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Demmer slams Pritzker small business program as inadequate

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Illinois

* Press release…

Governor JB Pritzker and the Illinois Department of Commerce and Economic Opportunity (DCEO) today announced the first round of grants awarded as part of the new Downstate Small Business Stabilization Program, just over a month after the program was launched. The fund was created to support small businesses in downstate and rural counties across Illinois that have experienced a negative impact due to the ongoing COVID-19 pandemic.

“As businesses across Illinois grapple with the devastating financial impact of COVID-19, my administration continues to look for ways to help provide relief that will allow small businesses, the backbone of our economy, rebuild and thrive,” said Governor JB Pritzker. “The Downstate Small Business Stabilization fund will help respond to the needs of our rural and downstate communities and address the impact COVID-19 has had across Illinois so that together we can start to rebuild our economy.”

The first $1.3 million in grants have been allocated to 65 businesses spanning 28 downstate communities. To support small businesses in downstate and rural counties across Illinois, DCEO repurposed $20 million in Community Development Block Grant (CDBG) funds to create the Downstate Small Business Stabilization Program. Through the program, small businesses of up to 50 employees can partner with their local governments to obtain grants of up to $25,000 in working capital.

* Response from Rep. Tom Demmer (R-Dixon)…

Demmer Calls For Real Small Business Support

When Governor JB Pritzker issued his first stay-at-home order more than two months ago, he told small businesses that assistance was available through the Downstate Small Business Stabilization Program administered by DCEO.

Local governments had to apply to DCEO on behalf of businesses in their jurisdiction who had financial need because of COVID related closures and limitations on business. Many small businesses were unable to apply for a grant because the amount of work required from their city or county was too much of a burden on small local governments.

The City of Dixon chose to participate and was a statewide leader, immediately hosting virtual meetings and establishing an 8-person team to assist small business owners with preparing and submitting an 80-100 page application for each business. The City was required to post notice and hold several public meetings to take a City Council vote to support each individual application. Altogether, the City team spent more than 500 hours to prepare, approve, and submit 52 applications on behalf of local businesses.

During this time, DCEO posted initial guidance and criteria, hosted a webinar to explain the program and answer questions, and revised their guidance and criteria more than once. Many applicants in Dixon had already done considerable work to apply for the grant when the rules changed mid-stream. I also contacted DCEO multiple times to try and streamline the application process so more small counties and cities could apply. After being told by DCEO that much of the red-tape was due to federal requirements, I worked through Congressman Adam Kinzinger’s office and contacted officials within the US Department of Housing and Urban Development who oversaw the grant program and got them to agree to waive certain requirements.

In Dixon alone, 52 small businesses chose to apply for a grant to help stabilize their businesses which were greatly impacted by COVID and the stay-at-home order. Many of these same applicants were also forced to wait more than 7 weeks to even be able to apply for unemployment insurance through the Pandemic Unemployment Assistance program. Some have still not received unemployment benefits. All through that time, after having been among the first to submit their thorough application for a Downstate Small Business Stabilization Grant, they waited to receive this emergency assistance from DCEO.

Now, more than two months after the stay-at-home order began, the City of Dixon was notified that just 4 of the 52 applications were approved by DCEO. Even though sole proprietors were originally said to be eligible, several Dixon applications were denied simply because “no employees.” Others were denied because they had “negative cash flow” in previous years — precisely the kind of business that you would think needs stabilization during a pandemic. Other businesses were denied because they had “insufficient length of business operation” — again, a fledgling local business would typically be exactly the kind of business you’d want to support when a statewide emergency strikes. Other businesses were denied for their entire grant request with a note that they received other assistance, despite the fact that DCEO guidance explicitly states that application for CARES or other assistance does not impact their ability to qualify for downstate stabilization grants.

Furthermore, many of these denial notes carry dates of late April or early May, meaning DCEO reviewed these applications more than a month ago and made small business owners wait in vain until June only to find out that the financial assistance they hoped for would not be coming.

Now, on June 5, the Pritzker administration has announced that just $1.3 million of the original $20 million has been awarded, and that only 65 businesses in the entire state will receive a grant.

I strongly urge the Department of Commerce and Economic Opportunity and the Pritzker administration to reconsider these grant applications and truly support small businesses in Dixon and throughout downstate Illinois.

posted by Rich Miller
Friday, Jun 5, 20 @ 11:44 am

Comments

Wait, I thought Republicans were against social support.

Comment by Abbey Friday, Jun 5, 20 @ 12:02 pm
No negative cash flow and no new businesses. Those are good rules to keep out the charlatans

Comment by All this Friday, Jun 5, 20 @ 12:08 pm
Demmer sure has his finger on the pulse of the pressing issues this week.

Also, sole proprieters are eligible for UI and PPP loans, so maybe some of these folks aren’t high on the priority list for these handouts, ahem, grants.

