
Treasury, the Department of Commerce Bureau of the Census, the
Department of Homeland Security, U.S. Customs and Border
Protection, and, of course, the Department of Defense.
There is no unified, integrated management system to
address all of those departments at the same time, and before
we can even consider releasing any technical information about
anything we do, we have to go through an application process
with all six of those departments, and that is just a burden
that has had two of my employees tied up now for several weeks
just going through that process.
Mr. KELLY. Okay.
Mr. Chairman, I yield back.
Chairman CHABOT. I will go with Mr. Bailey, then, and go
back. You had mentioned the Affordable Care Act, or Obamacare
as a lot of people will refer to it, and I think you had said--
correct me if I am wrong, but I think you said before
Obamacare, health care was the seventh costliest thing as a
business person you had to pay for.
Mr. BAILEY. That is correct.
Chairman CHABOT. After Obamacare, it was the second most
expensive thing.
Mr. BAILEY. That is correct.
Chairman CHABOT. Now, on top of that, you said you had 18
employees?
Mr. BAILEY. About eight full-time employees, and then 10
part-time employees.
Chairman CHABOT. Okay. And Obamacare isn't even supposed to
affect those directly under 50 employees. So could you kind of
explain so we can all understand how in the heck is that
possible?
Mr. BAILEY. How does it affect us as a small business?
Chairman CHABOT. Yes.
Mr. BAILEY. I believe it is under 50 employees you do not
have to provide health care as a small business owner. We as a
business choose to do that for our employees. That was one of
our goals. When we started and we were meeting to form our
company, we said one thing we want to do is provide health care
for our employees. We value them. We value their health. We
want them to be healthy because a healthy employee is a more
productive employee. But we chose to provide that.
Because of the cost of it, it wasn't that great at the
time. I mean, it was I think for somebody like myself starting
out, I think it was $139 for a monthly charge for health care.
Now I think I am over $400 a month. But we want to provide that
for them, and we want to be able to retain our employees
because it is out there in the marketplace. In Mississippi, if
you don't provide that, all of a sudden you have a great
worker, and another office realizes it and offers them, and you
have lost all that institutional knowledge. So we provide that
for the employee to retain them mostly. When we did that we
were able to provide 100 percent of health care cost as the
seventh largest expense in our ledger, and today we are only
providing 80 percent, they are providing 20. It is less take-
home pay for them, and it is the second largest on our ledger.
Chairman CHABOT. Thank you very much.
As you may be aware, Mr. Kelly and myself both believe that
the American people deserve a whole lot better than what they
are getting under Obamacare, or the Affordable Care Act, and we
attempted and passed in the House doing just that, replacing it
with something that we thought was better. We got it through
the House, but unfortunately it missed by one vote over in the
Senate for passing. So we are sort of stuck with it right now.
We are not happy about that.
I know in this job, as Chairman of this Committee, we get
to talk to people all over the country, and I hear the same
thing from people in my district as I do from people all over
the country, that they wish we would change this to something
that makes more sense. The American people really deserve
better, and I totally agree with that sentiment.
In the Tax Cuts and Jobs Act that we passed, there was one
good thing in there about health care. It did do away with the
individual mandate where you had to buy what the government
told you to as an individual or you got penalized for that, a
lot of money for a lot of folks. So that is an advantage, but
the system still--people deserve a lot better.
I think it was Bill Clinton, of all people, who said it is
the craziest system in the world, talking about Obamacare. You
are paying twice what you used to pay and getting half the
coverage. I think he was right. I haven't agreed with him a lot
over the years, but I definitely agreed with him on that one.
So, thank you.
I think I will at this point yield back and turn it over to
Mr. Kelly for further questions.
Mr. KELLY. Yes, sir. Thank you, Mr. Chairman.
I am going to come to you, Mr. Woods. WOTUS, I am sure you
know what that is, Waters of the U.S. Rule, that has been
nixed. It would have been a major problem for family farms such
as your own. Can you talk a little bit about if Congress had
not acted in conjunction with the President to repeal and
replace it how this rule would have affected your day to day
operations?
