Walsh Holds Field Hearing on the Impact of High Gas Prices on Small Business
Hoffman Estates, IL,
Jun 25, 2012 -
Small Business Subcommittee on Economic Growth, Tax and Capital Access Chairman Joe Walsh (R-IL) today held a field hearing in Hoffman Estates, IL, on the effects of high gasoline prices on local small business.
Energy is a major cost in a substantial share of small businesses. One in 10 small business owners claim that energy is their single greatest cost, greater than wages and salaries, materials and supplies, etc. Another 25 percent claim energy is one of the two or three largest business costs they have.
“Small businesses deal with a host of burdens every day, including the high cost of gasoline,” said Chairman Walsh. “This increased cost of doing business is either absorbed by the company - diverting resources away from investment and expansion - or passed along to cash-strapped consumers who have already tightened their belts and cut back. While fuel prices have moderated somewhat from their recent highs, the price of fuel is still about 30 percent higher than two years ago. Overall, Americans are paying about 90 percent more for gasoline than when President Barack Obama took office in January of 2009. The testimony from today’s hearing was unanimously consistent - high energy costs are a roadblock to economic recovery and job creation that will not be cleared until America increases its domestic energy production and decreases its reliance on volatile foreign oil.”
For related hearing documents, click here.
Notable Witness Quotes:
Phil Kerr, President of Home Medical Express, Inc. in Elmhurst, IL said, “Fuel costs now represent 3 percent of our revenues, up from 2 percent in 2009. By itself, that may not seem like much. But in 2009 our annual fuel costs were $126,000 and reached $247,000 by 2011, a 95 percent increase in costs while our business only grew 43 percent. Had the fuel costs stayed flat, we would have been able to hire four more staff members with health insurance benefits and four more delivery vehicles.”
Richard Sade, Vice-President of S&S Hinge Company in Bloomingdale, IL said, “As with anything in life, one size does not fit all. But this is certain; the U.S. must become more self-reliant on fuel sources. This will improve market stability and help small businesses plan for the future. To support manufacturers, the government should explore all domestic options available that will mean real fuel cost reductions. Especially in an election year, politics can trump good policy and manufacturers cannot afford it when politicians play politics with their livelihood.
“Federal programs intended to foster new energy efficient technologies are often directed at larger manufacturers and lack a small business requirement. The government should work with the private sector to authorize and support the investment in domestic energy sources and alternative fuel. The government has not effectively explored all domestic conventional and alternative sources.”
Larry Smith, General Manager of Lurvey Landscape Supply in Des Plaines, IL said, “I do believe we as a nation must roll up our sleeves and get to work on any and every strategy to develop both traditional and nontraditional energy sources. There is no question that recent high fuel prices and price uncertainty have dramatically impacted our profit margins, and our ability to take risks investing in new employees and equipment. We would welcome actions that bring some relief.”
James Zuber, Owner of Jc3 Trucking, Inc. in Newton, IL said, “While today diesel prices are around 17 cents below what they were a year ago, they are still very much on the high side of recent history. Even with recent declines, the challenges faced by small business truckers have certainly not declined. This is because fuel prices do not occur in isolation. Over the past few years, the trucking industry has been laboring under a steadily increasing amount of regulations from the Department of Transportation, the Environmental Protection Agency, and other agencies. While there is certainly a need for sensible regulation, trucking – especially small business trucking – has been assaulted by a barrage of unnecessary and costly regulation which, when coupled with the rising cost of fuel, are certain to force some small business truckers to park their vehicles. Unfortunately, the answer for many in government to the challenge fuel prices present to truckers is more regulation – instead of common-sense actions like expanding access to American energy.”