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Small businesses say they're bearing the brunt of recovery cost

TAMPA — Each of the 10 small business owners surrounding Florida Chief Financial Officer Alex Sink had a beef with the state's plan to help them emerge from the Great Recession.

Not enough is being done to market Florida or the Tampa Bay "brand."

Banks and their regulators are still too stingy with loans.

The state should drop a plan to give small companies tax credits for creating jobs and put that money into training grants instead.

For Jennifer Bakunas, president of Web design and development firm Magnetic, the issue was why — in an era of bank bailouts — small businesses are shouldering the brunt of the costs of recovery in the form of higher unemployment taxes and health care costs.

"It's a very big load for a small business to carry when you're basically in survival mode," Bakunas said.

A report released Thursday by private company consultant Sageworks bolstered her argument. The report found small business sales were down 6 percent, with payrolls and advertising budgets falling.

Sink, Florida's chief financial officer and Democratic candidate for governor, had organized the Thursday morning roundtable in part to see if there are any signs the credit freeze is thawing.

The Small Business Administration temporarily is guaranteeing up to 90 percent of some loans to spur bank lending. Sink, who ran Bank of America's Florida operation before launching her political career, said more needs to be done.

Federal Deposit Insurance Corp. chairwoman Sheila Bair has pledged support for easing the lending requirements, Sink said, but that directive apparently hasn't filtered down to risk-averse bank examiners.

Sink's message to the regulators and the banks: "Give Florida a break. Look at credit a little bit differently right now. … It's not fair to ding us … for holding on by our teeth."

Jeffrey Mount, owner of Wright's Gourmet House, said he has found credit is available, just not at the level he had hoped.

He recently sought $800,000 for a renovation, but his longtime bank was willing to lend only $200,000. "I can do the renovation, but have to do it over several years," Mount said.

Some of the fixes urged are already under way. For one, the Legislature is expected to delay plans to drastically hike unemployment taxes. (The tax on businesses, based partly on the number of employees, is funneled into the now-bankrupt state fund used to pay unemployment benefits. By forestalling higher taxes, the state will have to borrow more through a federal line of credit to keep the program afloat.)

Some of the problems cited were tougher to tackle.

Holly Tomlin of the temps agency Tomlin Tested Staffing gave one troubling anecdote highlighting a "system" shortcoming.

In attempting to place an unemployed worker in a short-term assignment recently, the would-be worker turned her down. "I can't take that right now," Tomlin said she was told. "It's going to interrupt my unemployment benefits."

Jeff Harrington can be reached at jharrington@sptimes.com or (727) 893-8242. Follow him on Twitter at twitter.com/jeffmharrington.

Small businesses say they're bearing the brunt of recovery cost 02/18/10 [Last modified: Thursday, February 18, 2010 9:45pm]
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