SBA budget winners and losers
$119.5M for contracting, $168M for entrepreneurial aid;
Hikes for WOSBs; deep cuts for SBDCs, WBCs, SCORE
President Trump is seeking $739 million in net budget authority for the Small Business Administration in fiscal 2021, an amount that reflects major cuts in entrepreneurial development program funding and small increases for small business government contracting programs.
Entrepreneurial Development
The most drastic cuts being proposed are to entrepreneurial programs, which include Small Business Development Centers (SBDCs), veterans outreach and Women’s Business Centers. They all offer advice and workshops to small business owners, including startups.
Entrepreneurial programs would drop from $261 million in the fiscal 2020 enacted budget, to $168 million in fiscal 2021, a 36% reduction, according to the SBA’s FY2021 Congressional Justification. The document provided no explanation for the cuts.
The SBDC program budget, which currently covers 63 centers and 900 other locations, would fall to $88 million, down from $135 million last year, a 35% reduction.
Money for Women’s Business Centers would decrease by 23% to $17.4 million, down from $22.5 million.
Veterans outreach would fall to $12.8 million, from $14 million. That is an 8% cut.
Other entrepreneurial support programs also would see drastic reductions from the fiscal 2020 enacted budget, including:
- Microloan Technical Assistance, from $34.5 million, down to $25 million, a 28% reduction;
- STEP, reduced to $8 million, from $19 million, a 58% cut;
- SCORE, reduced to $8 million, from $11.7 million, a 32% cut;
- PRIME, from $5.5 million to zero;
- Regional Innovation Centers, from $5.5 million to zero;
- 7(j) Technical Assistance, from $2.8 million to $500,000, an 82% cut; and
- Native American Outreach, from $2 million last year, to be reduced to $1.5 million, a 25% cut.
Sen. Ben Cardin, D-MD, ranking Democrat on the Senate Small Business and Entrepreneurship Committee, urged his colleagues to reject slashing the small business counseling and technical assistance budget.
This budget is “bad for business,” Cardin said in a statement. “As we did last year, I call on Congress to once again reject these harmful cuts.”
Rep. Nydia Velazquez, D-NY, chair of the House Small Business Committee, was critical of the proposed cuts to SBDCs, Women’s Business Centers, SCORE and other entrepreneurship programs. She called the reductions a “clear disinvestment in the hardworking small business men and women across America.”
Government Contracting Programs
Trump’s proposed budget generally gives small bumps to the SBA’s government contracting programs, with the exception of the Womens Business Program, which is slated to rise to $5.3 million, up from $3.8 million, a 39% increase. The SBA is scheduled to stand up a new certification program for women-owned small businesses this year.
The total proposed budget for government contracting programs is $119.5 million for fiscal 2021, up from $114.7 enacted in fiscal 2020. That represents a 4.2% increase.
Other programs funded in this category include:
- 8(a) Business Development would receive $68 million, up from $65 million, which is a 4.6% increase;
- Prime Contracting Assistance would rise to $24.9 million, from $23.6 million, which is a 5.5% increase;
- The HUBZone program would get $12 million, up from $11.8 million. That is a 1.7% increase;
- The Subcontracting program would be hiked to $4.9 million, from $4.7 million, which is a 4.3% rise; and
The All Small Mentor-Protege Program would get a 4.8% funding increase to $2.2 million, up from $2.1 million.
Overview of SBA proposed budget
Overall, the Trump Administration is asking for net budget authority of $739 billion for the SBA in fiscal 2021. That includes business loan funding, and offsets from loan collections but not small business Stafford Act disaster aid funding.
Velazquez also objected to the $305 million proposed cut to rural broadband programs and the zeroing out of funds for the Manufacturing Extension Partnership.
More information:
SBA Congressional Justification:
https://bit.ly/2HbHSz9
