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Bailouts. Rescues. Loan guarantees. We've heard a lot lately about the need to "save" the large banks and automakers from economic disaster, but here in Kentucky, we've heard next to nothing about helping the state's top employer - small business.
Time and again, small business, the nation's largest employer, has led America out of economic problems. It provides most of the nation's net new jobs. Unlike some big corporations, which are closing stores and slashing jobs to satisfy Wall Street, small businesses are worried about what's happening on Main Street.
But small business owners are routinely ignored by government and the media.
The truth is that small business is the cornerstone of Kentucky's economy. Small businesses account for 97 percent of the commonwealth's employers and produced 60 percent of its net new jobs from 2004 to 2005, according to figures just released by the U.S. Small Business Administration. Small business employs half of the state's private workforce.
Small business owners don't have corporate jets, luxury retreats for their executives, golden parachutes or stock options. They don't have teams of lawyers and accountants combing for every opportunity to maximize paper profits at the expense of their employees and communities. They don't go before Congress and plead for cash they haven't earned.
But small business owners invest in their communities. Small business owners work for a living. They do the books, but they also sweep up and empty the trash. They're struggling with everything from unpredictable fuel costs to finding - and keeping - affordable health insurance. Small business owners take pride in the work they do and in treating their employees fairly.
During the 2008 session of the Kentucky General Assembly, lawmakers proposed a bill to create a $5 million pool of economic development tax credits reserved strictly for small business expansion. To qualify, small employers would have had to make a capital investment and add one new position.
Forty of the 100 lawmakers in the House of Representatives co-sponsored the bill, but we were told the bill would not be allowed a hearing because there was no money available.
Shortly after the session ended, however, state government found $40 million for a plant to build electric cars.
As state director of the National Federation of Independent Business, the state's leading small business association, I believe that we would be better off if the General Assembly invested in small businesses, rather than trying to land big manufacturing plants.
After all, Kentucky's small businesses generally aren't threatening to move to Alabama or Mississippi. They're looking to expand and create jobs right here in the bluegrass state. When a Kentucky small business creates a job, that job is going to stay in Kentucky.
Given the challenges our economy faces, we can't afford to keep ignoring small businesses. I urge everyone to call on their legislators to support House Bill 26, sponsored by Rep. Tanya Pullin of South Shore and Rep. Scott Brinkman of Louisville. This bipartisan bill would create a pool of economic development tax credits for Kentucky's small businesses. The bill not only deserves a hearing but deserves to become a part of Kentucky's economic development tool kit.
Kentucky's largest employer is worth the investment.
- Tom Underwood is state director of the National Federation of Independent Business, the commonwealth's leading small business association.