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.
Editorials
A little incentive — 09/06/09
Pullin bill can create jobs by helping small businesses grow
- Editorials
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Charles Chattin
Before it merged with Ashland Community College to form Ashland Community and Technical College as a result of the 1997 Higher Education Reform Act, the Ashland Area Vocational-Technical School compiled an impressive record for teaching job skills to young adults and placing more than 85 percent in jobs for which they were trained.
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Try again
It is time for Kentucky Speaker of the House Greg Stumbo, D-Prestonsburg, and Senate President David Williams, R-Burkesville, to cease playing political games and redraw district lines that are compact and are based far more on population changes during the first decade of this century than on partisan politics.
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'Asset poor'
More than one in four Kentucky households are “asset poor,” meaning that they are living from paycheck to paycheck with little or no financial cushion to fall back on should they suddenly lose their jobs or have another emergency resulting in a temporary loss of or delcine in income.
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Safer mines
The head of the federal Mine Safety and Health Administration (MSHA) says coal operators throughout the country are improving their operations and, as a result, mines are becoming safer. However, MSHA chief Joe Main said too many coal operators still “don’t get it” and are continuing to cut costs by ignoring safety. That’s why MSHA plans to continue targeting mines with a history of repeated violations for additional inspections.
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Not far enough
For the past three sessions of the Kentucky General Assembly, bills that would raise the minimum dropout age from 16 to 18 have been approved by the Kentucky House of Representatives by wide bipartisan margins only to die in the Senate without even a vote.
Now the Senate Education Committee has unanimously approved a dropout bill hailed as an alternative to the House bill, but it does not go nearly far enough. It is a halfway measure that would have only a limited effect on preventing teenagers from quitting high school before graduation and virtually assuring themselves of lives on the lowest rungs of the economic ladder.
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Not their job
The local government committee of the Kentucky House of Representatives has wisely killed a bill — dubbed “Cooper’s Law” — that would have allowed the family of the Lexington toddler with cerebral palsy to have a playhouse on their property despite a deed restriction that apparently prohibits such structures.
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Keeping FADE
Despite an increase in cost to the department, Carter County Sheriff Casey Brammell told the Carter County Fiscal Court that his department will continue to be active in the FIVCO Area Development Drug Enforcement (FADE) Task Force — at least for now.
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Needed changes
The soaring enrollment that Kentucky’s community and technical colleges have experienced in recent years could come to a sudden end — or at least be slowed — as about 5,500 students in the statewide system that includes Ashalnd Community and Technical College are expected to lose their financial aid under new rules being implemented by the federal government.
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Released early
While it is disappointing that 75 of the 952 prisoners granted early release in January have violated the terms of their releases, the good news is that none of the former inmates have been charged with new felonies. That’s an early, but positive, indication that the nonviolent felons released before their sentences were up have been carefully selected and are among those least likely to return to a life of crime.
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Obese children
Almost a decade after former Gov. Ernie Fletcher called childhood obesity an “epidemic” in Kentucky, a majority of Kentucky adults still think that there are too many overweight children in the state and they place the bulk of the blame squarely on the shoulders of their parents.
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Charles Chattin
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