Mr. WOODS. Yes, sir. With the WOTUS Rule, it just covered
every mud puddle in the country. It could be somebody's
backyard. It could be in our pastures. If it rained a good rain
and left standing water, that was Waters of the U.S. We could
not work our fields under certain conditions. It was going to
have to make us quit farming some of the areas. It allowed us
not to be able to use proper drainage that we know how to do,
drain our fields to make production better and more economical.
I don't know where to begin, really. It was going to touch
every--and it was so overreaching, and I don't even know all
the areas it really touched because it was just huge. That is
all I can say. I can't even describe it.
Mr. KELLY. I remember when I had a chance with the past
Administrator of the EPA and I got to talking to her, and I had
a specific incident in Mississippi where there was a manmade
irrigation ditch that had been dug many, many years ago,
probably before I was born, was now grown over, but the cost to
mitigate that property, because it was declared a Water of the
U.S., was basically what it meant is a million-dollar business
didn't come to Mississippi because of the mitigation cost. The
property was worth more to mitigate, and so no one could afford
to buy it.
Mr. Hatcher, I am going to ask you--thank you for your
answer.
Mr. Hatcher, you stated you have had a 20 percent growth in
your business receipts since this time last year based on the
Tax Cuts and Jobs Act. You also say you gave your employees a
minimum of a 7 percent raise to all of your employees. Just if
you can articulate how impactful it has opened up capital, or
how impactful it has been for your employees, and also for your
business.
Mr. HATCHER. Certainly. As the growth came, it came from
the actions that I can say were strictly from the Tax Cuts and
Jobs Act because it freed up corporations. So when I talk to
you about 20 percent growth in revenue year over year, it is
not in any one area. We are full service, so we do both
government, commercial, industrial, and residential work. So an
expendable-income, service-related business, it absolutely put
more money into the budgets of all of those entities that
directly reflected--a lot of it was deferred work that hadn't
been done.
How has it affected the employees? When that 7 percent
raise came across the board, this is tied back into part of the
DOL's mandate on the minimum wage rate that we pay. But as it
went across from top to bottom, whether you are the CFO or
whether you are the operator of a grass height reduction
device, we gave 7 percent across the board. So in that, you
start seeing new vehicles, you start seeing new cars, you start
hearing them talking about what they are doing in upgrading
their homes. So that is directly how that affected us.
Mr. KELLY. Very good.
This is kind of for the panel, so any one of you can jump
in. I have about a minute-and-a-half left. But one of the
things that I like to work on and one of the things that I am
most passionate about is making sure people understand the
great workforce we have here in Mississippi. And number two, in
conjunction with our universities--I know, Geoff, you work with
Mississippi State, and also Ole Miss--you get these bright
engineers that they send to you, our community colleges, our
high schools. What can we do in Congress that makes it easier
for you all to get qualified workers who fit the needs that you
have in your industry?
Mr. BAILEY. I don't know if there is a mechanism to give a
credit if somebody goes and gets further education, or if you
hire a new employee and invest in that person, if there is a
credit for a small amount of time, maybe a year or two, but I
think that is something that would help.
Mr. KELLY. You know, and I want to highlight real quick--I
mean, Mr. Carter, they do some high-tech stuff. When people
think of Mississippi, they don't think about the things that I
got to use as a soldier in Iraq that I was the beneficiary of
it saving my soldiers' lives. I visited other countries that
also used the products and things that they develop. We are not
in the right environment to talk about what those are, but for
the most part these are Mississippi folks with Mississippi
minds. So we may talk funny to other people, but I can tell
you, our minds I will put up against anybody's in the world,
whatever business that you are in.
With that, I yield back to you, Mr. Chairman.
Chairman CHABOT. Thank you.
The gentleman yields back.
One thing I probably should mention, my mom was born and
raised in North Carolina, Charlotte, North Carolina, so I think
you all talk just fine.
But in any event, I am going to ask just a couple of
questions, and then I am going to turn it over to Mr. Kelly
again to wrap up with any questions that he might have. I again
want to say that the panel has been, I think, very good in
answering all of these questions and really helping us. What we
learn here today and what we hear today we take back to our
colleagues on the Committee, and they in turn take it back to
the rest of the members of the House of Representatives. We
also have Committee folks from Washington that are taking down
all this information that they will take back to the staff,
too.
