Remember the old saying designed to help you remember how to spell “assume?” To assume makes an ass out of you and me.It is evident from our debate on Saturday that both King and Kelly Sloan made a lot of assumptions about how government programs might help to create jobs. During the “have-at-‘em” section of the debate, King asked me if government owning Fox News would mean that we would no longer get “fair and balanced” reporting from Fox. Since we don’t get “fair and balanced” reporting from an entertainment cable network that gives $1,000,000 to the Republican Governor’s Association to defeat Democrats, that was where I directed my answer. By the way Fox is owned by an Australian and a Saudi Prince—could that be WHY we don’t get “fair and balanced” reporting from them?But I could have taken a higher road. King and Sloan ASSUME that any jobs creation program has to come from higher taxes. My experience, and the model I’ve been thinking about for Colorado, is New Markets Tax Credits (NMTC.) Here’s how NMTC works:· A company with income they would like to shelter from taxes makes a seven-year investment in a Certified Development Entity (CDE). In return, they get a 39% tax credit over the seven years of their investment.· The CDE is limited in what they can do with this investment. Two eligible uses are making loans to small businesses at below market terms and making venture capital investments in small businesses.· The business receiving these loans or venture capital investments are required to create a certain number of jobs for each $X received. (The federal standard for $X is $50,000.)So, a profitable company pays LESS in taxes, and a small company gets money to expand IF they create a job—and the employee now pays income taxes, mitigating the loss in revenue to the governmental entity. It is taking private dollars into the public arena. Funds from the profitable business are paying for the expansion of the small, local business.Like I said, King doesn’t know the first thing about how business works.Homework:Oklahoma Uses NMTCOfficial Website for NMTCMy Experience With NMTCFox News Argued in Court That It Can Legally Lie
I was very saddened to learn of the passing of Wilma Mankiller, former Chairman of the Cherokee Nation. Although I did not personally know Ms Mankiller, I was very aware of her work. She was a role model for many young Native American Women because of the work she did after founding WEWIN. She also founded a not-for-profit dedicated to the progress of Native communities, which is taking donations in her name.The Cherokee Nation was one of the first tribes to form a Community Development Financial Institution (CDFI.) I was privileged to do some consulting work, showing them how to use New Markets Tax Credits (NMTC.) They went on to receive a $60,000,000 NMTC allocation to develop projects to benefit the Cherokee Nation.Another Native leader that has been leading the way in improving economic conditions for Native Americans is Elouise Cobell, of the Blackfeet Nation. She led the way for tribes to sue the federal government for ignoring their fiscal responsibilities regarding individual Indian Trust Accounts. It appears that the government is very close to reaching a settlement in that case.I first met Elouise when I traveled to Browning, MT to provide training on establishing a CDFI for Native artisans on the Blackfeet Reservation. At that time she was Secretary of the Board of a bank in Browning. Elouise leveraged that experience into creating the Native American National Bank, headquartered in Denver, which is now a CDFI.On another note, a little birdie told me that the Incubator Center has applied for certification as a CDFI. Good things may be coming your way, Mesa County!Homework:Rapid City Journalhttp://www.indiancountrytoday.com/home/content/90011057.htmlhttp://www.wewin04.org/Cherokee Nation Businesses.comCDGI fund awardeeshttp://www.google.com/hostednews/ap/article/ALeqM5gnXHnIwaejo2RTMaMLmw0MY1tL2QD9EP8V1G0http://www.cdfifund.gov/speeches/Gambrell-2008-06-NationalBankersAssociation.asp
The February 10th and 11th edition of the Grand Junction Free Press published an editorial by Kelly Sloan titled, “Democrats’ plan will not create jobs.” Mr. Sloan should do some homework before he trots out the same old talking points that have been used to promote boom and bust cycles for at least the past 30 years in Happy Valley.There is a way for government support to help create jobs. First let’s look at some facts:· The majority of new jobs in the nation are created by small businesses, not large oil and gas companies.· Commercial banks (and yes, Norm Franke, I do know the difference between investment banks and commercial banks) are predisposed toward lending to large and mid-market companies, not the small businesses and entrepreneurs that are our neighbors. Why? Start-up companies and small businesses have a high rate of failure. So, even though they are creating the jobs we need, they have trouble finding financing. · One government program that helps existing small businesses get financing to buy equipment and/or expand into new office space is the Small Business Administration (SBA), a federal government program that guarantees loans made by commercial banks to small businesses that carry more perceived risk than the commercial bank is willing to take without some form of credit enhancement. Start-ups generally need not apply, because the banks require at least three-years of profitability, or positive financial trends.