Banking On Safety In Numbers
Pennsylvania State Rep. Eric Nelson (R-57), his wife Susan, and their six kids often trade a brief but insightful mantra with each other: “You be you.”
This ode to authenticity has served them well.
He repeats that truism when asked if he would recommend that his pre-teen and teenage kids follow in his footsteps and complete his professional trifecta: military service, small business ownership, and politics.
He has done well letting his fellow Pennsylvanians see the “full Nelson.”
In less than three years in office, he has carved out an enviable reputation in the General Assembly as an ardent defender of small business and a loyal friend to community bankers.
Nelson’s dream-candidate resume’ has nine years of service in the U.S. Marines, working in infantry demolitions, main battle tanks and the military police, including a 1 year re-enlistment following the terrorist attacks on 9-11; running a host of small businesses, including safety consulting companies and a Bruster’s ice cream franchise; and teaching safety science at the Indiana University of Pennsylvania (IUP), where he is also pursuing his doctorate in communications and instructional technology. Those qualifications, coupled with his winning personality, all-American good looks, and never-say-die work ethic, made him a slam dunk to win a special election for the 57th House district by a landslide after predecessor Tim Krieger ascended to the post of Westmoreland County judge in 2016.
A conservative independent-turned-Republican from the Greensburg area, in southwestern Pennsylvania, Nelson is making a mark on Pennsylvania’s business and political climate.
His pro-business agenda stems from another truth he often shares with his family: “You are not allowed to complain about anything you’re not willing to change.” When he witnessed how steep taxes and byzantine regulations were crippling progress across virtually every sector, he decided, “It was my turn to enter the ring and carry the torch.”
He entered a crowded special election race and won handily.
Pro-life, pro-Second Amendment, pro-taxpayer, and pro-business, his choices were also driven by his front-row seat to the impact of “swelling government” and increased regulations and taxation. Pennsylvanians are fortunate to have him serving on the Aging and Older Adult Services Committee, along with the Consumer Affairs, Human Services, and Labor and Industry committees.
His business, educational and military experience has colored and informed his agenda in the state House. As a Marine, he was blessed to see how other countries compare to ours, following eye-opening deployments in Albania, Estonia, Japan, Spain and Thailand. Albanians are just now in the infancy of a capitalistic society and are finding many, albeit simplistic, ways to make money–like charging a dime to tell people how much they weigh, he recalled.
“We don’t appreciate the blessings and opportunities that we have to change a person’s pathway,” he said. Moreover, he believes, “The voice of the small business owner and parents gets lost in the political shuffle.”
Nelson is a corporate safety expert willing to take calculated risks. Early in his career, he worked as a safety engineer for General Dynamics in Scranton and was transferred for a time to Tallahassee, Florida. He was a “young, hard charger,” he said, and was offered an additional promotion and transfer, but he missed the “four seasons, hills and grass” of Pennsylvania.
He decided to return home to Pennsylvania, where he had graduated from Hempfield High School and IUP, to raise a family. He started his business with a cardboard table for a desk and a folding chair. His growing family now resides on a 70-acre farm, and his kids are ages 18, 16, 15, 13, 11 and 9.
In the early 1990s, he formed E&SS, Ergonomic and Safety Services. His business goals soon conflicted with family goals, such as coaching his kids at T-ball games and pee-wee football.
By 2007, his company had reached over 50 employees and $3 million in sales, when he decided to sell.
With E&SS, he worked with very small businesses who could not afford their own in-house safety professional. He saw a preventable fatality due to a lack of a safety officer in a trucking company and was deeply affected. Thanks to community banks, he secured a loan to start his business. As he grew, additional loans and lines of credit followed, as he acquired a large fleet of vehicles, hired workers, and more.
His business used Quickbooks, and when taxes were paid, the software would ding. That dinging became a clarion call for change for him.
After working for General Dynamics for a time, he joined the Marines after Hussein invaded Kuwait.
He later partnered to start Steel City Safety while he taught at IUP. He, his wife, and parents also opened a Bruster’s Ice Cream store, which operated for more than 15 years, and taught his kids the value of money and hard work. Again, community banks were there to give him a loan and the support system he needed.
“It is the community bank who can look somebody in the eye and say ‘We believe in you and we are going to invest in you.’”
The most recent business he has helped to launch is an iOS company, Blue Otter, an asset tracking company that helps expansive companies monitor where their equipment is, in facilities that may span many acres.
His business savvy has helped him immensely in the gilded gold and marble halls of the Capital. He has seen the government function more as an adversary than an ally. He expresses amazement that small businesses are not more frustrated with the lack of a friendly business environment.
