Chamber News. Where will it hit home? Volume 7, Issue 2. March 2009

Transcription

1 Volume 7, Issue 2 March 2009 Where will it hit home? C A R R O L L C O U N T Y C H A M B E R O F C O M M E R C E Chamber News A lot of buzz came along with President Obama s stimulus package, formally known as the American Recovery and Reinvestment Plan. The objective of the plan is to affect most Americans, and some areas will definitely hit home. Starting in June, millions of employees will begin to see about $13 extra weekly in their income. This is part of a $400 (individual)/$800 (couple) tax credit to be granted throughout the rest of Further in tax cuts the $1,000 child tax credit would be extended to more low income families that don t make enough money to pay income taxes, poor families with 3 or more children will get an expanded Earned Income Tax Credit. Middle-income and high income taxpayers will be spared from paying the Alternative Tax Minimum. Consumer tax breaks are to include first time homebuyers who are eligible for up to $8000 tax credit if they purchase a home before December 1. Current homeowners who add energy efficient items such as window, furnaces and air conditioners can get a tax credit to cover 30% of their costs. Also, those who buy a new vehicle before the end of the year can write of their sales tax. This vehicle tax break is for individual consumers with modified adjusted gross income of less than $125,000 or joint-filers making less than $250,000 in year Any new vehicle under 8,500 pounds gross weight, new vehicles of any model year when the original owner commences with the taxpayer, and any vehicle sold for under $49,500 qualifies for the deduction. Infrastructure is a very vital part of the package as well. Approximately $90 billion was set aside for modernization of highways, waterlines, aging bridges, train rails, etc. In the area of health insurance and public assistance, the government will pick up 65% of the cost of COBRA coverage for the first 9 months of unemployment. Medicaid benefits will be available through 2010 to those who are receiving unemployment benefits or have exhausted those benefits and have no health insurance coverage. Individuals who get Supplemental Security Income would get one-time payments of $250. There is also $400 million to replace the 30 year old Social Security Administration s National Computer Center to meet growing needs for processing retirement and disability claims and records storage. Another $500 million is for state formula grants for construction and rehabilitation of facilities to help persons with disabilities prepare for gainful employment. The plan also includes $3 billion to provide temporary emergency assistance to needy families. There is also $20 billion dollars to increase the food stamp benefit by 13% to assist in defraying the rising cost of food. More on the healthcare end, $20 billion will be used to improve health information technology to prevent medical mistakes, provide better care to patients, and introduce cost-saving efficiencies. Another $4.1 billion is available to provide preventative care and to evaluate the most effective healthcare treatments. HUD sponsored low income housing upgrades to increase energy efficiency including new insulation, windows, and furnaces are budgeted for $2.5 billion to be awarded competitively. Another $6.2 billion is available to help low income families reduce their energy cost by weatherizing their homes and making our country more energy efficient as well. For jobs and unemployment, people drawing unemployment would get an extra $25 and will receive their checks for longer. To protect vital service jobs there is $4 billion for state and local law enforcement funding, which is set aside for hiring of new officers. Approximately $20 billion is aimed to create green jobs to make wind turbines, solar panels, and improve energy efficiency in schools and federal buildings. Job training for at-risk youth has been allotted $300 million to improve on Job Corps Facilities. Investments in education include $54 billion to prevent or restore state budget cuts, of which $39 billion must go toward kindergarten through 12th grade and higher education. Another approximately $8 billion will assist with modernization/renovation of schools and colleges. The Pell Grant was increased by $500 from $4850 to $5350. College work-study, and student aid administration received $540 million to support undergrad and graduate students who work and to help the Department of Education administer surging student aid programs while navigating the changing student loan environment. The limit on student loans was also increased by $2000 for unsubsidized Stafford loans. Information from courier-journal.com and ucdailynews.com.

2 Graph from New York Times blog by Catherine Rampell. Where, oh where, is the Chamber meeting? As usual your Chamber membership meeting will be held the second Tuesday of every month at 12:00 noon. We will be returning to meeting at General Butler s Two Rivers Restaurant in The River Room. March 10 - The River Room April 14 - First National Bank May 12 - The River Room June 9 - The River Room July 14 - The River Room August 13 - Annual Banquet September 8 - The River Room October 13 - The River Room November 10 - The River Room December 8 - The River Room The cost per meal per person will be $11.50 per person. We look forward to seeing you there!! Page 2 CHAMB ER NEWS

