One of our Coalition members has been racking up accolades recently:
- 2013 INC 5000 member
- 2013 state “manufacturer of the year” nominee
- 2014 INC 5000 member (albeit a much lower rank)
- 2014 county chamber “small business of the year” winner
- 2015 state “manufacturer of the year” nominee
Everything sounds great, right? Well despite these successes, this small manufacturer could have grown so much more if not burdened by $15,000 to $20,000 per month in higher taxes because of GSP expiration. In fact:
- 2014 ended 4 straight years of double-digit employment growth rates
- plans to break ground on a (further) expansion in 2015 were put on hold indefinitely
- stagnant revenue will keep the company off of the 2015 INC 5000 list
We often publish data about the tax costs of GSP expiration, but that’s only a small part of the story. GSP expiration prevents good – and even great – companies from reaching their full potential.
Our survey last year showed this as well, where 44 percent of respondents reported hiring freezes because of GSP expiration. The impacts were particularly hard on small businesses with less than 25 employees. This includes McGuire Manufacturing in Cheshire, Connecticut, a small manufacturer with 20 employees. As McGuire President Mike McRoberts said at the time:
“As a result of GSP expiration, we have allowed attrition to reduce our workforce by two fulltime positions. I’d like to replace them, and would do so immediately if Congress renews GSP retroactively, but I can’t right now.”
That same survey showed 40 percent of companies reporting capital expenditure delays, which have a ripple effect on other local businesses. Small businesses like B&C Technologies, which has 28 employees in Panama City, Florida, are among the hit hardest once again.
B&C imports industrial and commercial laundry equipment from Thailand under GSP. In March 2014, it bought a building in Panama City Beach with a plan to begin manufacturing in the United States by April 2015.
According to B&C President Bengt Bruce, that goal now has slipped to July 2015 – at the earliest – and plans have been scaled back “quite a bit.”
Instead of a complete overhaul of the building (e.g., new floors, walls, re-designed space) that would have generated significant work for local contractors, B&C is doing only what is necessary to move into the new office space.
None of these impacts show up in the trade data, but they are the practical result of Congress’ continued failure to renew GSP.