The New Jersey Senate on Thursday passed a bill creating a $50 million program to assist minority-owned businesses but rejected Republican efforts to spend $300 million to assist all small businesses impacted by the COVID-19 pandemic.
All but one Republican joined Democrats in backing S-2769, which would create a Minority Business Development Program within the state Economic Development Agency (EDA) to provide grants and technical assistance to minority-owned businesses and appropriate $50 million for that purpose.
But Sen. Michael Testa (R-Cumberland) had argued for more money to help more businesses. He said that with state revenues coming in higher than anticipated and $4 billion the state borrowed, New Jersey has more than enough money to aid restaurants, nonprofits and other businesses struggling to survive through state-imposed restrictions.
“We have an enormous surplus bolstered by borrowing meant to support these very sorts of programs,” Testa said. “That surplus is growing by leaps and bounds as revenues exceed all forecasts.”
Invoking procedural rule
Testa used a procedural rule to try to wrest from a committee for a floor vote a bill he is sponsoring with the entire Republican caucus that would give the EDA $300 million, preferably in federal funds from the CARES Act Coronavirus Relief Fund or otherwise from a state appropriation. Its goal is to provide grants or loans to small businesses and nonprofits for costs associated with state-mandated closures or other restrictions due to the pandemic. The Democratic majority prevented that.
Then he tried to amend the minority business development bill to essentially include the provisions of his bill but Democrats rejected that, as well.
“We all know those businesses have received little more than symbolic support from Gov. Murphy’s administration and much more needs to be done,” Testa said, calling the state’s initial small business relief program last spring “stingy and inadequate.”
The EDA announced Wednesday that it is opening pre-registration for a second round of the Small Business Emergency Assistance Loan Program on Feb. 10, which is to provide $10 million in low-cost financing to eligible small businesses and nonprofits using funds from a U.S. Economic Development Administration CARES Act appropriation. The first round provided more than 150 businesses with some $10.4 million.
Testa said the state should be spending more, noting New Jersey got $2.4 billion in federal CARES Act funds over which it had wide discretion to use provided the spending was directly related to the pandemic.
Criticizing Murphy’s COVID-19-related relief
Testa said that Murphy has either conditionally vetoed or absolute-vetoed several bills seeking to provide COVID-19-related relief, including one that sought to create a $100 million EDA emergency no-interest loan program for the hospitality industry. In his veto message, Murphy said the bill, S-3959, would “duplicate” existing EDA efforts and would have set loan criteria that were too rigid. The bill passed both houses with almost no opposition, more than enough votes to override a gubernatorial veto, but the Democratic-controlled Legislature has not sought an override.
Sen. Robert Singer (R-Ocean) complained that the bill he and most other Republicans ultimately voted for does not include any assistance for women-owned businesses.
“We should help as many small businesses as we can statewide,” he said. “We have the money … These people are pretty terrified. They’re hanging on by their fingernails. They’re working seven days a week to try to remain open and we must support them.”
Sen. Troy Singleton (D-Burlington), prime sponsor of the minority business program legislation, said he introduced the bill because less than 15% of the CARES Act funds spent by the EDA went to help minority-owned businesses. He is sponsoring several other bills, including ones related to women-owned businesses and those in rural areas of the state because all are worthy of assistance.
“Today, what we have in front of us is an opportunity to help a group of businesses that have been adversely affected and could use the help,” he said. “Not that we cannot do something else and not that we should not do something else. But let’s not walk away from this opportunity because other opportunities are still making their way through the Legislature.”
Singleton’s bill now heads to the Assembly for consideration.