3 SBA Applauds Stimulus Bill, Planning Underway For Broadest, Quickest Small Business Impact WASHINGTON The American Recovery and Reinvestment Act contains a package of loan fee reductions, higher guarantees, new SBA programs, secondary market incentives, and enhancements to current SBA programs that will help unlock credit markets and begin economic recovery for the nation s small business sector. The tax incentives and credit stimulus elements of the Recovery Act will truly help small business owners affected by the credit crunch, and will provide financing opportunities to help them create new jobs in their communities, said Acting SBA Administrator Darryl K. Hairston. There s a lot to digest in the legislation, and SBA has established teams to tackle a wide variety of policy decisions, system modifications, regulatory changes, legal requirements, and new program launches authorized by the President and Congress, said Hairston. The bill provides $730 million to SBA and makes changes to the agency s lending and investment programs so that they can reach more small businesses that need help. The funding includes: $375 million for temporary fee reductions or eliminations on SBA loans and increased SBA guaranteed shares, up to 90 percent for certain loans $255 million for a new loan program to help small businesses meet existing debt payments $30 million for expanding SBA s Microloan program, enough to finance up to $50 million in new lending and $24 million in technical assistance grants to microlenders $20 million for technology systems to streamline SBA s lending and oversight processes $15 million for expanding SBA s Surety Bond Guarantee program $25 million for staffing up to meet demands for new programs $10 million for the Office of Inspector General The bill also authorizes refinancing for certain SBA loans so borrowers can expand their businesses on favorable terms, and expands leverage capability for Small Business Investment Companies. We are going to be part of the solution, and this bill gives us specific tools to make it easier and less expensive for small businesses to get loans, give lenders new incentives to make more loans, and help restore healthy SBA secondary markets to boost liquidity, Hairston said, noting also that more details on implementation will be coming over the next few weeks. The stimulus bill takes a comprehensive approach and attacks several problems facing small businesses at once by reducing fees, guaranteeing a greater share of certain loans, expanding capacity in the Microloan program, providing new loans to help small businesses keep their doors open through economic hardship, as well as new mechanisms to help unfreeze the secondary markets for SBA-backed loans. Declines in SBA lending volume last year, which are continuing in FY 2009, reflect problems in the broader credit markets, and present hurdles to small businesses that are seeking credit in the current economy. The financial crisis has created a variety of conditions that impact small businesses, including a lack of liquidity in the banking system, a reluctance of many lenders to extend new loans, tightened credit standards, weaker finances at small businesses, and uncertainty about taking on new debt on the part of many entrepreneurs. Continued on page 4. V OLU ME 7, IS SU E 2 Page 3

4 SBA Continued from page 3... The Recovery Act addresses small businesses lending problems, and addresses key investment and contracting issues. The bill helps Small Business Investment Companies better leverage investment capital to reach more small companies. The bill also increases the current contract limit for SBA s Surety Bond Guarantee program, which will help small businesses compete for contracts. 90 Percent Guarantee The bill allows SBA to raise its loan guarantee from the current levels to as much as 90 percent for some loans. At present, SBA can guarantee loans up to 85 percent on loans up to $150,000, and up to 75 percent on loans greater than $150,000. The 50 percent guarantee on SBA Express loans would remain unchanged. Increasing the SBA guarantee percentage will encourage lenders to extend more capital to small businesses by increasing the share covered by an SBA guarantee. Business Stabilization Loans The bill creates a new SBA loan program to provide deferred-payment loans of up to $35,000 to viable small businesses that need the money to make payments on an existing, qualifying loan for up to six months. These loans will be 100 percent guaranteed by SBA. Repayment would not have to begin until 12 months after the loan is fully disbursed. The bill provides $255 million for this new program. These loans will help ensure that small businesses have time to re-focus their business plans in order to succeed in the long run. Microloans The bill expands SBA s Microloan program, which provides small loans (up to $35,000) paired with technical assistance to start-up, newly established or growing small businesses. The bill provides funding to increase loans from SBA to participating Microlenders by $50 million through September 30, 2010, and adds $24 million in grants to provide technical assistance to borrowers. Historically, these loans reach low-income individuals, women and minorities in both rural and urban areas. Expanding this program through the stimulus bill will help ensure these entrepreneurs are not left behind in the credit crunch. Refinancing The bill also gives SBA the power to use the 504 Certified Development Company program to refinance existing loans for fixed assets, providing fresh support for small business expansion. This change will help business owners expand their current development projects and create jobs in their communities. Secondary Market Expansion The bill authorizes SBA to establish a secondary market for pools of first lien loans under the 504 program. These first lien loans from commercial lenders currently have no SBA guarantee. The bill authorizes SBA to deploy federal guarantees for pools of these first lien loans, so that they can be sold to investors in a secondary market. Providing liquidity for these first mortgages will help encourage lenders to continue participating in SBA s 504 loan program, which provides a key source of capital for community development and other projects. The bill also empowers SBA to set up a Secondary Market Lending Authority that would make direct loans to broker-dealers that participate in the secondary market for SBA-guaranteed 7(a) loans. These broker-dealers would use the funds to purchase SBA-backed loans from commercial lenders, assemble them into pools and sell them to investors in the secondary loan market. This program may help address some of the issues facing the secondary market for SBA loans and may ultimately help SBA lenders make new loans to borrowers. Investment Program The bill helps SBA-licensed Small Business Investment Companies (SBICs) and families of SBIC funds better leverage the capital they use to invest in small businesses. The bill sets maximum levels of funding the agency can provide to these companies at up to three times the private capital raised by those companies, or $150 million, whichever is less. It also raises the percentage any one SBIC can invest in a single small business to 10 percent of total capital, and raises from 20 percent to 25 percent the percentage of any licensee s dollar investments that must be made in smaller businesses. Surety Bonds The bill also raises the maximum contract amount that can be covered by an SBA guaranteed surety bond from $2 million to $5 million, and, under certain circumstances, for contracts amounting to $10 million, and provides additional funds to cover the costs of expanding this program. Small businesses need surety bonds in order to bid on and obtain many federal and other contracts. SBA guarantees surety bonds to small businesses that private surety companies would not otherwise be able to extend.

