From the barbershop around the corner to the entrepreneur working solo to launch a business venture, small businesses form the cornerstone of Ohio’s economy. Small business owners comprise 98 percent of all employers in Ohio and employ half of the state’s private sector labor force. Large corporations may attract a sea of job applicants every year, but small businesses create every three out of four jobs in the state.
Clearly, there is nothing small about small business in Ohio.
The stakes are high for entrepreneurs and small business owners who face formidable start-up fees, a sizable tax burden and burdensome regulations in many states around the country. In traditional industries like manufacturing, Ohio has historically struggled to find the right balance of incentives to attract and retain employers.
Fortunately, times are changing.
This General Assembly, the Ohio Senate has taken several major steps toward creating a more favorable business climate for small businesses and attracting new investment to the state. We recognize the tremendous value of the innovation and hard work that small business owners bring to Ohio, and we can’t afford to give them anything less than our measure of support.
One of the steps we took to reduce barriers to business creation and investment was to reduce Ohio’s business filing fee by 21 percent, from $125 to $99. Some states report filing fees as high as $500 and require additional fees, but we have committed to charging less than $100 in recognition of the financial barriers entrepreneurs already face when launching a new business.
Another step we have created to support small business is to expand access to OhioMeansJobs.com to all Ohio businesses. By connecting small businesses to resources they need to hire skilled employees, we play a critical role in bridging the gap between talent and opportunity. OhioMeansJobs.com offers employers the opportunity to post jobs, search resumes, learn about hiring veterans and disabled individuals, and access a sizeable list of federal and state employment programs. In Shelby County, the Sidney-Shelby Economic Partnership and the Sidney-Shelby Chamber of Commerce serve as a local nexus for many of these programs and opportunities. From financial and technical assistance to job creation tax credits, resources abound for small businesses looking for a competitive edge.
We also focused on supporting small businesses in the two-year state operating budget that took effect this month. The budget plan makes permanent a 75 percent tax deduction on the first $250,000 of small business income for the current fiscal year and takes it to a 100 percent deduction next year. Above the $250,000 income level, tax on small business income is capped at a 3 percent flat rate.
Creating the efficiencies necessary to afford a tax cut of this magnitude was not easy, but we know that success for the small business community means success for Ohio. When it comes to supporting entrepreneurs, we can’t afford not to act. Every dollar small business owners save from this tax cut is another dollar they can put toward buying equipment, renting space and creating jobs. By cutting Ohio’s overall income tax rate to the lowest level since 1982, the budget plan also leaves more money in the pockets of Ohioans who support small businesses.
These policy changes—reduced business filing fees, access to online job resources and significant tax cuts—advance the effort to remove the barriers that are keeping Ohio’s economic growth engine from reaching full speed.
In the past several years, Ohioans have already experienced the first fruits of success. In 2014, a record-setting 93,775 new businesses sprang into being, the fifth consecutive year that the Ohio Secretary of State’s Office received a record number of new business filings. Since the beginning of 2011, Ohio employers have created 360,000 new jobs. Every one of these jobs provides an Ohioan with the promise of self-determination and independence. Without a prosperous and thriving private sector, Ohio cannot prosper and thrive.
Economic transformation does not happen overnight, but it’s happening all around us. It starts locally with the shops and start-ups down the street from our homes. It starts with entrepreneurs who decide to take a risk and create something new. My job as a public official is simply to create an environment that incentivizes hard work and innovation. By opening the door to success for small businesses, we open the door to success for Ohio.
The writer represents Ohio’s 12th Senate District, which encompasses all of Allen, Champaign, Mercer, and Shelby Counties as well as portions of Auglaize, Darke, and Logan Counties. He currently serves as President of the Ohio Senate. Learn more at www.OhioSenate.gov/Faber.