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NJSBDC Network Questions Whether Gov. Christie Knows About Decision To Eliminate Funding
Defunding will result in loss of federal dollars totaling $980,000 plus to assist New Jersey's 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,"
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,"
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,"
"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 2011 federal budget, New Jersey stands to receive an additional estimated $984,385," Hopper stated. "But, even if the state's final budget puts back $250,000 for the NJSBDC program, the same level as last year, the NJSBDC would only be able to keep $250,000 of the additional federal funds and would have to remit $734,385 to the SBA to reallocate to other states' SBDC networks."
"Federal funding for the NJSBDC must be matched dollar for dollar," Smarth said. "I doubt that Governor Christie would want to send federal dollars to which the NJSBDC is entitled to other neighboring states' SBDCs during this weak economy and slow economic recovery. In his budget address, the governor indicated how New Jersey ranks last in receiving back federal dollars we send to Washington DC. And he knows New Jersey has a poor record in business friendliness."
The FY 2011 state Budget in Brief posted on the New Jersey Treasury Department's website did not list the NJSBDC under the summary of increases and decreases. "The NJEDA's CEO notified us by phone prior to the governor's address," Hopper said. "We did not appear on the list, so we were totally off the radar screen publicly. Yet, under this proposed state budget, we would lose 100 percent of our state funding."
"The national SBDC program has the support of the New Jersey Congressional Delegation since this program has received increases over the past two fiscal federal budgets," noted Smarth. "Our congressional delegation understands that an increase in federal funding brings back more federal funds to leverage with state and other non-federal funding sources for the state's small business owners. We are counting on them once again to step up to the plate to ensure that the governor understands without a doubt the levity of the problem."
About the NJSBDC
The New Jersey Small Business Development Centers (NJSBDC) network, comprised of 11 centers across the state, is the premier provider of comprehensive services and programs for small business in New Jersey for 31 years. The network assists businesses to expand their operations, manage their growth and start new ventures. NJSBDC, a non-profit entity, is an accredited member of the national Association of Small Business Development Centers (ASBDC). The program's private sector experts provide guidance with business plans, marketing strategies, accounting, financial analysis, capital financing, technology commercialization, procurement, e- business and international trade.
The network leverages funding from the Small Business Administration (SBA), New Jersey State Government, and the higher educational institutions that host the 11 centers as well as other private and public funding sources. Visit www.njsbdc.com.