5 For chamber members only! Did you know that you are eligible for a discounted insurance rate through our Chamber J Plan Plus? Please contact Phil Brown Insurance Agency at info@philbrowninsurance.com or Take advantage today!! Thank you to the Chamber Members who came for the Feb 10 th meeting sponsored by UnitedHealthCare. We had a great turnout for the lunch and the presentation by keynote speaker Scott Brown of Phil Brown Insurance. If anyone would like to receive a free booklet on FAQs regarding Health Savings Accounts, please contact Jennifer Brown at Phil Brown Insurance, SBA Disaster Loan Deadline Is March 16; Small Business Owners Still Have Time To Apply ATLANTA- The U.S. Small Business Administration is reminding disaster victims that March 16 is the filing deadline for federal economic injury disaster loans that are available to small businesses located in the counties of Boone, Carroll, Daviess, Henderson, Jefferson, Oldham, Trimble and Union in the Commonwealth of Kentucky as a result of severe storms, tornadoes, torrential rainfall and flooding beginning May 30, These counties are eligible because they are contiguous to one or more primary counties in the State of Indiana. SBA recognizes that disasters do not usually stop at the county or state lines. For that reason, counties adjacent to primary counties named in the declaration are included, according to Frank Skaggs, Director of SBA s Field Operations Center East. When the Secretary of Agriculture issues a disaster declaration to help farmers recover from damages and losses to crops, the Small Business Administration issues a declaration to assist small businesses and most private, non-profit organizations affected by the same disaster, Skaggs added. Under this declaration, SBA s Economic Injury Disaster Loan (EIDL) program is available to farm-related and nonfarm-related small business concerns and small agricultural cooperatives that suffered financial losses as a direct result of this disaster. Farmers and ranchers are not eligible to apply to SBA. Eligible small businesses, and private non-profit organizations may qualify for loans up to $2 million. These loans are available at a 4 percent interest rate with loan terms up to 30 years. SBA determines eligibility for the program based on the size of the entity, type of activity and its financial resources. Loan amounts and terms are set by SBA and are based on each applicant s financial condition. Under this disaster declaration, SBA cannot provide loans to agricultural producers. Disaster victims should contact SBA s Customer Service Center by calling ( for the hearing-impaired) Monday through Friday from 8 a.m. to 9 p.m., and Saturday 9 a.m. to 9 p.m. EST or by ing our customer service center at disastercustomerservice@sba.gov. Loan applications can be downloaded from the SBA s website at Completed applications should be mailed to: U.S. Small Business Administration, Processing and Disbursement Center, Kingsport Road, Fort Worth, TX Victims may visit SBA s secure Web site at to apply for disaster loans. Completed loan applications must be returned to SBA no later than March 16, 2009.

6 Calendar of Events Membership Meeting - Tuesday, March 10 at General Butler s Two Rivers Restaurant at 12:00 noon featuring Cathe Dykstra, Executive Director of Family Scholar House. She will present on their outreach program beginning in Carroll County with the help of JCTC. Carroll County Health and Safety Partnership Exhibition: Saturday, March 28, 2009, 8 am to 2 pm, KY National Guard Armory, FREE ADMISSION! Fun for the whole family! FREE HEALTH SCREENINGS! Chamber sponsored BIKE RODEO starts at 10 am. Interested volunteers contact Rachel Troxell or r.troxell@carrollcountyky.com. Cooking With Shawn, Let s Cook Cajun! Thursday, March 26, 6 8 pm, Carroll County Extension Service, $5.00 Fee, Class limited to 20. Call to register. Carroll County Relay for Life Kick Off Wednesday, March 4, 5:30 pm, Carroll Co. Library, FOOD, FUN, PRIZES AND MORE! CCHS Murder by the Book production, March pm and 7-9 pm.; March 8, 2-4pm and 7-9 pm. Held in the Sam Simpson Auditorium at CCMS. Tickets are $4. JCTC OPEN HOUSE! March 19, 5-7 pm. More info: ext Looking for employment? Census 2010 is looking for you. Up to 40 hours, temporary, part-time employment. More info: or