· Another government program that supports small business and housing programs that carry slightly more risk than SBA guaranteed loans is the CDFI fund (Certified Development Financial Institution) in the Treasury Department. The CDFI fund also manages New Markets Tax Credits (NMTC), a program about which I happen to be a nationally recognized expert. NMTC’s give tax credits to Certified Development Entities (CDEs) who then sell the tax credits to businesses who want to shelter income from the IRS (oil and gas companies?)CDEs use the money they get from selling NMTCs to finance small businesses and entrepreneurs, who create jobs, but otherwise could not find financing.Currently there are no Certified Development Entities (CDEs) in western Colorado. Without a local CDE, local small businesses and entrepreneurs are being shut out of the programs that are designed to help them. There are two organizations that are eligible to become CDEs in House District 54: the Incubator Center and the Revolving Loan Fund REGION 10. There is a state chartered entity that is a CDE, the Colorado Housing and Finance Authority (CHFA.) There is a SBA lender working state wide that has access to NMTC for Colorado: Colorado Lending Source.Now, do some homework. These programs would all bring your federal tax dollars home to help your neighbors expand or create small businesses, resulting in sustainable jobs for other neighbors. Neighbors helping neighbors: It is the Western way of life.Homework:http://www.federalreserve.gov/boarddocs/snloansurvey/201002/ ß Federal Reserve Bank survey of bank lenders.http://www.cdfifund.gov/news_events/CDFI-2010-06-Presidents-2011-Budget-Requests-250Million.aspß Obama’s budget includes $250 million for CDFIs.http://www.cdfifund.gov/news_events/CDFI-2010-08-Statements-CDFIFund-Director-Gambrell-and-AdvisoryBoard-Chair-Bynum.aspß CDFI announcement of TARP funds availability to fund small businesses.http://www.cdfifund.gov/docs/2010/cdfi/Obama-Administration-Announces-Enhancements-Tarp-Initiative-for-Community-Dev-Fin-Inst.pdf ß CDFI eligibility and program requirements.http://www.colorado.gov/cs/Satellite?blobcol=urldata&blobheader=application%2Fpdf&blobkey=id&blobtable=MungoBlobs&blobwhere=1251604645421&ssbinary=trueß Overview of Colorado’s budget woeshttp://www.chfainfo.com/news/Update%20on%20CHFA%20and%20Market.icm ß CHFA accesses housing funds.http://www.rwbpress.com/2010/02/15/sba-loans%E2%80%94are-small-business-loans-the-key-to-reversing-unemployment-creating-jobs/ß article about how Small Business Administration loans help businesses create jobs.http://www.coloradolendingsource.org/ß SBA lender using NMTC to fund small business loans.http://www.cdfifund.gov/what_we_do/programs_id.asp?programID=5ß All about NMTC.
Last night our local news reported that the Grand Junction job market is on someone’s list of top cities for jobs. http://www.nbc11news.com/home/headlines/82208932.htmlBut it isn’t because jobs are good here; it is because jobs are scarce and getting more scarce. “Career Builder sites a 5.2 percent drop in jobs from July to October of last year as the reason for our area to be included.”The story went on to describe a local resource fair designed to help people tap into local resources until the jobs market improves, but it wasn’t a jobs fair because there are no jobs. Since I haven’t been looking for a job, I hadn’t been looking at the want ads section of the newspaper. However, I recently took my mother in for her annual mammogram (She’s an 80 year old breast cancer survivor.) While waiting for her in the doctor’s office, I did take a peek at a local paper, and almost fell out of my chair when I saw less than a quarter-page of ads. I can remember when there were pages and pages.Recently Governor Ritter sent out a press release about a credit reserve program that was being used to create jobs state-wide. It spoke of businesses that had been financed, some of which were in District 54. The credit reserve was created with Senate Bill 09-067. What a credit reserve is and how it works is a bit complicated for a blog, but this is exactly the kind of program that our legislators should be supporting in Denver. It is the kind of program that my former employer used to help create over 40,000 jobs nation-wide. There is another federal program that Colorado should be tapping into: New Markets Tax Credits (NMTC). The same organization that is utilizing the credit reserves authorized in the Senate Bill (CHFA) has previously received NMTC allocations, which are designed to drive private investment into areas like House District 54, where jobs are scarce.
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