Grassroot Perspective – April 23, 2003-New SBSC Study Shows NYC Tobacco Tax Hike Kills Jobs, Hurts Businesses; SBSC Chair Testifies on Health Care to House Small Business Committee; SBSC Reminds Senate Judiciary Committee About Asbestos Litigation Impact on Small Business; What is the Kyoto Protocol?

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”Shoots (News, Views and Quotes)”


– New SBSC Study Shows NYC Tobacco Tax Hike Kills Jobs, Hurts Businesses

Last week SBSC released a 57-page case study on the impact of New York
City’s tobacco tax increase enacted last year, which raised the
cigarette tax from 8 cents per pack to $1.50 per pack.

“Our findings show New York City’s tobacco tax increase has been a
complete disaster,” said SBSC President Darrell McKigney. “Almost 90%
of small businesses that sell tobacco have been hurt by the tax
increase. In return for the enormous damage inflicted on New York City
small businesses, the tax increase has resulted in less than half the
revenue projected for New York City, a huge net loss in New York State
revenues, and put thousands of people out of work. And in spite of the
stated aims of the tax increase proponents, most smokers say they aren’t
consuming less. They’re just finding new sources to avoid the tax.”

Among the key findings of the SBSC study:

88 percent of NYC stores with tobacco sales say they’ve been hurt by the tax
increase. Total profits for NYC stores have decreased by an estimated
$127 million.

The NYC tax increase will result in over 10,000 lost jobs.

The NYC tobacco tax will generate less than half the revenue projected
for New York City, and will result in a net loss of $15 million to $217
million for New York State.

To read the full report, please click here:

– SBSC Chair Testifies on Health Care to House Small Business Committee

SBSC Chairman Karen Kerrigan testified on behalf of the Small Business
Survival Committee recently to the House Small Business Committee in
regards to the health care issue, and the affects on small business.

“The cost of health insurance has truly become a hindrance to the growth
of small firms, diverting precious resources away from job creation and
investment. An under-performing economy has not helped either. Quite
simply, small businesses are in a vise — a health insurance cost
squeeze, if you will.

The pervasive increase in the cost of health insurance continues
unabated. The Council for Affordable Health Insurance (CAHI) recently
reported: “health insurance premiums are rising about 15 percent on
average, but many individuals and businesses are seeing increases of 30
percent to 40 percent.” A December 2001 report from Fortune Small
Business estimated that health insurance premiums rose 55 percent faster for
small businesses compared to large firms during 2001. In my regular
discussions with small business owners and entrepreneurs, premium
increases are running even higher than these “official averages”. It
has become commonplace for business owner to cite increases as high as
60 percent or higher.”

To read Kerrigan’s full testimony, please click here:

– SBSC Reminds Senate Judiciary Committee About Asbestos Litigation
Impact on Small Business

In a letter to Senate Judiciary Committee Chairman Orrin Hatch, SBSC
Chairman Karen Kerrigan wrote, “It is our strong belief that the current
state of asbestos litigation is on a path that will cripple our economic
viability and the engine that drives it – small businesses. With many
of the traditional defendants, asbestos manufacturers, being forced into
bankruptcy, eyes have now turned to thousands of small businesses that
at one time were considered peripheral defendants at best. These small
companies, many of them less than 100 employees, never once marketed or
manufactured asbestos but now are being targeted in these suits.

“Small business owners can’t afford the armies of lawyers that larger
companies can employ. Nor, can their insurance coverage handle the loss
of a major lawsuit. Therefore, many small businesses simply elect to pay
an unmerited settlement rather than risk losing a large-scale lawsuit
and going bankrupt.”

To read the entire letter to Judiciary Committee Chairman Hatch, please
click here:

Above articles are quoted from Small Business Survival Committee, SBSC
Weekly Briefing March 12, 2003

– What is the Kyoto Protocol?