Comment by Excitable Boy Friday, Jun 5, 20 @ 12:10 pm
It should be noted as Mr. Demmer has this up on now Facebook, updating his concern.

While updating his own Facebook to his thoughts on this, Mr. Demmer has nothing on the current protests or thoughts to the George Floyd murder.

The Twitter has no mention of the protests as well.

Comment by Oswego Willy Friday, Jun 5, 20 @ 12:16 pm
- No negative cash flow and no new businesses. Those are good rules to keep out the charlatans -

No kidding. Anyone whose ever spoken to a CPA knows what that’s all about.

Comment by Excitable Boy Friday, Jun 5, 20 @ 12:19 pm
Another day, another op for republicans to use the pandemic to make political attacks…

Today, (month, date), republican (State rep/sen) (name) criticized Gov. Pritzker for (issue) saying that (insert constituency) cannot survive due to his (proposal, EO, action).

Oh, it’s getting so old.

Comment by Shytown Friday, Jun 5, 20 @ 12:20 pm
I’m sure that Demmer will stand arm in arm to support Fair Tax to help stabilize state finances so a small business effort can be considered.

Comment by Norseman Friday, Jun 5, 20 @ 12:22 pm
We are a small Mom and Pop business in a small town. The PPP program was geared toward businesses that had employees only, as did the above mentioned program. We did not qualify for any assistance. The PUA program has been of help, but doesn’t offset our losses. Most sole prop, shops were hit very hard, and may close, leaving main street Illinois decimated. We hope to remain in business, but the road ahead is difficult for us, and other small shops.

Comment by Retired Educator Friday, Jun 5, 20 @ 12:25 pm
Dear Tom- This is pathetic. The announcement is for $1.3 million of $20 million- lots of opportunity still available. Thanks for always pointing a finger but never lifting one.

Comment by White Dynamite Friday, Jun 5, 20 @ 12:32 pm
Sole proprietor doesn’t mean no employees.

===Others were denied because they had “negative cash flow” in previous years===

So the business isn’t profitable in previous years, however the state is expected to keep a business that isn’t profitable open?

Or alternatively the business is profitable but committing tax fraud?

Exactly what kind of handout does this guy expect?

Comment by Candy Dogood Friday, Jun 5, 20 @ 12:34 pm
People, 65 dispersals two months after the program was announced is, indeed, quite small. Take a breath.

Comment by Rich Miller Friday, Jun 5, 20 @ 12:42 pm
Pretty well-reasoned argument by Demmer. There was a lot of new money in the FY 21 budget, didn’t see much to help with small business relief, or anything to cut some of the red tape on existing programs targeted towards business as it relates to COVID-19.

Also, “not lifting a finger”?

“I also contacted DCEO multiple times to try and streamline the application process so more small counties and cities could apply. After being told by DCEO that much of the red-tape was due to federal requirements, I worked through Congressman Adam Kinzinger’s office and contacted officials within the US Department of Housing and Urban Development who oversaw the grant program and got them to agree to waive certain requirements.”

Comment by Phenomynous Friday, Jun 5, 20 @ 12:42 pm
===The PUA program has been of help, but doesn’t offset our losses.===

But did it replace your net income?

Comment by Candy Dogood Friday, Jun 5, 20 @ 12:43 pm
===65 dispersals two months after the program was announced is, indeed, quite small.===

Sounds like DCEO is going through applications that communities like Dixon helped small business owners submit when they should have been able to recognize the person/entity wasn’t qualified to begin with.

Comment by Candy Dogood Friday, Jun 5, 20 @ 12:45 pm
==People, 65 dispersals two months after the program was announced is, indeed, quite small. Take a breath.==

That’s fair. I think the issue people have is twofold:

1. Demmer has been a staunch opponent of government spending and assistance for people in need, so it’s a bit rich for him to call for more of it as soon as it affects his own community.

2. He’s been completely silent on the issue currently ravaging the country, so this feels technocratic and poorly timed, even if I absolutely agree on the merits; more money needs to go out ASAP.

I just wish Tom believed in the necessity of the government to disperse aid quickly in literally any other circumstance than “my town needs it”.

Comment by Pearly Friday, Jun 5, 20 @ 12:48 pm
Candy; when we have the losses due to paying everything out of pocket, the PUA money barely covered almost all. After paying rent insurance, utilities, etc, from our own money, we simply stay even, with no real income. It is the typical, rob Peter to pay Paul. No real gain either way.

Comment by Retired Educator Friday, Jun 5, 20 @ 1:35 pm
The Governor was the one heavily promoting this program 2 months ago as a way to ease the burden of his executive orders (using federal money, not state money btw). Then his administration made the application process more than a little difficult (not to mention his DCEO pushed the liability on to local governments). Now the comment section wants to call out Demmer for pointing out this program is lagging instead of maybe acknowledging there is a problem with the way this grant program was designed. Typical.

Comment by Shemp Friday, Jun 5, 20 @ 3:10 pm