NJSBDC Network Questions Whether Governor Christie Really Knows About Decision To Eliminate Funding For Statewide Small Business Assistance Program

FOR IMMEDIATE RELEASE
(Free-Press-Release.com) June 3, 2010 -- New Jersey Small Business Development Centers (NJSBDC) network executives, State Director Brenda Hopper and Associate State Director Deborah Smarth, believe that Governor Chris Christie may not know all the facts about the removal of budget language in the proposed FY 2011 state budget relating to matching state dollars for the NJSBDC that would have allowed it to obtain federal funding to support small businesses.

"Since there are so many large issues looming in this budget, it's impossible for the governor to know every single detail relating to budget reductions," said Hopper. "De-funding our program after the governor's Transition Team Subcommittee on Economic Development and Job Growth recommended using the NJSBDC as a vehicle for small business support goes contrary to logic."

In 2008, Governor Jon Corzine's administration proposed eliminating $1 million for the NJSBDC program, but after the filing of budget resolutions to restore the $1 million appropriation by more than 30 state Senators and Assembly Representatives, the final approved budget for FY 2008-2009 restored 50 percent of the NJSBDC's funding.

In January 2009 six months into that fiscal year, the Corzine administration notified NJSBDC executives that they were freezing $250,000 of the $500,000 appropriation for the NJSBDC because of a shortfall in revenues and the state's poor financial condition. Governor Corzine then enacted a final state budget (FY 2009-2010) allocating $250,000 for the NJSBDC to allow small business owners to receive assistance in a weak, recession-bound economy.

"We understand the state's current fiscal situation and the need for hard measures," said Hopper. "The NJSBDC, however, already has taken a 75 percent cut over the last two years. Other state government agency program cuts pale when compared to this staggering reduction."

"If no state funding is provided for the NJSBDC, then New Jersey potentially could lose significant federal support to help its small businesses during this economic downturn and slow recovery," added Smarth. "The federal match requirement for the NJSBDC is not static. It changes when non-federal contributions are reduced or eliminated and when the program's federal funding amount is increased."

Through leveraged federal dollars from the Small Business Administration (SBA), the state's investment, and other non-federal funding including private contributions, the NJSBDC's network of 11-centers across the state last year helped entrepreneurs and small business owners in all 21 counties to restructure and survive, preventing further job losses and in many instances creating new jobs and saving jobs for New Jersey citizens.

In 2009, the NJSBDC helped its small business clients create 1,799 jobs and retain an additional 10,837 jobs. NJSBDC clients also conservatively returned more than $45 million in sales, business, and income and payroll taxes, in addition to the indirect economic impact of their purchase of services and products from other New Jersey companies across the state.

"The NJSBDC pays for itself and returns more than it receives in state and federal investment," said Hopper. "If our comprehensive efforts were not available for those business owners and individuals who came to us in 2009, there would have been even more bankruptcies and layoffs among small businesses and the state would have had more individuals on its unemployment compensation rolls."

The NJSBDC provided the new governor's chief-of-staff and deputy chief-of-staff with the history of the NJSBDC program, its economic impact, and informed them of the federal funding matching requirement in mid-February.

"Unfortunately, despite our program's 31-plus year history of creating and retaining jobs and the economic impact data shared with these new decision makers, and the new governor's solid support for small businesses and entrepreneurs during his campaign, there seems to be a disconnect in eliminating funding for the NJSBDC that will negatively impact the state's small businesses," Smarth said.

"Since the abolishment of the State Commerce Commission two years ago, the NJSBDC's contract has fallen under the jurisdiction of the New Jersey Economic Development Authority (NJEDA)," Smarth commented. "Given the strong economic impact of the NJSBDC, its national affiliation and resources, and its unparalleled infrastructure across New Jersey, we would certainly expect that the new administration would recognize the importance of funding such a comprehensive small business program, especially during this time when new jobs are so sorely needed."

According to the national Association of Small Business Development Centers (ASBDC), the House of Representatives Committee on Small Business supports providing increased federal dollars for the national SBDC program in the amount of $135 million for FY 2011. The President has proposed $113 million.

"Should this recommended federal appropriation be implemented in the final FY 20

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