New report offers policy recommendations to assist “very small businesses”
December 19, 2006 -- Gov. Mitt Romney’s budget cuts are “potentially devastating” to small business lenders and supporters, according to policy recommendations from the Massachusetts Small Business Advisory Council.
The council’s report, filed this week with the Legislature, chastises the governor for his cuts, which, in combination with local and federal funding reductions total a loss of about $3.2 million for at least 11 technical service providers and non-profit community lenders, according to the council’s findings.
“If this infrastructure is allowed to deteriorate,” the report states, “it will take years to rebuild and cost far more dollars to replace than to fund on an ongoing basis.”
The report, an annual assessment, includes recommendations intended to ensure the success and growth of “very small businesses” with 20 employees or fewer. The report says there are 180,000 companies, comprising 87 percent of all Bay State companies, in this category. The companies account for 715,000 jobs, but the report suggests that small companies could be doing much better.
The 14-member council is made up of local and federal public officials, local business owners, entrepreneurs, finance experts, and representatives from the U.S. Small Business Administration, MassDevelopment, the Community Development Finance Corporation, Pioneer Institute; and the Enterprise Center at Salem State College.
Russell Smith, chairman of the council’s policy committee and executive director of the Lowell Small Business Assistance Center, told the News Service that one major function of the report was to identify “any geographical holes where there were a dearth of services” for small businesses. “And there are some holes,” he said.
The council, which was established under the 2003 economic stimulus law, also criticizes the process for obtaining licenses and permits for businesses, calling it “fragmented and in some cases illogical.” The report, the council’s second annual, asks that the state continue to fund the “construction, maintenance and marketing” of the licensing system. A similar recommendation was included in last year’s report as well.
The recommendation that could be acted upon soonest calls for a round of grants for very small businesses as early as January 2007. The money would come from a $2 million program signed into law by the governor last year, which issued its first grants in November. The report states that the money left over from that first round of grants would help fund another and that the program should be extended beyond June 30, 2007, when its funding is expected to dry up.
Another recommendation calls for the establishment of a Professional Assistance Program to undo the “significant hindrance to business stability and growth” caused by a lack of access to professional services that consult with and advise very small businesses. This lack of access was “further complicated for linguistic minorities,” the report indicates.
Other recommendations include the reauthorization of the council itself. The council was not provided any funding to do research by the Legislature and members volunteered their time. Smith, the council chair, said the body would continue to meet without explicit recognition because members are “very committed to the economic sector”
Each member interviewed focus groups of small business owners in different regions throughout the state and reported findings at the council’s monthly meetings. The council also compiled the first-ever inventory of technical service providers for small businesses to identify available help. Smith said he and the council members would lobby legislators to accept the recommendations early next session.
“We hope to do a legislative briefing in the new year,” he said, adding that the council will meet tomorrow to hammer out a potential date.
Council member Georgianna Parkin, state director of the Massachusetts Small Business Development Center, said the group’s findings were “not an indictment” of the governor or Legislature’s policies and were simply one take on an important Massachusetts issue.
“This certainly isn’t the bible,” she said. “It’s one viewpoint for someone to look at.”
The governor’s office did not respond to requests for comment.
Parkin said that in her discussions with groups in central Massachusetts, small business owners were almost uniformly concerned with “costs of regulatory burdens and compliance, insurance costs and access to capital.”
She added that the report had been passed along to the Patrick-Murray transition team to help them form policy as Gov.-elect Deval Patrick readies for inauguration day. Patrick has said as recently as today that he is studying the governor’s 9C cuts to see if any should be rescinded when he takes office.
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