Health Care and Education & Workforce Development and Government and Economic Development and Small Business

New NFIB boss knows politics: State chapter to devote more time to campaigns

February 26, 2007

Kevin Hughes cut his teeth in the political world. Now he's taking a bite out of small business, as the new state director for the National Federation of Independent Business.

Hughes, 30, has never owned his own business, but he worked for six years at the Ohio State Legislature as a legislative aide and for the Senate Republicans there. He also worked on several campaigns.

In 2004, Hughes took a job as the Midwest regional political director for NFIB in Columbus, Ohio.

His years in politics have served him well. Usually dressed in a suit and tie, he comes across as polished. And since starting the new post in late January, he has spent most of his days at the Indiana Statehouse trying to carry the message of the group's 14,000 members.

That alone can be a challenge. The group's membership ranges from one-person firms to private companies with 900 employees-everything from hair salons to accountants to small manufacturers.

As a result, a majority of the group often can't agree on particular issues, such as tax rewrites that may lower one type of tax while raising another.

"What might be good for some of our members may be bad for others," Hughes said.

Standing up for the little guy

Still, many member firms are small, with 25 or fewer employees. While NFIB usually agrees politically with other businessbacked heavy hitters, such as the Indiana Chamber of Commerce or the Indiana Manufacturers Association, when there is a split, it's because NFIB is looking out for the smaller guys.

"They don't have the Eli Lillys of the world as members, they have the businesses who are our neighbors," said state Rep. Randy Borror, R-Fort Wayne, a member of the House Small Business and Economic Development Committee.

That's why Raine Inc. President John Raine is a member and very active on the county level. The Anderson-based company has 14 employees who make and sell nylon gear to police, paramedics and the military.

"In ... Indiana, the chamber very much takes the concerns of the larger manufacturers over small business if push comes to shove," Raine said. So he works on his county's NFIB action council, which hosts educational forums with local lawmakers, and at the state level "as a matter of necessity."

"Government is very intrusive and I believe in preserving the free-enterprise system," he said.

To gauge what members want, the federation sends out a lengthy annual survey on issues that might come up at the General Assembly. As bills move, the group sends out blitz faxes and e-mail to garner thoughts and encourage members to contact lawmakers.

"[This job] is about listening to a thousand voices and trying to gauge the majority opinion," Hughes said.

The grass-roots nature of NFIB's work helps bend the ears of legislators.

"When we hear from somebody back home, that's the most effective form of lobbying," said state Rep. Tim Harris, R-Marion, the ranking Republican on the House Small Business and Economic Development Committee. "It would stun people to know how few calls we get from back home."

Sometimes on the sidelines

The diverse interests of its membership often means NFIB has to sit on the sidelines for big debates, such as last year's fight over whether to lease the Indiana Toll Road or this year's proposal to raise the cigarette tax to expand state-sponsored health coverage for the uninsured.

Tobacco-store owners along the state's border with Michigan or Illinois hate the proposed tax hike because it would hurt their business, for example, while other small-business owners like the idea of their employees qualifying for the newly expanded coverage.

"We tend to stick to the big-tent issues," Hughes said, lobbying most actively only on issues where most members agree.

For his members, the No.1 issue is the rising cost of health care-a battle the group is taking up on the federal level, pushing for solutions including allowing small businesses to band together across state lines to buy coverage. Such legislation made progress last year, Hughes said, but, with Democrats retaking the U.S. Senate, it likely won't go far this year.

At the state level this year, the NFIB is putting its energy into battling proposals to increase Workers' Compensation rates and the minimum wage.

State law sets the rules and reimbursement rates for workers hurt on the job and treated through their employer's Workers' Comp coverage, and requires employees who are injured to go to a physician chosen by their employers.

But bills pending in the House would increase the reimbursement rates and allow workers to choose their doctors-changes the NFIB opposes because it would mean increased costs for self-insured small businesses.

Hughes said his members also disagree with increasing the minimum wage, a stance he concedes many might not understand. He said most of his members pay more than the law requires, but for those few who can't afford more, a hike "will have a severe effect on their bottom line."

Still, some members have a hard time swallowing those positions.

State Rep. Dave Crooks, D-Washington, owns a small radio station in the southwestern Indiana city that employs 12. Crooks said he could never pay anyone only $5.15 an hour, and that Indiana's injury reimbursement rates are so low they're "an embarrassment."

He's a member of NFIB and on the House Small Business and Economic Development Committee but rarely finds the federation's stance in line with his beliefs.

"They put so much effort into these issues and I think it's unfortunate," Crooks said.

Hughes also will be watching the budget, trying to encourage less spending and keep an eye on a House Democrat proposal to change property taxes to make sure any cuts for homeowners don't cause "the burden to be placed on the back of small businesses."

Despite these ongoing legislative scuffles, Indiana is generally seen as very businessfriendly, especially compared to neighbors Illinois and Michigan, Hughes said.

Focusing on campaigns

Going forward, the marching orders from the NFIB's national office in Washington, D.C., are to beef up campaign fund raising at the state level. Money the organization raises either is given to a candidate's campaign committee or is spent by NFIB to run ads lauding legislators they support.

NFIB Indiana's political action committee raised almost $45,700 in 2006 and spent $79,400, tapping into previously raised funds. Still, that's small potatoes, compared to the Indiana Chamber of Commerce PAC's $526,600 and the Indiana Manufacturers Association PAC's $130,800.

While the group is bipartisan, it's only barely so. In 2006, it endorsed 21 candidates for the General Assembly. Only two were Democrats.

Although the NFIB's political wing never has had the money of heavy hitters, it does have the street cred of thousands of small businesses behind it.

"It's never been a major player as far as campaign contributions ... but the seal of approval from the NFIB means a great deal," Borror said.

In his former position as regional political director, Hughes helped direct the NFIB's efforts to tap into that fount of goodwill by running radio ads in the 2006 general election. The ads featured local small-business owners who spoke about why they back a candidate.

"It comes back to small business being viewed in a very positive light," Hughes said. "With the credibility that gives [a campaign], it's difficult to measure that kind of impact."
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