Texas Small Businesses Face New Risks From Abbott's Harmful Deregulation Push

Governor Greg Abbott’s proclamation of Small Business Week, set for May 4 to 10, 2025, casts Texas as a haven for entrepreneurs. With 3 million small businesses employing nearly half the state’s workforce, the governor hails their role in driving economic success. Yet, this celebration feels hollow. Abbott’s push for deregulation, touted as a boost for these businesses, endangers the owners and workers who keep Texas thriving. The state’s focus on cutting rules ignores the real needs of its entrepreneurial heart.

Small businesses fuel innovation and sustain communities. Their owners, however, grapple with steep challenges. Over half report that regulatory compliance hampers growth, citing taxes and recordkeeping as major burdens. A North Carolina manufacturer, for example, abandoned an expansion due to prolonged permit delays. These issues demand attention. But Abbott’s answer—a $22.8 million Texas Regulatory Efficiency Office to slash regulations—misreads the problem. It assumes fewer rules guarantee prosperity, overlooking the protections that ensure stability for businesses and their employees.

Robust regulations, when crafted thoughtfully, shield small businesses from exploitation. They prevent predatory lending, maintain fair markets, and foster consumer confidence. Small business owners agree: 68% endorse safeguards against exploitative loans, and 84% support state-level Community Reinvestment Acts to direct capital to underserved communities. These policies strengthen, not stifle, entrepreneurship. Texas’ rush to dismantle oversight, however, threatens to erode these foundations, leaving owners and workers exposed to unchecked risks.

Small business owners confront barriers that deregulation cannot fix. Recent surveys reveal 89% struggle to hire qualified workers, while 53% find loans unaffordable due to soaring interest rates. Access to capital remains elusive, with 80% of those seeking credit last year facing rejection or crippling terms. These challenges halt expansions, stall hiring, and threaten survival. A blanket deregulatory approach sidesteps these realities, offering little relief to owners fighting to stay afloat.

Investments in workforce development offer a smarter solution. States like Washington have expanded nurse apprenticeships, while Maryland funds career training grants to address labor shortages. These programs deliver skilled workers, boosting productivity and wages. Texas, however, leans on summits and online portals—helpful but inadequate. Owners need talent pipelines, not just resource guides. New York’s Employee Training Incentive Program shows how targeted investments yield results. Texas’ reluctance to prioritize training leaves businesses stuck, unable to grow.

Fair regulations also empower entrepreneurs. Limits on credit-card swipe fees, supported by 72% of owners, curb exploitation by financial giants. Protections against predatory lending prevent debt traps that can sink a business. Yet, Abbott’s Texas DOGE, tasked with eliminating “outdated” rules, risks undoing these safeguards. Inspired by the governor’s Small Business Freedom Council, this initiative prioritizes corporate ease over the needs of small business owners and their workers.

Supporters of deregulation claim it frees businesses from bureaucratic burdens. They cite federal data, noting $38 billion in regulatory costs under Trump’s first term versus $492 billion under Obama. But this argument oversimplifies the issue. Small businesses need targeted support, not fewer rules. Compliance costs, estimated at $289 billion annually in 2024, hit small firms hardest, with fixed expenses straining tight budgets. Indiscriminate cuts to regulations deepen these inequities, favoring larger competitors over smaller players.

Past missteps underscore the risks. North Carolina’s $240 million subsidy for Dell collapsed when the plant closed after four years, leaving workers and communities stranded. Broad tax reforms and workforce investments, not one-off deregulatory bets, drive lasting competitiveness. States with low-distortion taxes and strong training programs consistently outperform others on economic indices. Texas’ deregulatory focus, however, obscures structural flaws that undermine small business resilience and worker security.

Employees, especially in small businesses, face heightened risks under deregulation. Weakened labor protections expose workers to wage theft or unsafe conditions. Since the New Deal’s job training initiatives in 1935, investments in fair labor standards have fueled prosperity. States prioritizing these measures see stronger wages and productivity. Texas’ current path, with its emphasis on regulatory rollbacks, jeopardizes these gains, favoring corporate interests over the people who power its economy.

Texas has a chance to redefine Small Business Week as a pledge to meaningful support. Expanded Small Business Administration programs could unlock affordable credit, easing the financial strain on owners. Workforce training, modeled on Virginia’s pathway funds or New York’s incentives, would address the 89% of owners struggling to hire. Regulations that curb predatory lending and promote fair competition would level the playing field. These steps demand commitment, not the dismantling of essential protections.

The stakes could not be higher. Small businesses employ 61.6 million Americans, including nearly half of Texas’ workforce. Their success shapes local economies, from neighborhood shops to innovative startups. Prosperity requires balance—regulations that protect without overwhelming, investments that empower without inefficiency. Texas’ deregulatory agenda risks destabilizing these businesses, prioritizing ideology over practical solutions. Owners and workers deserve policies that reflect their realities, not empty proclamations.

As Texas celebrates its 21st year as the Best State for Business, according to Chief Executive magazine, it must look beyond rankings. True leadership lies in addressing the needs of small business owners who seek stability and opportunity. Deregulation offers a fleeting promise, but robust support—through fair rules and strategic investments—builds lasting prosperity. Texas can set a national example, but only by putting people first.