Washington Department of Commerce (COM) data details the disparate impact of COVID-19 on taxable business income, which will affect the state operating budget, on different industries.
Looking at data from October, some industries have seen increases in the percent change in taxable business income from the same period last year. The agriculture, forestry, fishing and hunting industry has experienced an 18% increase. On the flip side of the coin, the leisure and hospitality industry has experienced a 32% decline.
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Following leisure and hospitality, manufacturing has seen a 22% decline in taxable business income. According to COM Director Lisa Brown, aerospace accounts for a large portion of that decline.
In its first meeting of the 2021 legislative session, the House Community & Economic Development Committee was provided an update from the Department of Commerce (COM) on the state’s response to the economic downturn caused by COVID-19. COM also provided a preview of the agency’s economic recovery plan for small businesses.
To date, $800 million in federal CARES Act dollars have been disbursed. About $624 million has gone to local governments, tribes, and rental assistance. Businesses and nonprofits have received $197.2 million.
Brown says that COM is incorporating four core principles into its economic recovery work: equity for underserved entrepreneurs, small business assistance, investments in innovations, and the compilation of data tracking jobs and economic recovery by sector, industry, and region.
Looking ahead to small business assistance programming in the near term, COM is in the process of setting up a $30 million revolving loan fund. COM will have targeted goals to work with businesses that have faced disparities or have been at a “historical disadvantage” says Chris Green, Assistant Director of COM’s Office of Economic Development and Competitiveness.
Green says the loan fund is expected to become available in the next few months.
The point of this is to target businesses that just need some bridge capital. So between $100,000 to $150,000 to really recover. This would be hopefully low or no interest. Some of these things are being negotiated and we’re in the process of using this $30 million to leverage what we think will be about $70 million from the private sector.”
More programming is expected to implemented with funds COM received from the U.S. Economic Development Administration (EDA), including an “Equitable Accelerator Program.” The program will help “historically disadvantaged individuals” start tech companies. To create the program, COM will need to raise some venture capital from the private sector as well.
The EDA funds will also be used by COM to provide grants to organizations that can create “Innovation Clusters.” Green defined these clusters as a collaboration between the public and private sectors, as well as academia, to drive innovation. These grants will be produced this spring.
COM also points to the $6.6 million included in Gov. Inslee’s budget for small business digital equity,
This will institute programs that will really target small businesses. Some of this is about how we enable small businesses to get online. What we noticed during this pandemic is that those who had a web presence and knew how to navigate and sell things electronically had an advantage.”
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