So everything that goes on here ultimately goes back there,
and then we try to use that when we are looking at new
regulations or getting rid of regulations, or new legislation
that we might introduce and that sort of thing. So that is
basically the type of thing that we are accomplishing here.
Mr. Woods, I wanted to go back and ask you something. I
have been hearing--now, this isn't the Agriculture Committee,
but I know there has been a drop in net farm income in recent
years.
Mr. WOODS. Yes, sir.
Chairman CHABOT. What impact--because as a farmer,
obviously, you are the definition of a small business. What
impact is that having? Is there anything that you think should
be done either out of Washington or through the Small Business
Committee, anything that you can come up with that we ought to
be working on to assist the Agriculture Committee that is kind
of struggling right now?
Mr. WOODS. Well, we have a lot of associations that we are
part of, you know, the Farm Bureau being one of them, who
really advocate for farmers, and they do an excellent job.
Chairman CHABOT. Yes, they come by our office a couple of
times a year.
Mr. WOODS. Well, we are glad. We hope they come by more.
But as a member of that and other organizations, we are just
pushing hard because all these commodities are traded, and that
has an effect on investors getting in the market because they
are not doing well in another sector, so they come in and they
drive the prices up. So we get to benefit them, but we are at a
five-year low at this time. We are looking at potential trade
wars that certainly have a big effect on what our future may
be. The average farmer is a little over 60 years old, and I am
61, so I am right in the median of that. We are encouraging
young farmers to come and try to get help, but all this with
the creditors, they are all looking at the bottom line.
But to help us with the markets, the reporting bureaus,
sometimes they miss the mark on how many million bushels of
corn are out there, or how much exports are, and sometimes they
come back and say, oops, we made a mistake. Well, that was 30
cents a bushel later, and we are in the hole. I am not sure how
you correct that, and I am sure they are doing a good job, the
best they can. I am not going to try to be a Monday night,
armchair quarterback on that.
But there are just so many things. Somebody can breathe
wrong and the markets go out. I mean, I don't know. We can't
control Mother Nature, so I know that is not the case. But I
think keeping the safety net of the Farm Bill is a certain way
to keep the farmers where they just don't fall on their face
100 percent. With the Farm Bill that you ought to try to work
on, I applaud your efforts, and as a cotton farmer I
appreciate--we got left out in the rain in the last one, so we
are hoping that we will be taken care of this time.
But we are at the mercy of the markets. We buy everything
at retail and sell everything at the lowest common denominator.
I wish you could tell me that and I would figure out how to be
very successful.
Chairman CHABOT. Thank you very much.
Joe Harts, who is our representative here from the Small
Business Committee staff, reminded me that the Farm Bureau will
be testifying before the Small Business Committee in Washington
this week. So we will be hearing from them, and I know, as I
mentioned before, they are very often letting us know what is
happening out there in the farming community.
Mr. WOODS. Well, we depend on them a lot.
Chairman CHABOT. Yes.
And then my last question would be for anybody on the
panel, any or all that would like to answer.
I would say there have been two major things that have
really impacted small businesses positively in the last year,
year-and-a-half. One is--and I think it has already been
reflected here by the testimony here this afternoon. That is
the Tax Cuts and Jobs Act that was passed that President Trump
signed into law recently.
The other thing is the President coming into office and
saying that he wanted to get rid of two regulations, existing
regulations for every new one that the bureaucracy and Congress
comes up with in Washington. We have made some real progress in
that.
But what I am wondering is, is there anything that is still
out there in red tape and regulation as a small business person
that you think, boy, this is one that I sure wish they would
either modify or get rid of it or it just doesn't make sense
anymore, or whatever?
So I will just go down the line for whoever wants to go
first is welcome to. But is there anything out there that you
think we ought to take a look at in the area of regulation that
you would like to see changed? And then after I am done I am
going to turn it over to Mr. Kelly and we are going to wrap up.