By Environment & Climate News staff

Published: The Heartland Institute 02/01/2003

The Kyoto Protocol on global warming is an amendment to the 1992 United
Nations Framework Convention on Climate Change (UNFCCC), more popularly
known as the Rio Treaty.

Whereas the Rio Treaty set voluntary goals for reducing greenhouse
gases, the Protocol requires participating developed countries to reduce
their greenhouse emissions by 5.2 percent of 1990 levels by 2012. The
goal for the U.S. was to have been 7 percent below 1990’s level. The
United States withdrew from the Kyoto Protocol last year, but remains a
party to the 1992 Rio Treaty.

The Protocol goes into effect when no fewer than 55 parties to the
UNFCCC accounting for at least 55 percent of the total carbon dioxide
emissions for 1990 have ratified, accepted, approved, or acceded to the

According to the Web site of the United Nations Framework Convention on
Climate Change (, as of December 20, 2002 101
countries accounting for 43.9 percent of global man-made carbon dioxide
emissions had ratified the Protocol. The Protocol was most recently
ratified, in December, by Canada, New Zealand, and Poland.

Above article is quoted from Heartland Institute, Environment & Climate
News February 2003

”Roots (Food for Thought)”

From the Heritage Foundation

In the 1980’s TV series, Hitchhiker’s Guide to the Galaxy, galactic
explorer Arthur Dent discovers that the ultimate answer to “Life, The
Universe, And Everything” is the number 42. While we can’t claim to have
solved the deep mysteries of the cosmos, we are confident that the 42
ideas presented here have the power to expand freedom and prosperity in
our corner of the world. In this report, the staff and scholars of the
Goldwater Institute offer dozens of specific ideas for the legislature
to consider in crafting state policy this year, and beyond. These
proposals range from making cars more affordable (Idea 11) to creating
thousands of new jobs (Idea 27) to giving children in troubled schools a
passport to success (Idea 6).

42 Ideas for Freedom and Prosperity on the State Level


The most successful states in the nation offer educational options to
parents and students with innovative programs such as choice among
traditional public schools, charter schools, private schools, and
scholarship programs. That flexibility allows families to find programs
and schools suited to their children’s individual abilities,
temperaments, needs, and interests — a process that ultimately results in
improved academic achievement.

Columbia University researchers recently examined 35 studies of choice
programs across the United States and concluded that “a sizable majority
of these studies report beneficial effects of competition across all
outcomes.” Likewise, a Goldwater Institute examination of reading and
math test scores in Arizona found similar effects from charter school

All children, not just a select few, deserve educational opportunities.
Legislators should open doors until every child has an opportunity for
educational success. The following ideas are excellent means to
achieving this goal. 1. Adopt English language mastery scholarships. 2. Invite the participation of local businesses in tuition-scholarship credits. 3. Enforce open-enrollment policies. 4. Level the playing field between traditional public schools and independent schools by granting parents a tax credit or deduction for K-12 tuition payments. 5. Review provisions for students with special needs, and consider appropriate reform. 6. Include a school choice option for children in failing schools.


State laws contain measures that prevent producers of goods from selling
directly to consumers. That reduces competition and hurts consumers by
causing them to pay higher prices and limiting their choices. Those laws
also hamper the development of the growing sector of e-commerce. State
legislatures should provide relief to consumers and restore free
exchange by eliminating those laws. 7. Permit competition in the
provision of electricity. 8. Permit competition in electric distribution
services. 9. Ensure that environmental policy decisions are made by the
legislature. 10. Restrict the power of state corporation commissions to
levy taxes for subsidies and social policies. 11. Expand competitiveness
in the market for automobile sales by eliminating laws that protect auto
dealers from competition. 12. Liberalize state markets for beer and wine
by eliminating mandatory middlemen. 13. Eliminate state racing and
boxing commissions and allow self-regulation in those sports akin to
that found in football, baseball, and other sports. 14. Eliminate the
state nursing boards and allow for regulation by private associations
specializing in certification, such as the American Board of Nursing
Specialties, the American Association of Critical-Care Nurses, the
Oncology Nursing Certification Association, the American Board of
Perianesthesia Nursing Certification, and the Emergency Nurses
Association. 15. Eliminate state optician boards and allow organizations
such as the American Board of Opticianry to regulate opticians. 16.
Eliminate the Board of Barber Examiners and Board of Cosmetology.


