Jersey’s Minority Business - Proposed budget cuts could undermine contracts
Earlier this year, thousands of minority and women-owned business enterprises lauded New Jersey Gov. Jon Corzine’s re-vamped initiative to increase the number of MWBEs that do business with the Garden State. However, recently announced budget cuts and a sour economy have left many of those business- owners wondering if their businesses will survive the tenuous times.
Late last year, Gov. Corzine authorized the transfer of the recently established Division of Minority and Women Business Development from the Office of Economic Growth to the Department of Treasury, paving the way for regulators to closely monitor state agencies’ compliance with MWBE goals. Nina Moseley, former senior director of business services for the New Jersey Commerce Commission and a longtime state employee, was tapped to head the division, becoming the second person to sit at the helm of the division in just over a year. The move was expected to dramatically increase the number of state contracts awarded to MWBEs. At the time, Moseley said she was committed to supplier diversity in state government and that small businesses would be awarded a “fair share” of state contracts.
“The underlying task is to support and encourage the development of New Jersey’s small business, especially [MWBEs],” she said. Plans were put in place to establish an office of supplier diversity.
But in January, during his state-of-the-state address in Trenton, Corzine unveiled a budget proposal that included substantial cuts in hundreds of state services and programs. Also proposed were sizable increases in toll fees on some the state’s major highways as a plausible solution to reduce New Jersey’s massive and growing $32 billion debt. “We have got to get out the habit of allowing people to promise something without having the responsibility to pay for it,” Corzine said.
Some believe Corzine’s most recent statements renounce comments made late last year regarding the strategic alliance of the Division of Minority and Women and the Department of Treasury. Despite the strong rhetoric and strategies by state officials to bring more minority business owners into lucrative state procurement contracts, MWBE advocates say, the massive budget cuts and faltering economy will undercut those efforts. “It’s already [widely] acknowledged that minority-owned businesses receive a small piece of he economic pie. With the proposed cuts, the slice will become even smaller,” says Linda Ireland, president of the New York/New Jersey Minority Purchasing Council.
According to New Jersey’s most current figures, as of 2006, only 2 percent of the estimated $2 billion in state procurement contract dollars are awarded annually to MWBEs. “It’s been nearly two years since a specific plan was implemented to bring more diverse suppliers in to do business with the state and things still have not changed,” says John Harmon, president of the Metropolitan Trenton African American Chamber of Commerce. “How long does it take before we actually see noticeable growth in the number of MWBEs getting state contracts?”
In September 2006, Corzine issued an executive order establishing the Division of Minority and Women Business Development and promised to establish and monitor a goals-based program for MWBEs to secure state contracts. Since that time, the division has undergone various changes but has made little progress in increasing the number of contracts MWBEs procure. Harmon says minority and women-owned firms account for 20 percent to 30 percent of all small businesses in New Jersey, but the number of contracts that theses businesses receive continues to be miniscule.
“With the budget cuts looming, it’s doubtful the numbers of minority-owned businesses doing regular business with the state will dramatically increase,” he says. New Jersey lawmakers have until June 30 to ratify Gov. Corzine’s proposed budget for the 2009 fiscal year.
By Glenn Townes