A little incentive — 09/06/09 » Editorials » Daily Independent (Ashland, KY)

Editorials

Discussion

September 5, 2009

A little incentive — 09/06/09

Pullin bill can create jobs by helping small businesses grow

Anonymous The Daily Independent Sat Sep 05, 2009, 07:04 AM EDT

More important than the prestigious award State Rep. Tanya Pullin received from the National Federation of Independent Businesses is the law she guided through the Kentucky General Assembly that earned her that award.

House Bill 3 has the potential of creating hundreds of new jobs in small Kentucky communities that have little chance of attracting a major employer that immediately would create hundreds of jobs. Instead, House Bill 3 will create jobs two, three or four at a time by helping small businesses grow.

In fact, Tom Underwood, state director of the NFIB, said the bill Pullin created is so unique that it could become the model for similar laws in other states.

“Our research shows that it is the first of its type in the United States and a number of my colleagues are working on similar bills in other states,” Underwood said.

Kentucky and other states have long offered tax incentives to lure major industries to the state and to help existing large industries expand, but Pullin’s bill is the first to offer tax breaks to small businesses whose expansion may create on only one or two new jobs.

The reason states have favored tax incentives for large businesses and not small ones is understandable. Providing tax breaks to create only one to five jobs is not going to generate the kind of positive publicity politicians crave. Providing incentives to bring hundreds of jobs to a community is front page news, giving an incentive to create two or three jobs will create nary a ripple.

Yet most new jobs are created by small businesses opening or expanding, not by luring major employers to a community. Underwood says more than half of Kentucky’s workers (51 percent) are employed by small businesses with three to five employees.

There are 73,000 small businesses in Kentucky with fewer than 20 employees but only 149 businesses with more than 500 employees, Underwood said. Numbers like that provide a strong argument for state government doing something to help small businesses grow, but Underwood said they are “the ones who get left out whenever there is a stimulus package, economic development credits or pretty much anything else that we throw at manufacturers and large industry.”

But not any more. At least not in Kentucky. When Pullin’s bill approved by the 2009 Kentucky General Assembly takes effect in the 2012 tax year, it will offer tax breaks to businesses that invest at least $5,000 in capital equipment and technology and create at least one new job. The tax credit can be carried forward for at least five years for a maximum of $25,000.

While small businesses create the most jobs, they also have a high rate of failure. Many of them close within the first year, and others teeter on the brink of insolvency. If a tax break can help a small employer stay afloat, it is well worth the state’s investment.

Many of today’s major employers started out small. Ashland Oil was a small company with only a few employers when the late Paul Blazer purchased an existing refinery in the 1920s, and Dollar General store got its start in the small western Kentucky town of Scottsville. The opening of a discount store with a handful of employees in Rogers, Ark., in 1963 was the seed that grew into Wal-Mart, the world’s largest retailer.

We’re not saying that a small business that receives and tax incentive in Kentucky will become the next Wal-Mart, but you never know, do you? Small businesses often are the incubators for innovative ideas that help them flourish.

We congratulate Pullin for receiving the Guardian of Small Business Award, the NFIB’s most prestigious honor. In a state that has dozens of small towns that are a bit off the beaten path, her bill has great potential for creating jobs. Individually, the jobs House Bill 3 will help create are unlikely to attract much notice, but together they will have the potential of playing a major supporting role in helping Kentucky prosper.

Text Only

Editorials

Earmarks again?
Immediately, following the midterm elections of 2010 which saw Republicans regain control of the House of Representatives and capture seats in the U.S. Senate, Republican leaders in Congress announced they had heard the voice of the voters and vowed to cease using “earmarks,” the name given to appropriations slipped into bills by influential legislators without a vote.

May 26, 2012
Best in the nation
It may surprise many readers that Newsweek’s “best high school in America” is located right here in Kentucky and is open to selected students throughout the state, but then the Carol Martin Gatton Academy of Mathematics and Science at Western Kentucky University in Bowling Green is hardly your typical high school. In fact, it would be impossible for even the best public high schools to emulate the amazing success of students at the Gatton Academy.

May 25, 2012
After the vote
We offer today a few reflections on the messages voters sent in Tuesday’s primary election in Kentucky.

May 24, 2012
A mild winter
As we approach the Memorial Day weekend, long hailed as the unofficial start of the summer vacation season, we pause to reflect upon the winter that wasn’t.

May 23, 2012
Devices banned
Emergency breathing devices that tests have proven unreliable are being phased out under a directive issued by the federal Mine Safety and Health Administration. However, MSHA has given mine operators more than 18 months to remove all the air packs from underground mines.

May 22, 2012
A free weekend
In an effort to promote increased recreational use of the two lakes in the Daniel Boone National Forest, the U.S. Forest Service will offer free fishing and boating during the first weekend in June.

May 22, 2012
Ho-hum election
Psst! Want to know a secret? There’s a primary election Tuesday. And it’s right here in Kentucky! However, there has been so little interest in this election, that Secretary of State Alison Lundergan Grimes, the state’s top election official, is predicting that only betwixen 10 and 12 percent of the state’s eligible voters will take the time to go to the polls tomorrow.

May 21, 2012
A real rush job
By giving first reading approval to two identical ordinances creating the Northeast Regional Jail Authority, elected leaders in Boyd and Carter counties are reviving a 30-year-old political issue — only this time with different results.

May 20, 2012
KCTC leads way
The ability of Kentucky to compete with other states and the rest of the world for the good jobs of tomorrow keeps improving by degrees.

May 19, 2012
Slow decline?
Louisville’s Churchill Downs is seeing its shortest spring meets since 1975, and some owners, trainers and breeders fear they could get even shorter. That is unless the Kentucky General Assembly has a change of heart and gives the home of the Kentucky Derby the option of increasing its nonracing revenue by offering new forms of gambling.

May 18, 2012
More Editorials Headlines

Editorials

Search Results

Discussion

A little incentive — 09/06/09

Pullin bill can create jobs by helping small businesses grow

Site Map

Contact Us