Mr. CARTER. Well, I certainly agree with Mr. Bailey on his
comments on the health care. For my business, we pay 100
percent of our employees' health care costs, and that is the
most expensive--that is the top line----
Chairman CHABOT. That is rare these days, 100 percent. I
commend you.
Mr. CARTER. It is actually more than the next six items
combined. In order to attract and retain the kind of talent
that we require, and to keep them from escaping to Huntsville,
those are the kind of benefits we have to offer.
Chairman CHABOT. Thank you.
Anybody else?
Mr. HATCHER. If I may, Chairman Chabot, I would like to
back up to you, Congressman Kelly, and your reference to the
educational system. Let's not forget those that are not
attending higher education and whatever help could be assisted
through the high schools or vo-technical schools. There is a
lot of opportunities there.
Mr. KELLY. I agree. I mentioned high schools, and we have
here at DeSoto County, we have a great vo-tech system here that
does not just the ones that we went through as students, but
they do high-tech jobs that are things that people like me
couldn't get in. But they are high tech, and they are very,
very good in DeSoto County. We have some model programs here
that other people should look at.
Chairman CHABOT. My time has expired. So, Mr. Kelly, if you
have any additional questions?
Mr. KELLY. Just very quick. We were talking about Farm
Bureau, Mr. Chairman, and we had the President, Mr. Mike
McCormick, and his congressional liaison I think is what he
calls him, Justin Ferguson, who is here. They are in our
office, but they are also here in this meeting. They are
engaged in our small businesses across this state, and I thank
Mike as the president for being here.
I also want to once again thank my friend, Brian Rigby, for
making this venue available.
Now, I want to ask you guys just very quickly, about 30
seconds each, what advice would you give entrepreneurs who are
considering starting or relocating their businesses to North
Mississippi? My experience has been workforce, infrastructure
availability, and also the cost of doing business here in
Mississippi. So you can talk about if those things apply to you
or whatever else you think why people ought to move here from
somewhere else and start businesses here in Mississippi.
Mr. Bailey?
Mr. BAILEY. My advice for somebody starting out would be--I
don't know about regulations, but just to go for it and do it
as hard as they can, with the love and passion they would do
with anything else.
As far as why Mississippi, our cost of doing business and
starting a business is a lot lower than it is everywhere else
in the nation just because of the price of rents, the price of
utilities, the price of just everything is lower, which is
great. Our state tax is not that burden on small businesses,
which is a wonderful thing.
The only thing I would say is if you are starting out and
you are young, have a good accountant, because you don't want
to all of a sudden get an oops of here is an additional $15,000
that you have to pay to the government. So have a good
accountant.
Mr. KELLY. So it is basically those payroll taxes. I know,
I was there. And then you have to write a check for a 25
percent penalty and 15 percent. So you spend a lot of money you
didn't have to start with.
Mr. BAILEY. Exactly.
Mr. KELLY. Mr. Hatcher?
Mr. HATCHER. I would always recommend or suggest people to
come to North Mississippi. It is the quality of life. The
quality of life here is unparalleled to any other areas. The
tenacity and the perseverance to be an entrepreneur is just
strap on your boots.
Mr. KELLY. Mr. Carter?
Mr. CARTER. Well, considering my wife just started her own
small business and has been working closely with the SBA and
our local bank, I would definitely recommend anybody to take a
long, hard look at Mississippi if they want to start a small
business, not only the people and our education system but just
the support in general that you just get from being in
Mississippi.
Mr. KELLY. And Mr. Woods?
Mr. WOODS. Y'all come.
[Laughter.]
That is what we are. We are the hospitality state. We make
people feel welcome. People can come here and start a business
and get some good people that will work hard. If you have the
heart to want to go through that first five years to kind of
get over the hump, and I agree with the accountant statement,
you just have to keep up with where you are, know where you
are. As my banker told me one time when he made me a loan to
start the company, he said don't walk in here and just tell me
without having something prepared. I already know what you
need. Explain it and believe it, and then we will try to help
you. You just have to have that heart of wanting to succeed
before you ever start.
