Thursday, July 22, 2010

Invest in Idaho

I read with a modicum of humor a recent Op-Ed by Idaho Association of Commerce Industry (IACI). In the piece, they excoriated elected officials like me that have been pushing investments in small businesses. They surmise that by doing so, we are neglecting a significant number of employers that don’t fit the small businesses mold and creating an, “us versus them” dynamic.

Unfortunately, they just don’t get it. By virtue of the fact that IACI has a stage in which to trumpet their cockamamie story, they disprove their own point. Anytime a large employer wants to get something in the Idaho Legislature, they usually do. Not so for their small business counterparts. While large employers have the benefit of IACI and even possibly their own private lobbyists doing their bidding in the Legislature, who does the mom and pop shop have?

To be sure the Chamber does a degree of lobbying (albeit much less than in years past), but it is hamstrung between supporting the needs of its larger clients and those of the small business owner. There is also the National Federation of Independent Business (NFIB), but their lobbyist is only the payroll part-time and really can’t compete against the larger employers multiple full-time lobbyists.

To that end, news reports this week reveal what most of us probably already knew. According to the Gallup Job Creation Index, Idaho is the sixth worst job creator in the country. That doesn’t just happen. It is a concerted effort by those in state government to ignore the sector of our economy that actually creates most of the jobs, small business!

So what can we do? Well, in addition to the traditional mantra of “taxes, taxes, taxes,” I do think that government does have a role to play. The biggest problem most small businesses face when they want to expand is the difficulty of accessing capital. To create more jobs, small businesses must have more capital. No capital, no job creation. It is that simple.

Small Business Administration (SBA) Loans have dropped considerably as of late, which is compounding the problem even further. Last legislative session I proposed an innovative approach to providing more capital small businesses. The legislation, dubbed the Micro Enterprise Development Association (MEDA), would have created a loan fund for credit-worthy small businesses that were finding getting a loan in the credit tight environment impossible. I believe in investing Idaho small businesses.

Unfortunately, the Governor and IACI don’t see it that way. Instead of focusing on investing in Idahoans and Idaho small businesses, IACI and the Governor are more focused upon luring large corporations from out state to Idaho with big tax break. The result is just as Gallup reports it to be, an abysmal record on job creation.

What it all comes down to is a lack of understanding of how jobs are created and total lack of vision. My vision for job creation is to support small business owners. If investing in small businesses is wrong, I don’t want to be right.

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