Lake County News Sun - "Middle-market' Businesses Hope Schneider Caucus will Help

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By Steve Sadln

A bipartisan caucus is giving hope to the heads of medium-sized companies dealing with a web of government regulations -- like Horizon Pharma CEO Tim Walbert.

Walbert says he is optimistic about the Middle Market Growth Caucus, launched May 29 by U.S. Rep. Brad Schneider, D-10th, of Deerfield, and three other members of the House of Representatives.

"Any time you see members of Congress doing something that is not a partisan act it is going to help," said Walbert, who is also the chairman and president of the Deerfield-based company. "That may dwindle as it gets into the system, but this is a start."

The caucus, which held its first meeting in Washington on May 29, already has 11 members, including six Democrats and five Republicans from eight different states, according to information provided by Schneider's office. Schneider thinks the makeup may help soothe Walbert's gridlock fears.

"Working together toward common goals is always more effective than working against each other," Schneider said. "The bipartisan members of our caucus bring a variety of perspectives, but we are all committed to helping middle-market businesses grow."

The idea for the caucus came when Schneider was talking to members of the Association for Corporate Growth (ACG) this March at Lambert Technologies in Gurnee. Some members hinted that companies too large to be considered small businesses and not big enough to afford a network of lobbyists needed a voice in Washington.

"It sounded like a good idea and I said I would like to be part of it," said Schneider, who took the idea to U.S. Rep. Tom Rice, a Republican from South Carolina.

"And he liked it," Schneider continued. "We see it not as a Republican or Democratic issue but about creating the jobs we need."

Schneider and Rice got together with U.S. Reps. Steve Stivers, R-Ohio, and Jared Polis, D-Colo., and started organizing. They held a reception May 29 to launch the effort and seven more members joined.

Middle-market companies are defined as those with annual sales between $10 million and $1 billion, according to Schneider. In the 10th Congressional District alone, there are 222 such businesses employing 121,051 people; they represent an annual revenue of $15 billion, according to information provided by Schneider's office.

One of those companies is North Chicago-based candy maker Jelly Belly.

"We seem to have an anti-business administration in place and this might be an effort that will help," said Vice Chairman Bill Kelley. "We're a small company. One of the things that would help is [revising] our tax code. The tax code is a mess."

Jelly Belly is a privately held business that Kelley characterizes as "being in the lower quarter" of the middle market. Schneider recognizes that companies like Jelly Belly are often affected by individual as well as corporate income tax code.

"Many are pass-through entities, S-corps or LLC's," Schneider said referring to companies whose profits flow directly to ownership and are taxed as personal income. "This is an issue we need to address for the middle market."

As a developer of arthritis, pain and inflammatory medicines, Horizon Pharma has a different set of issues. Its stock went public three years ago, and the company has experienced tenfold sales growth since 2012. It has to deal with regulations imposed by both the Securities and Exchange Commission (SEC) and the Food and Drug Administration (FDA).

"Access to capital is a key focus for us," Walbert said. He credits easing of SEC restrictions with making it simpler for the company to go public in 2011. "We are held to the same standards with the SEC as any other company. We need to have our voice heard."

Another middle market company, Northbrook's Panek Precision, a family owned manufacturer of automotive parts, finds itself squeezed between multinational suppliers and customers, according to Vice President Brian Panek. He is the third generation of his family to work there, and said he is glad to have a bigger voice in Washington.

"We welcome it," Panek said. "We need to be heard in government; this could very well address that."

He said he, too, wants to see changes in the tax code to help Panek compete with larger enterprises, and believes training is one area where the government could help.

"When we hire someone they need to be trained and ready to work," Panek said. "Otherwise someone else has to stop what they're doing and train him."

He said his company cannot afford to hold training classes for new employees as Fortune 500 businesses do.

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