Mississippi, especially North Mississippi, is a wonderful
place. I wouldn't want to be anywhere else. I have had people
come here to start businesses that I know, and they said it was
the best thing that ever happened to them.
So, thank you all for letting me make some remarks.
Mr. KELLY. And I am going to take a privilege of playing on
my home field. But the other thing is our work ethic here is
second to none. We have great community colleges and
universities, all of which do great training and workforce. And
I think something that is often overlooked in Mississippi that
maybe other parts of the world don't have, we got river, rail,
and major highway systems to everywhere in my district, right
here in DeSoto County. We are not that far from the Mississippi
River. Over on the other side of my district we got the Tenn
Tom Waterway, which is the least expensive way to move major
products. We have rail and highways that connect those, major
interstates, and I think that is really good.
Our governor and our state really works hard to bring
industry into Mississippi.
And with that, Mr. Chairman, I yield back.
Chairman CHABOT. Thank you very much. The gentleman yields
back.
In wrapping up this hearing of the House Small Business
Committee, I would just make a couple of comments.
First of all, if I didn't live in Cincinnati, I think I
would want to live in Mississippi after what I have heard here
this afternoon, some real fine people and excellent testimony
from really an excellent panel of witnesses here. Your
testimony was very good, very helpful, and the answers to the
questions were also very helpful.
Just in saying a couple of things about your
Representative, Trent Kelly, you all know Trent Kelly, but what
you don't necessarily know is how others of his colleagues in
Washington think about him. He is very, very respected among
other Members of Congress on both sides of the aisle, both
Republicans and Democrats. It is not often that a member, in as
short a time as Trent Kelly has been in Congress, to be a
subcommittee Chairman already. He, of course, as I mentioned
early on, he is the Chairman of the Investigations, Oversight,
and Regulations Subcommittee, which is a very important area,
and it is small businesses all across the whole country.
Seventy percent of the new jobs in America are created by small
businesses. So it is very important.
Of course, you also don't become a general without having a
lot of leadership abilities and being a leader of men and
women, and having served our country I believe two terms in
Iraq. He literally saved a bunch of lives, as you may know,
about a year ago on a ball field outside Washington, D.C. when
he was literally in the line of fire of a shooter there, and
not thinking of himself but thinking of the others. He was the
closest person to that gunman, and he wasn't thinking about
himself, he was thinking about others.
Now, I wasn't there. My contribution to the Republican
baseball team was not being on the team.
[Laughter.]
But Trent warned all the other persons. He said, ``Shooter,
active shooter.'' There is no question he saved lives that
morning.
But beyond that, he is really an excellent member of
Congress, and I would say just on a personal level I think you
are lucky to have him representing you, and it is an honor to
serve with him.
At this time, that concludes my remarks. I would now like
to turn it over to Trent for any closing remarks he might have.
Mr. KELLY. I am just going to be very brief.
Thank you, Mr. Chairman. Again, I am grateful that you were
able to travel here to Southaven this afternoon and listen to
my constituents and see where I live and see what is important
to us.
As I said in my opening statement, and I know you agree,
the best ideas come to Washington, not from Washington. And
while the economy is currently thriving, we need to pay close
attention to how our small businesses are evolving. Of
particular concern to me as I represent a large amount of rural
areas here in Mississippi is how businesses and our small towns
are faring because they face a unique set of challenges than
their more urban counterparts do.
I appreciate each of our witnesses taking time away from
your businesses and busy schedules to provide the Committee
testimony.
I also want to thank each of you in the audience for coming
and listening today.
And finally, once again, thank you to Chairman Chabot for
spending the day with us here in Mississippi, and I yield back,
Mr. Chairman.
Chairman CHABOT. Thank you very much.
The gentleman yields back.
In conclusion, I would ask unanimous consent that members
have 5 legislative days to submit statements and supporting
materials for the record.
Mr. KELLY. Without objection.
Chairman CHABOT. Without objection, so ordered.
If there is no further business to come before the
Committee, we are adjourned.
Thank you very much.
[Whereupon, at 3:20 p.m., the Committee was adjourned.]
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