Lawmakers hear testimony to preserve small-business assistance partnership funding

Representative Wayne Johnson asked the Workforce, Labor and Economic Development Finance and Policy Committee on March 27 to hold House File 19 65, a bill that would maintain the 2023 funding level for the Small Business Assistance Partnership program administered by the Department of Employment and Economic Development.

The measure would continue one-time funding for nonprofit economic development organizations and community development financial institutions that contract with DEED to provide free technical assistance to entrepreneurs. "One of the keys of successful business is the access to capital, but also access to the people who know how to help you with that capital," Representative Wayne Johnson said, arguing that advisors can make the difference between a business succeeding or failing.

Why it matters: Small businesses employ nearly half the state’s workforce and provide local economic activity, lawmakers and witnesses said. Maintaining the grant-level funding, sponsors argue, preserves a competitive distribution model that reaches both Greater Minnesota and metro regions and requires grantees to report metrics to DEED.

Michelle Morozki, interim executive director and business development manager for Kandiyohi County Economic Development, told the committee the program supports the Elevate Community Business Academy and other local partnerships. "Since 2021 Elevate CBA has helped over 100 Kandiyohi County entrepreneurs graduate from a 12-week business development course leading to more than 35 new small businesses in Kandiyohi County," Morozki said, and asked the committee to maintain funding at the 2023 level with a $7.4 million one-time investment.

Meredith Chagania, owner of Patients and Bubbles Childcare, described using the program’s technical assistance to open a childcare center that serves infants, toddlers and preschoolers including children with developmental disabilities. "The resources from the Small Business Assistance Partnership program helped me grow my business, to build wealth for me and my family," Chagania told the committee.

Lee Hall, founder and CEO of Next Stage, and a representative of the Economic Development Association of Minnesota’s government relations committee, said steady funding preserves newly built provider capacity and helps ensure organizations that serve underserved communities do not disappear with a funding drop.

The committee took testimony and held the bill for further consideration. No formal substantive amendments or final funding decisions were made in this hearing.

Committee context: Chair Baker noted the agenda was full and that this item was moved up to accommodate testifiers. The committee limited public testimony to about two to two-and-a-half minutes per witness because multiple bills were scheduled for the hearing.

What’s next: House File 19 65 was held over for future consideration; proponents urged lawmakers to include funding in the committee’s budget work to preserve the program’s statewide reach.