Mayor Abramson hosts a business roundtable in Louisville at the behest of President Obama
Disposable coffee cups and tiny plastic water bottles litter the massive conference table in the Mayor’s Gallery at Metro Hall, evidence of the 90-minute meeting between Mayor Jerry Abramson and some 20 small-business leaders whose purpose was, essentially, to save the American economy.
Specifically, their charge was to figure out how to beat back the tides of economic recession, create jobs and then report these ideas directly to the White House. Louisville was one of 10 cities chosen by the Obama administration to participate in this economy-spurring pow-wow. As such, poster-size sheets of yellow paper, tacked to the walls and scribbled upon with black felt marker, reveal the fruits of their imaginative labor: “Maintain current tax cuts.” “Reduce restrictions on FHA loans.” “Internship hiring incentives.” And so on.
As the businesspeople file out of the room, many of them already fondling their Blackberrys, Abramson does his best to shake as many hands as possible.
“The dilemma has been, ‘If I’m a company, I would hire people if …’ So what you see here are ideas on how to incentivize hiring,’’ says Abramson, pointing to the poster sheets. ‘‘And we came up with a lot of them.”
Then the handful of reporters who showed up begin questioning him about the city’s higher-than-predicted budget deficit, which the mayor rebuffs, saying the deficit had been accounted for and the appropriate cuts were made.
But there is no phasing him today. Abramson is ebullient, and his litany of ideas is proof.
It’s not exactly a coincidence that the River City found itself on such an exclusive list following President Obama’s so-called “jobs summit” earlier this month. The unemployment rate for Louisville has hovered at or slightly above the national average — 10.3 percent — for most of 2009, and when coupled with a lingering industrial economy and a burgeoning creative one, solutions to what ails Louisville could easily apply across the nation.
Among the strategies and incentives discussed, the one that occurs with the highest frequency relates to Small Business Administration (SBA) loans, which are, in the eyes of the business community, currently underfunded and too restrictive. Due to last year’s financial meltdown and subsequent credit crisis, the number of SBA loans in the commonwealth fell by 40 percent. Consequently, corporate income receipts are projected to decline by more than 37 percent over the next year, according to Kentucky general fund revenue data — meaning action of some kind must be taken now to prevent further hemorrhaging.
“We need to expand the services of the SBA,” says Tom Masterson, owner of TEM Electric, a construction firm that has contracted with city and state governments on multiple occasions. “More staff, more funding, more of everything, basically.” Masterson employs some 70 people and has been in business for more than a decade. He says that without the stimulus spending bill, which he calls “a lifesaver,” he has no idea where he, his business or his staff would be right now.
Moreover, Masterson — who attended the mayor’s business roundtable — wants to expand his business beyond its current location in Fayette County, but cannot due to the tight credit market and lack of substantial loans.
Aside from the federally controlled SBA, the recent announcement by Gov. Steve Beshear and Mayor Abramson regarding a new job creation program — dubbed “INK,” aka Incentives for a New Kentucky — will create roughly 650 new jobs across 12 different businesses in Louisville alone. To be eligible, businesses must have at least $2.5 million in equipment and other expenditures, and 85 percent of their workforce must consist of full-time employees. Officials estimate INK can save 1,400 jobs in the commonwealth and create an additional 1,100.
Additionally, last week the Louisville Metropolitan Business Corp. disbursed a separate set of low-interest loans totalling $205,000 to a handful of very small local businesses, including Baxter Avenue’s Bunz burger eatery, as well as Bluegrass Brewing Company, which received $100,000 to open a new location adjacent to the downtown arena currently under construction.
Although some of the companies present for the Obama/Abramson business salon weren’t exactly “small” — for example, Republic Bank, a large, locally owned bank that has been investigated by the FDIC for predatory lending, was there — the basic ideas that were shopped around are buoyant enough to lift all boats once the recovery on Wall Street begins to generate jobs.