Small business owners are disappointed with new federal jobs act

By Barbara Pash

The federal Small Business Jobs Act that the president signed Monday is being hailed as a boon for small businesses, but some of the people for whom it is intended don’t see it that way.

“The law falls short of addressing the most significant problems all business owners face, which are lack of sales and uncertainty in the economy over taxes,” said Ellen Valentino, Maryland state director of the National Federation of Independent Businesses.

Valentino acknowledged that the Small Business Jobs Act will help some small businesses qualify for new loans or specific tax breaks.

“If you’re going to pass and sign [the bill] into law and say that this is the best good news for small businesses, you should have used the vehicle to do more,” Valentino said, whose organization is the state’s largest advocacy group for small business.

President Obama invited Gov. Martin O’Malley to yesterday’s signing ceremony in recognition of his administration’s establishing small business credit programs in Maryland and because of O’Malley’s efforts to round up support for the bill among the nation’s governors.

After its passage last week, O’Malley issued a statement that the act represents “real progress in getting credit flowing again to our small businesses” and “enabling them to expand and create new jobs.”

Jonathan Oleisky, CEO of Media 924, an integrated social marketing company, said the new law does gives small businesses more opportunity to borrow capital and encourages hiring. “Something is better than nothing,” he said.

But in the end, for small businesses, “it’s about sales, long-term contracts and finding their way to profitability,” Oleisky said. “Will this law really help small business in Maryland do that? That remains to be seen.”

Before the law was passed, Andrew Kreinik, vice president of, took his concerns to the state’s members of Congress. He said he told them that “we can talk about tax credits and assistance, but if you don’t have customers, you don’t have a business.”

In Kreinik’s opinion, a better way to help small businesses would have been to model what is doing. The website, which went live last month, offers sales and marketing technology and expertise with the goal of enabling small businesses to be more competitive with larger companies

The website has the backing of nine business and trade associations in Maryland, representing over 20,000 small businesses.

They are Maryland Chamber of Commerce, Maryland Retailers Association, Greater Baltimore Committee, Maryland Hispanic Chamber of Commerce, Maryland Tourism Council, Maryland Restaurant Association, Maryland Association of CPAs and Maryland Bankers Association.

“The [new] law doesn’t provide the tools small businesses need,” Krienik said. “The law should be focusing on what kinds of assistance businesses need in order to grow and be sustainable.”

“Some credit is given if you hire the unemployed,” he added. “But businesses are not going to hire the unemployed, or anyone, until they have more business.”

O’Malley own tax credit for hiring the unemployed has aided the employment of less than 400 workers out of the 4,000 it was expected to help.

NFIB’s Valentino was disappointed that the new federal law failed to address two specific issues for small business owners.

One is a provision in the new federal health care reform law that requires them to fill out 1099 forms for all vendors with whom they do business. She called this Internal Revenue Service reporting measure “onerous” and said that “it puts a tremendous amount of paperwork on small business owners across the state.”

The second issue is tax liability and whether certain tax breaks that are now in effect will be extended. “We need to extend all the expiring tax rates,” she argued.

Republicans in Congress agree, but Democrats and the White House want the tax breaks extended to only those making less than $250,000 a year.

“Business people aren’t able to make plans, to invest in their business or to hire employees in the face of such uncertainty,” said Valentino.

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