The Microenterprise Petition for Dutchess County

The Microenterprise Loan Fund Petition for Dutchess County

The Empire State Development Corporations Annual Report to the Legislature six years ago on state-funded microenterprise development programs proved that they are quite effective in creating jobs:

Fact: State funded programs like the Entrepreneurial Assistance Program (EAP) conservatively generate $2 in tax revenue for every state dollar invested in the program.

Fact: The EAP program costs the state only $1,585 per job created-- compared to the Jobs Now Program which averages $10,000 per job and the Job Development Authority that averages $35,000 per job.

The City of Poughkeepsie has a microenterprise loan program-- there should be such a program for the entire county.

That's not all-- for every dollar of state money, Community Development Financial Institutions (CFDI's) can leverage up to $24 in federal and private sector funds that are then relent into the communities they serve. In one year alone, CDFI's recently had more than $1 billion in financing outstanding, which supports small and micro business development, child care facilities, affordable home ownership, personal loans and financial services-- according to Cathie Mahon, NYS CDFI Coalition Coordinator.

We should make sure that Dutchess County's and New York State's microenterprise programs are fully funded-- the same for Community Development Financial Institutions.

And if the state isn't willing to step up to the plate to make sure Dutchess County residents truly have access to microenterprise loans and Community Development Financial Institutions, our County Legislature should make sure of this.

For much more on both of these issues, see MicroBizNY.org

Dutchess County Legislature: [email protected]; 486-2100

Governor/New York State Legislature: (877) 255-9417

Joel Tyner
Dutchess County Legislator
324 Browns Pond Road
Staatsburg, NY 12580
[email protected]
(845) 876-2488

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From MicroBizNY.org...

MicroBizNY is New York State's Microenterprise Association. We are a newly formed association of organizations that provide training, technical assistance and lending to entrepreneurs either seeking to start or currently operating a microenterprise (a business with five or fewer employees).

According to the U.S. Census Microenterprises account for fully 88\% of all businesses in NYS and employ approximately 20\% of the state's workforce. Sole proprietorships (a business without employees) account for 72\% of all businesses in NYS and have had an average annual growth rate of 3.36\% between 1997 and 2003 (equates to an average of 45,000 new businesses per year). There are currently 1.6 million microenterprises operating in New York generating approximately $58 billion in revenues annually. Microenterprise development should be viewed as an economic development priority not an afterthought. The emphasis of New York's economic development policy is on attracting and retaining large businesses while small business development gets only a fraction of the resources. Empire State Development Corporations Annual Report to the Legislature (2000) on the state funded microenterprise development program suggested the following:

* State funded programs conservatively generate $2 in tax revenue for every state dollar invested in the program;

* Program costs the state only $1,585 per job created (Compared to the Jobs Now Program which averages $10,000 per job and the Job Development Authority that averages $35,000 per job);

* Programs should be expanded to areas of the state that currently lack coverage and grants to these training organizations should increase to maximize federal matching dollars.

MicroBizNY recommends that the Entrepreneurial Assistance Program (EAP) be funded at at least $4 million annually. [The Governor's Executive Budget Proposal eliminated funding for this program ($1.3 million in SFY 04-05); it has been jeopardized too often annually.] Additional funds would allow for the creation of new centers to meet the growing demand for these services. Each EAP Center should receive a minimum allocation of $100,000 to operate the program. EAP Centers are accumulating waiting lists for their services and now is the time to increase funding for this program and to expand it to others areas of the state not currently served by the existing centers.

MicroBizNY and the New York CDFI Coalition continue to seek the creation of an independent New York State CDFI Fund to make investments in CDFIs for a broader range of financing and financial services purposes. We urge the Legislature to support a $4 million appropriation and an expansion of eligible financing activities. We further believe that the fund should be increased to allow for larger grant amounts (going from the current maximum of $50,000 to $100,000) that would help leverage additional federal capital and increase the return on the application process).

MicroBizNY would urge County Governments to include provisions for microenterprise development in their county bi-ennial employment plans. We believe that all counties (under the proposed FFFS Block Grant) should include financial support for microenteprise development as the federal government has deemed it an eligible use of TANF Funds. National research indicates that low-income people can and do open and operate successful small business ventures and approximately half of the clients served by EAP would be eligible to receive services under the TANF eligibility guidelines. These funds could also be used to develop child-care businesses that would help meet both the need for affordable child-care in our state and provide low-income women the opportunity to develop profitable businesses.

MicroBizNY recommends that the state implement a program to enhance the performance of small business and microenterprise development programs. A coordinated program of capacity-building, technical assistance and performance evaluation for microenterprise/small business development organizations offers the potential to enhance the impact of microenterprise development services across New York State. Microenterprise programs benefit NYS through new business creation, business expansion and job creation. Capacity-building and technical assistance will guarantee performance and the achievement of these objectives. This is an important time to invest in quality microbusiness development services, to strengthen existing service providers, and to maximize the return of NY's investment in entrepreneurial training and technical assistance services throughout the state...

New York State has a larger percentage of its workforce employed by microenterprises than the national average. Nationally, according to the Association for Enterprise Opportunity (AEO), microenterprise employment represents 16.4 percent of all private employment in the United States, with a total of over 20 million microenterprises in the country. "We now have solid data to show the economic impact microenterprise has on our state's economy," stated Ron Deutsch, Executive Director of SENSES. "New York has 1.5 million microenterprises which employ almost 19 percent of the states entire workforce, this is undeniable proof that very small businesses do make a very big difference. While state policy tends to focus on attracting large businesses, we must remind the Governor and the President that microbusinesses are the heart and soul of the state's economy. The Governor does not have to look any farther than his own backyard to see the real impact microenterprises have on the state's economy. Putnam County has the highest percentage of the county workforce (over 37\%) employed by microenterprises (businesses with five or fewer employees)."

Microenterprise development networks like the state funded EAP and the Business Outreach Center (BOC) Network are developing new businesses and spurring economic activity every day. "Microenterprise is a cost effective way to create jobs and generate much needed revenue," stated Linda Benedict of the ACCORD Corp. Ms. Benedict also stated that she thought the words of one of her programs graduates, Jill, best expressed the value of EAP: "EAP gave me focus, taught me how to write a business plan, and will help me when I hire someone to work for me. I really like the idea that I am not out here alone but will receive 5 years of program follow-up. Allegany County needs more employment opportunities and EAP makes that happen."

MicroBizNY steering committee member Nancy Carin, Executive Director of the BOC Network also called upon the state legislature to support mechanisms to enhance the capacity of state funded programs. "A program dedicated to sharing best practices for microenterprise service providers will help enhance the array of vital microenterprise services throughout the state -- services that will fuel the job creation engine of the future -- our new and growing microbusinesses.

MicroBizNY also joined with the New York State CDFI Coalition to support increased funding for Community Development Financial Institutions in New York State. Cathie Mahon, NYS CDFI Coalition Coordinator stated that, "For every dollar of state money, CDFI's can leverage up to $24 in federal and private sector funds that are then relent into the communities they serve. In one year alone, CDFI's had more than $1 billion in financing outstanding, which supports small and micro business development, child care facilities, affordable home ownership, personal loans and financial services.

MicroBizNY and its supporters suggest that by generating new economic activity, microenterprise also increases public tax revenues and private incomes, thereby reducing dependence on public assistance, which in turn helps to shrink public budgets. These significant social and economic benefits far outweigh the cost of public and private investment in microenterprise development.