Name: JLARC faults financing authority critical to Northam small business COVID-19 grant program
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JLARC faults financing authority critical to Northam small business COVID-19 grant program

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Please subscribe to keep reading. You can cancel at any time.Loading&amp;hellp;{{title}}{{description}}{{banner}}(renews at {{format_dollars}}{{start_price}}{{format_cents}}/month + tax){{tagline}}{{special_title}}{{html}}You are the owner of this article.You have permission to edit this article.© 2022 Lee EnterprisesShare ThisJLARC faults financing authority critical to Northam small business COVID-19 grant programShare this“Small businesses are hurting,” said Del. Ken Plum, D-Fairfax, JLARC chief.JLARC, the General Assembly’s watchdog panel, also found dissatisfaction with the Virginia Information Technologies Agency.The Virginia Small Business Financing Authority, the state agency responsible for administering a new $71 million grant program for small businesses affected by the COVID-19 pandemic, is not doing its job in helping small firms get loans, according to a new report by the General Assembly’s watchdog agency.The report by the Joint Legislative Audit and Review Commission on Monday found that the authority has left unspent from 76% to 92% of the money it has had available the past three years for loans and grants to small businesses in Virginia.The report also found that the authority “is not meeting most criteria to be an effective lending organization,” including lack of written policies or tools for assessing lending risks, tracking the use of loan and grant funds, and monitoring the health of outstanding loans.The report comes at a sensitive time for the authority, part of the Virginia Department of Small Business and Supplier Diversity, which has begun managing the Rebuild Virginia grant program that Gov. Ralph Northam created this summer with money from federal CARES Act funding for COVID-19 relief, as well as a separate $10 million loan program for COVID-19 aid to businesses.The Rebuild Virginia program also has been cited as a potential source of help for businesses that would have to provide up to two weeks of quarantine sick leave for employees, under legislation pending in the assembly.“You’re going to be kicked up by quite a big notch,” JLARC Chairman Ken Plum, D-Fairfax, told Tracey Wiley, executive director of the agency that includes the authority, citing the increased funding it is getting to handle under the Rebuild Virginia program. “What I want assurance of is that you’re up to the task.”The performance of the small-business agency was one of two major reports JLARC staff delivered Monday. It also recommended that the assembly consider eliminating two tax credits that it concluded — as it has before — have not been effective in creating jobs in coal mining and use of Virginia coal to generate electricity.The Small Business Financing Authority is a relatively small operation that has done little with its resources since the retirement of its executive director three years ago coincided with the departure of two loan officers and led to a period of leadership turmoil, the report said.The authority “has not fully achieved its mission of helping small businesses access financing in recent years,” concluded Lauren Axselle, project leader of the JLARC staff report on the state agency for supplier diversity.Since 2016-17, the financing authority has left 90% or more of its funds unused in two years and 76% in the fiscal year that ended on July 30. Last year, the authority received 67 loan applications, or fewer than half of the 145 it processed three years ago.“This is a pretty bad report,” said Del. Kirk Cox, R-Colonial Heights.Sen. Lionell Spruill Sr., D-Chesapeake, suggested that the state “replace the top management,” but Wiley, leader of the small business supplier diversity agency, gave a detailed account of the struggle to replace the former executive director and retired loan officials at the authority from jobs that compete with the banking industry for talent.Wiley appointed Howard Pisons, former president and CEO of Community Bankers’ Bank, a year ago, but the COVID-19 pandemic erupted just six months into his tenure.The public health emergency has raised the stakes for the authority, charged with administering a grant program that Northam created to help ease pressure on small businesses with federal emergency funding that is scheduled to expire at the end of the year.“Small businesses are hurting,” Plum said. “Do you have the ability to get that money out to them in the appropriate way?”In its first month, the Rebuild Virginia program distributed about $1.5 million to 187 small businesses, with an average grant of $8,500 and a maximum limit of $10,000.Wiley said the program has been hindered by narrow eligibility requirements, including a prohibition on grants to businesses that had received other CARES Act funding, such as potentially forgivable loans from the Paycheck Protection Program.The state plans to change that requirement to broaden the number of businesses eligible to receive help through Rebuild Virginia.“We are looking to relaunch the grants with additional eligibility options within the next seven days,” Wiley told the assembly’s oversight commission. “We are looking forward to providing more funding to more businesses at a greater opportunity.”Nicole Riley, executive director of the National Federation of Independent Business, welcomed the plan to broaden eligibility for grants.“Time is of the essence,” Riley said Monday.In other business, JLARC staff recommended that the assembly consider eliminating two tax credits that together cost the state nearly $315 million in tax revenues from 2009-10 through 2017-18. This is not the first time that JLARC has recommended eliminating the two tax credits as ineffective in protecting coal production jobs in Southwest Virginia and encouraging electric utilities to burn Virginia coal for power generation, now dominated by natural gas.Previous attempts to eliminate the tax credits were blocked by Southwest Virginia legislators in a General Assembly then largely controlled by Republicans who opposed the idea as a tax increase on the industry.The report says the tax credits do little to generate jobs, economic activity or personal income. The Coalfield Employment Enhancement Tax Credit returns 3 cents for every $1 spent, and the Coal Employment and Production Incentive Tax Credit returns 4 cents for every $1, according to the report.“Coal tax credits are among the state’s largest incentives, but they generate negligible economic benefits for the state and no longer appear relevant,” the report concludes.(804) 649-6964“Small businesses are hurting,” said Del. Ken Plum, D-Fairfax, JLARC chief.JLARC, the General Assembly’s watchdog panel, also found dissatisfaction with the Virginia Information Technologies Agency.{{title}}{{summary}}You don't have any notifications.Get up-to-the-minute news sent straight to your device.Topics

Please subscribe to keep reading. You can cancel at any time.Loading&amp;hellp;{{title}}{{description}}{{banner}}(renews at {{format_dollars}}{{start_price}}{{format_cents}}/month + tax){{tagline}}{{special_title}}{{html}}You are the owner of this article.You have permission to edit this article.© 2022 Lee EnterprisesShare ThisJLARC faults financing authority critical to Northam small business COVID-19 grant programShare this“Small businesses are hurting,” said Del. Ken Plum, D-Fairfax, JLARC chief.JLARC, the General Assembly’s watchdog panel, also found dissatisfaction with the Virginia...

JLARC faults financing authority critical to Northam small business COVID-19 grant program

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