Nelson is keenly aware that small businesses provide 65 percent of the jobs in PA. Fueling businesses and removing obstacles to growth fuels the economy and brings coveted jobs.
Small Business Tax Package
That realization drove his sponsorship of House Bill 333, part of a three-bill Small Business Tax Fairness package, introduced with fellow conservatives, Rep. Seth Grove and Steve Bloom. A companion package was offered in the Senate by Sen. Mike Folmer, John Eichelberger and Scott Hutchinson. House Bill 333, now reported out of Finance and then re-committed to House Appropriations, amends the Tax Reform Code to permit an expense deduction for the cost of certain business property.
It is endorsed by the National Federation of Independent Business, the Pennsylvania Chamber, the Builders Association, the Pennsylvania Manufacturers Association and the Pennsylvania Farm Bureau.
Specifically, it allows Pennsylvania businesses to take the full deduction permitted by Section 179 of the Internal Revenue Code of 1986.
Section 179 allows businesses to deduct the full purchase price of qualifying equipment purchased during the tax year, up to $500,000. The deduction is phased out if the total amount of equipment purchased exceeds $2 million.
The bill seeks to correct a glaring inequity in Pennsylvania law.
In the Commonwealth, small business pass-throughs, like his companies, are allowed to deduct $25,000, while C-Corps are allowed to deduct $500,000. Pennsylvania is the only state in the U.S. that treats small businesses differently than large, Nelson said, all in the name of revenue generation.
“It’s completely unacceptable,” he said.
Nelson estimates that the bill may amount to $16 million in lost revenue for the state, but he notes that the fiscal note needs to be revised to reflect recent federal tax law changes.
Federal changes will raise the deductions from $500,000 to $1 million, but it will still remain $25,000 for small businesses in Pennsylvania.
The fiscal note also fails to account for the growth it will generate.
“It is not a revenue-neutral bill. It is a positive-growth bill,” he underscored. Nelson sees the larger issues at stake. “Let’s let businesses invest in themselves,” he urged. “When they buy a truck, they buy local; when they need drivers, they hire local.”
Buying a $250,000 concrete truck, for example, a business owner can still only deduct $25,000 depreciation and must pay taxes on the difference.
Other bills in the package, House Bills 331 and 332, deal with like-kind exchanges and net operating loss carry-forwards.
The package addresses what he calls “a bipartisan spending addiction.”
“Our budget software is reactive,” he noted. “It’s part of the disconnect between small business and government,” he said. It uses no dynamic modeling and is all based on taxes generated to the state.
“Growth doesn’t factor into the thought process,” he said.
“If Pennsylvania does nothing (on HB 333), we remain as an ostrich.” Other states will be writing off more in equipment costs, and PA business owners will be writing off only $25,000.
Because so many legislators are attorneys or long-time government employees, he fears many do not understand business fully, leading to a “climate of stagnation.”
He sees Rep. Frank Ryan’s bill, House Bill 2017, as one of the most urgent items on the to-do list for the spring, to fix the bonus depreciation issue. He is a cosponsor of that bill, which was passed by a vote of 183 to 4 on March 14, 2018 and is now in the Senate Finance Committee.
“It’s difficult for government to embrace abundance. We don’t have an abundance mindset.”
But his freshman status has been eye-opening. He is refreshingly surprised to see that most legislators “are good people, and they want to do good, on both sides of the aisle.”
He is also shocked by the amount of money misspent on welfare.
Welfare money is being given to dead people, people who live out of state and people who are working.
“They are stealing from the people who need it.”
That outrage over inequity spills into the business sector.
He wants small businesses to level the playing field. Farmers, manufacturers, construction companies, machinists, bankers–his call to action is to have businesses call and meet with legislators and say, “We’re tired of being treated unfairly.”
Most are just working so hard, they don’t have the time to lobby their legislators. “They don’t realize they are being dealt a short straw. I thought that was the only straw,” he said.
“We are in a period of growth now. We have the opportunity to have excess revenue, so it’s an excellent time to level the playing field. Growth begets growth,” he said.
He wants businesses to take 30 minutes a month to talk to legislators and build a relationship via face-to-face meetings that transcend sponsorships.
He encourages everyone to “Respect others and work your hardest,” to succeed.
“It may be a rocky path, but the view is always better from the top.”
Every year, on his birthday and his kids’ birthdays, his family members ask themselves, “Did you live or did you just exist?” Growth must be part of their life’s equation.
He urges community bankers to ask themselves the same question. In so doing, they can share their knowledge and their stories, and propel growth that transcends mere existence.
This safety engineer knows that you can never take the leaps he has without community banks assessing risk, financing his dreams, and embracing the abundance that is there for the taking by those who work hard, dream big and “be you.”