Monday, December 17, 2012

Remember All Those Small Business Owners That Hate Government and Think They Succeeded All on Their Own?

Many Are Finding Out They Need Government and the Courts

One of the highlights (lowlights?) of the recently complete election campaigns was the issue over whether or not government helped business to succeed, or whether as the Conservatives stated, “I did it all on my own, no government help needed or involved”.  Right

Of course everyone except the most blinded small business owners knew that government plays an important role in make an economy work.  Infrastructure, education, regulation all allow an environment which is necessary for success.  But some business owners are finding out the hard way that when government cuts service because of lack of revenue, they suffer.

One of the ways these companies suffer is that they cannot get dispute resolution.  Resources devoted to the legal system are dropping, and the result is a lack of timely justice.

Real estate developer Darius Ross thought he had an open-and-shut case after he’d paid a plumber in Binghamton, N.Y., $25,000 for what he considered substandard work on an apartment complex. Instead, Ross says, it took 18 months and more than $10,000 in legal fees before a judge denied his request for a trial. “The court was very short-staffed,” says Ross, who believes an appeal would have consumed at least another year. With legal fees mounting and the renovated apartments sitting empty, “We just had to walk away from it.”

So what has happened?  Easy answer, no money for the court system.

New York is one of 42 states that have reduced public funding for courts in the past three years, according to the National Center for State Courts (NCSC). State governments cut fiscal 2012 court budgets by a cumulative $600 million, or 5 percent, and 34 states left judicial vacancies unfilled and furloughed or laid off court workers.

California this year sliced $300 million from its $3.9 billion court budget. The state is planning a 15.2 percent cut for the coming year. South Carolina, which has the fewest judges per citizen of any state and nearly three times as many filings per judge, has slashed its state funding for courts by 40 percent over the past decade. In Alabama, state courts are closed on Fridays to save money, while New York canceled a program to use retired judges to hear cases and reduce a backlog.

In Alabama, state courts are closed on Fridays to save money

And the result, businesses that have money tied up in disputes cannot get it, and the loss of that capital can be significant.

A study conducted by his firm showed that from 2009 through 2013, delays in dispute resolution may cost the U.S. $52.2 billion in lost economic output.

But any proposal to raise state and local revenues to support the court system would be met by conservative opposition, who argue that higher taxes would harm small business.  But of course those are politicians making that erroneous argument, and no one can expect conservative politicians to know anything about real business.  They only think they know anything.

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