17. Repeal “campaign finance reform” laws. 18. Preserve state term limit laws.


19. Convert carpool lanes to carpool/toll lanes. 20. Reduce air pollution by targeting superemitting vehicles. 21.Thin out traffic congestion by replacing existing highway taxes with congestion-based pricing. 22. Encourage more efficient use of existing streets and freeways through improved traffic signal coordination and flexible employment policies. 23. Allow for private construction and management of state roadways.


24. Restore inflation indexing of the personal income tax code. 25.
Conform the state tax code to new federal depreciation rules. 26. Equalize personal and corporate income tax rates. 27. Lower income tax rates to a regionally competitive level. 28. Suspend and/or reduce the unemployment insurance tax. 29. Eliminate the corporate income tax. 30. Replace the state income tax system with a consumption-based flat income tax. 31. If sales tax exemptions must be eliminated, lower the sales tax rate or eliminate the income tax.


The property tax is a tax on capital, so a high property tax on business
deters capital investment, thereby leading to slower economic growth and
reduced income. High property taxes reduce small business starts and the
opening of branch plants. A 10 percent increase in the property tax in a
state has been found to lead to as much as a 6 percent decrease in
resident income. Property taxes also depress property values. A study
looking specifically at the Phoenix metropolitan area found that a 10
percent increase in the property tax rate leads to a 3.9 percent
decrease in property values. The Legislature could take an important
step toward encouraging investment and economic growth in the state by
simplifying the property tax and making it fair and uniform. Listed
below are reforms that policymakers should implement to reduce the
burden of the property tax and help the state’s economy. 32. Reduce
taxes on business property. 33. Eliminate perverse incentives in the
current property tax system. 34. Provide property owners with true
taxpayer protection.


35. Enact a zero-based budgeting rule. 36. Eliminate needless spending. 37. Eliminate duplicative spending. 38. Devolve some state programs to localities and contract others out to private management. 39. Convene a budget realignment commission. 40. Enact a strong constitutional spending cap.


Property rights are under erosion on the state level throughout the
country. In Arizona, for example, municipalities in recent years have
increasingly used their condemnation powers for purely private purposes.
Much of this encroachment has been enabled by the enactment of the 1997
redevelopment statutes, which effectively remove any meaningful content
to the constitutional requirement that property be taken for public use
only. Under the new regime, with municipalities acting as strong-arm
real estate brokers in what have traditionally been private land deals,
condemnation “horror stories” have begun to emerge. Sadly, property
condemnations are rarely challenged in any meaningful way. Worse still,
takings for private use are entirely unnecessary to achieve the goals of
redevelopment. The free market has achieved redevelopment for centuries,
and developers and municipalities have several tactics at their disposal
to achieve redevelopment without trampling on the rights of private
property owners. 41. Ensure that municipalities do not use their
condemnation powers for private purposes. 42. Require municipalities to
hold public hearings prior to condemnations.

This article is adapted from a Goldwater Institute study of the same
name. The full study is available at

Above article is quoted from Heritage Foundation, The Insider February

”Evergreen (Today’s Quote)”

“In a constitutional democracy, persons owe loyalty to the constitution
rather than the government. I have long argued that on precisely this
point, American public attitudes are quite different from those of
Europe.” — James Buchanan, Speech at Hillsdale College [February 3,

”’Edited by Richard O. Rowland, president of Grassroot Institute of Hawaii. He can be reached at (808) 487-4959 or by email at:”’ ”’For more information, see its Web site at:”’