In Texas, we pride ourselves on our thriving small businesses that fuel our pro-jobs, pro-business environment. In fact, the 3.1 million small businesses in Texas account for 99% of all businesses and employ nearly half of our state’s workforce. As the world’s 8th largest economy, Texas is competing with the top economies across the globe, which is why it’s critical we eliminate any burdensome regulations that may impede the growth and success of Texas small business enterprises and entrepreneurs that have helped support our global economic dominance.
Recognizing the imperative to maintain our competitive economic edge on the national and global stage, last year Governor Greg Abbott launched the Small Business Freedom Council – which I have been honored to co-chair alongside National Federation for Independent Business (NFIB) Texas State Director Jeff Burdett – to identify ways to cut unnecessary government regulations that impede growth for small businesses and entrepreneurs in Texas. This week, the Freedom Council released a new report outlining key legislative recommendations to enhance Texas’ business environment and protect our small businesses, finding that:
"Despite Texas’ strong business climate, many small businesses face challenges related to regulatory complexity, high tax burdens, compliance costs, workforce shortages, and access to government resources."
The Freedom Council’s report released yesterday puts forth data-driven recommendations based on input from 46 State Agencies and nearly 700 Texas small business owners, offering the Texas Legislature concrete strategies to remove barriers facing small businesses, bolster our state’s economic growth, and uphold Texas’ position as the nation's top hub for entrepreneurship and free enterprise.
First, the Freedom Council made clear that regulatory hurdles cause delays, inconsistent guidelines and redundant requirements that drive up costs for consumers and hinder growth. To address these challenges, the report recommends that Texas standardize licensing and permitting processes across agencies to create a more predictable regulatory environment, reduce excessive wait times, eliminate redundant state and local permitting fees, and reduce unnecessary compliance and reporting burdens.
Additionally, prohibitive tax burdens and excessive fees hinder small business investment and growth, with business personal property tax and franchise tax being major concerns among small business owners. The report recommends providing meaningful relief for business personal property taxpayers, eliminating redundant or unnecessary fees, adjusting the unemployment insurance tax rate, modernizing tax reporting, and increasing the “no tax due” threshold on Franchise Tax. Texas House Speaker Dustin Burrows recently acknowledged this issue in announcing the introduction of Representative Morgan Meyer’s House Bill 9, for which I testified during yesterday’s House Ways and Means Committee hearing:
Hiring challenges have also been an issue for Texas small businesses due to age restrictions, licensing barriers and childcare needs. The report recommends removing certain restrictions for childcare workers, expanding interstate licensing reciprocity, streamlining continuing education requirements, and enhancing childcare availability.
Furthermore, Small businesses struggle to compete for state contracts due to high bonding requirements, complex paperwork and rigid procurement thresholds. The report recommends increasing state procurement spot-purchase limits to reduce excessive paperwork and lowering bonding and insurance requirements to improve small businesses' access to contracting opportunities.
Lastly, excessive in-person interactions and paperwork caused by outdated processes create unnecessary burdens disproportionately felt by small businesses. In the age of AI and technological efficiencies, Texas needs to streamline operations of government services, including by allowing digital submission of required notices, expanding online licensing, and reporting and modernizing the state’s tax filing system.
TAB commends Governor Abbott for his leadership in charting a clear path to strengthen and protect small businesses across Texas. I am honored to work alongside NFIB and so many fantastic small business leaders in Texas to develop thoughtful, strategic recommendations that will strengthen the Texas economy and our climate for entrepreneurs for generations to come.
Tomorrow, I am excited to testify before the newly-formed Texas House Committee on Delivery of Government Efficiency, chaired by Representative Giovanni Capriglione, with NFIB’s Jeff Burdett to lay out the key findings of the Freedom Council’s report and discuss ways to make Texas government work better to support the millions of small businesses that operate in our state.
To read the full report, click here.
- Glenn Hamer, President & CEO, Texas Association of Business
###