New bill to help small businesses

A bill co-sponsored by Sen. Evan Bayh could help keep small businesses in Indiana, said Meg Keck, press secretary for the Indiana lawmaker. But state officials are still worried the money won't make it home in time.\nThe Reed-Bayh amendment, which passed last week, would restore $21.8 million to the Manufacturing Extension Partnership, a nonprofit agency that offers advice and resources to small businesses across the country.\n"MEP works as a resource for small businesses that don't have the means of hiring a consultant," Keck said. "This is a program that enjoys bipartisan support."\nThe money, which still must be distributed to local state affiliates by the Secretary of the Department of Commerce, would help maintain a long tradition of state-funded small business aid, said Dave Maxell of the MEP affiliate Indiana Business Modernization and Technology Corporation.\nIndiana began a similar consulting program funded by the state legislature during the '80s in an attempt to stave off a spate of failed businesses and manufacturing failures.\n"Indiana was becoming known as part of the rustbelt," Maxwell said. "Businesses were packing up and moving out."\nBut BMT, as it was later named when it received federal funding, has helped many small businesses revive their productivity and stay competitive, Maxwell said.\nIn fact, Synovate, an independent market research firm based in Chicago, has estimated BMT programs have saved 1,300 Hoosier jobs.\nBMT's budget, which comes from a combination of federal aid and payment for services, has hovered around the $5 million mark since the late '90s, but the 2004 federal budget cut its subsidy by more than 60 percent.\nMaxwell said the federal cut was particularly hard for Indiana.\nIn 2003 BMT received $2.5 million from the federal government. In 2004 the subsidy dropped to $670,000.\nMaxwell said his Indiana agency was expecting to receive around $2 million, and the 60 percent cut forced BMT to decrease its operations across the state.\nIt closed four satellite offices and downsized its staff from 44 consultants to 27.\nAnd while Bayh's amendment may bring more money to Indiana, Maxwell said it's not clear when the cash will reach BMT's office, nor how much it would be.\nThat's a problem because BMT is already on its 2004 budget, while other state affiliates are still using money from 2003. \nThat means Indiana may be left out of the loop, Maxwell said.\n"We're in limbo," he said. "We may not have any money at all come October 1."\nThe potential shortage could have some effect on local economies, Maxwell said, since BMT's services help so many small businesses.\nSeventy-five percent of the companies in Indiana have less than 50 employees, are privately owned and, some struggle to remain competitive, Maxwell said.\n"Many don't survive into the second generation, and even fewer into the third generation," he said.\nKeck said that's why the senator wants to do something to help BMT and its national analogue.\n"Small manufacturers play a vital role in Indiana's economy," Bayh said in a press release. "At a time when Indiana is facing thousands of lost jobs, it makes no sense to strip the funding away from the very programs that help Hoosier manufacturers grow and compete."\n-- Contact staff writer Seraphim Danckaert at region@idsnews.com .