Archive for April, 2012

California Bill Would Kill Small Business

Monday, April 2nd, 2012

Because the California Department of Transportation is short on cash, Assemblyman Ben Hueso is suggesting that the state should set up shop along the interstate, jeopardizing 12,852 businesses that operate along the interstate employing more than 188,000 state residents.

Assemblyman Hueso fails to recognize the tremendous advantage that a concessionaire offering food and fuel at the rest area would have over the businesses at the exit. As any fuel retailer, convenience store operator or fast food franchisee knows, location is one of the primary drivers of customer traffic. Under Hueso’s plan, the state and their rest area concessions contractor would be the winners. The business people who paid top dollar for their properties at the exit interchanges would be the big losers as the traffic is siphoned away from the exits to the shoulder of the interstate.

A recent study conducted by the Virginia Tech Transportation Institute confirmed that gas stations, restaurants, convenience stores and truckstops would lose up to 46 percent of their sales if commercial rest areas were permitted. California is risking thousands of businesses and jobs to save $13 million, which represents just 0.12 percent of California’s $11 billion transportation budget and .009 percent of the overall state budget.

Furthermore, California would be robbing Peter to pay Paul by transferring local tax revenues to state coffers. California has said that it could collect $3 million in lease payments and $7.5 million in sales tax revenues for the state. Existing businesses pump nearly $64 million in local tax revenues into their communities to pay for schools, fire and police departments and other local services — all of which would be lost as existing small businesses fail.

Assemblyman Hueso has said that commercial rest areas are a “good opportunity to do a number of things.” Killing businesses and jobs hardly seems like a good idea.