The Gov. Deval L. Patrick administration hopes its proposal to help small businesses reduce costs and earn tax credits will be approved by the Legislature by the end of the fiscal year, a state official said Wednesday.
Michael Hunter, the undersecretary for business development at the Executive Office of Housing and Economic Development, said the Senate is expected to release its own version of a state jobs bill today, while a House version should follow by the end of June.
“We’re hoping that by the end of the fiscal year on June 30 that we’ll have a bill,” said Hunter, in outlining the provisions of the bill to local business leaders Wednesday morning at the Berkshire Chamber of Commerce.
Hunter said there are some provisions in the Senate’s version of the bill that may need refinement, and added “the way we see this coming out is that our primary mission will still be in place.”
“Our small businesses need help,” Hunter said. “Any way that we can make small businesses successful, we welcome those opportunities.”
Small businesses account for 85 percent of the state’s businesses, according to the governor’s office. That ratio holds true in Berkshire County where some 900 of the Berkshire Chamber’s 1,100 members have 10 employees or fewer, according to President and CEO Michael Supranowicz.
The jobs bill would provide small businesses with a $2,500 tax credit for each new full-time equivalent job they create, providing that position remains intact for at least one year. The legislation would also help small businesses minimize their costs by lowering health care costs, and freezing the unemployment insurance rate increase for 2010.
Following Wednesday’s meeting, Supranowicz said the tax credits would help local businesses because the economy in the Berkshires is beginning to recover. But Supranowicz said he was unsure how the bill would help minimize health care costs because it has yet to be determined how local businesses health care costs under the state’s 4-year-old universal health care plan are going to align with the new federal legislation.
In answer to a question, Hunter said he wasn’t qualified to comment on how the provisions in the state and federal health care bills will align. But he said the jobs bill would require health insurance companies to file changes in small business premiums with the state Division of Insurance. In conjunction with the DOI, the state would seek to disapprove rates that are excessive and unreasonable in relation to the benefit that is provided, he said.
“Some of this is already in place,” Hunter said. “But there’s a more extensive part of the bill that we’re hoping to get through the Legislature.”
The bill would also consolidate two agencies that are responsible for financing small businesses in the state into the Massachusetts Growth Capital Corporation, an umbrella organization that would function as a one-stop source for debt equity and financing for small and mid-sized businesses.
The MGCC would be funded by a $25 million capital authorization and by a $15 million transfer from the Emerging Technology Fund.
“I think the recession has compounded the challenges around financing,” Hunter said. “What we’re seeing continually is businesses that are viable that aren’t bankable. Those folks aren’t being financed.
“So what we’re attempting to do through this new program is really help bridge the gap and keep those viable businesses going,” he said.
The governor’s proposal to freeze the unemployment rate was filed separately from the rest of the bill, Hunter said. If approved, he said the rate freeze would save employers on average about $158 per employee, or $391 million in total.
The jobs bill would also extend permits for development and infrastructure projects that were put on hold because of the recession.
“We’re going to need to put the pedal to the metal to get some new projects up and running, and exploring different ways to do that,” Hunter said.
Hunter said the state has had discussions with Berkshire Economic Development Corporation President David M. Rooney regarding the creation of new regional economic development organizations that would oversee economic development in each region of the state.
Supranowicz said the chamber would be in favor of having Berkshire County remain a separate economic development entity rather than have it combined with the rest of Western Massachusetts.
