By Larry Jones
July 4, 2011

Portland (OR) Mayor Sam Adams told mayors that cities across the nation are still suffering from the greatest recession since World War II. Many are facing high levels of unemployment and stagnant job growth. And for many local residents, the number one priority is a decent job. For that reason, several experts from federal agencies were invited to meet with members of the committee to discuss several federal initiatives that can assist local communities with economic growth and job creation.

Ellen Kim, a senior advisor with the Small Business Administration (SBA), told mayors that the Start Up America Initiative is a White House initiative that aims to accelerate high-growth entrepreneurships throughout the nation. It is a coordinated public/private effort that brings together the most innovative entrepreneurs, corporations, universities, foundations and other leaders working with a wide range of federal agencies to increase the prevalence and success of America’s entrepreneurs. The goal is to increase the number and scale of new growth firms that are creating economic growth, innovation, and quality jobs.

She told mayors that the initiative was launched in January 2011 and it has five key components: expand access to capital for high-growth startups throughout the country; expand entrepreneurship education and mentorship programs that empower more Americans not just to get a job but to create jobs; strengthen commercialization of the about $148 billion in annual federal funded research and development; identify and remove barriers to high-growth startups; and expand collaborations between large companies and startups. She discussed a number of collaborative efforts underway at SBA, the Department of the Treasury, Energy Department, Department of Commerce, Department of Labor and other agencies to achieve the goals of the initiative.

The State Small Business Credit Initiative is a program to increase the availability of credit for small businesses, and generate jobs and other economic development benefits in every state. The director of the program, Cliff Kellogg, told mayors that the initiative provides funds for state programs that support lending to small businesses and small manufacturers. The program provides $1.5 billion to support qualified state efforts and is expected to leverage an additional ten dollars in private lending for every dollar of federal funds. The program is available to all 50 states and the District of Columbia.

Although a state initiative, Kellogg said there are two key reasons mayors should be interested in the program. First, it expands access to capital which many small businesses in local communities may be in need of. Second, if a state chooses not to apply for funds, local governments in that state may apply to receive funds directly from the Treasury Department. So far, only Wyoming and North Dakota have indicated they will not apply for funds. There are five types of state programs supported by the SSBCI: capital access, loan participation, loan guarantee, state-run venture capital fund, and collateral support.

Under the New Markets Tax Credit program, the federal government allocates tax credits to community development entities (CDEs) in local communities which are used to lure private investment in low-income communities. CDEs are domestic corporations that serve as an intermediary vehicle for the provision of loans, investments, or financial counseling in low-income communities. Matt Josephs, senior policy advisor at the Treasury Department Community Development Financial Institutions Fund, told mayors that a total of $33 billion in tax credits have been allocated to CDEs in local communities since the program’s inception in 2002. The NMTC program provides a credit against federal income taxes to investors that make Qualified Equity Investments into CDEs. CDEs use the proceeds from the investments to make investments in businesses and real estate projects in low–income communities.

Activities to date show that over $20.9 billion in Qualified Equity Investments have been made into CDEs that received New Market Tax Credit awards between 2002 and 2010; CDEs have reported making over $15.8 billion of NMTC loans and investments through 2009; and these investments have been used to finance small and large businesses, manufacturing, for'sale-housing, retail shopping, community facilities and alternative energy companies.

After Adams led members of the committee in a discussion of the rules for considering resolutions, the committee adopted the following resolutions:

• Urban Manufacturing

• Support for President Obama’s “A Strategy for American Innovation: Ensuring Our Economic Growth and Prosperity”

• Support of the National Export Initiative

• Opposing Efforts to Limit Online Travel Companies’ Obligations to Collect and Remit Local Hotel Occupancy Taxes

• Relief From Federal Unfunded Mandates

• Calling on Congress to Redirect Military Spending to Domestic Priorities

• Support of Dollarwise Mayors for Financial Literacy Campaign

• Support of the Better Building Initiative

• Government Sponsored Entities (GSEs)

• Oppose Legislation That Would Preempt Local Revenue Raising Authority With Respect to Taxation of Wireless Telecommunications Services

• 2011 Broadband Communications Policy and Opposition to FCC NOI

• Federal Communications Commission “Notice of Inquiry” Related to Public Rights-of-Way and Wireless Facilities Siting

• Developing Regional Food Hubs to Strengthen Local and Regional Food Systems