Dawidziak: Small business can lead the way

It's unanimous! (Or as close to unanimous as it gets in today's contentious political environment.) From the Democratic president to the Republican-controlled House of Representatives to elected officials and economists, the broad consensus seems to be that the future state of the union is dependent on job creation. And job creation is dependent on private-sector small businesses.

So why do we continue to handicap them?

All the stimulus money the government spent has left many small business owners asking, "Where's my bailout?"

There are many smart people in authority who make the case that the bailouts of the banks, Wall Street firms and car manufacturers were necessary for America's long-term fiscal survival. While this may be true, they still set a very bad precedent.

It would be naiveté in the extreme not to acknowledge that rich and powerful interests enjoy special treatment in this country. The difference is that for the first time in America, we put "too big to fail" on repeat mode. We said that some companies are more equal than others, and some interests are more important than others. We said Wall Street is more important than Main Street - or at least that Wall Street's butt deserved to be saved with Main Street's money.

All of this might have been fine, except the result wasn't just that small businesses weren't helped by this process, they were actually hurt. Most smaller companies saw their credit lines slashed by the very financial institutions they - through their tax money - were helping to bail out. As President Barack Obama said last year, "Even though banks on Wall Street are lending again, they're lending to bigger businesses, not small ones."

This was a disastrous double whammy for these companies and the economy as a whole. Many small businesses rely on revolving lines of credit to meet normal overhead items like payroll. Additionally, many of these companies are in service industries, and their clients are other small companies. And since their clients got their credit lines slashed as well, business dried up.

Since the beginning of the economic meltdown, officials from both sides of the aisle have paid reverent lip-service to the plight of small business, but they've offered scant resources to back it up. The Small Business Lending Fund launched by the Treasury Department last month is widely considered too restrictive and complicated to do much good. Bold leadership is required now if we are to realize true economic expansion.

There's an old joke - popularized by Ronald Reagan - that goes, "I'm from the government and I'm here to help." Most small business owners these days aren't laughing. Ask your local shop owner or company president what they'd like government to do for them and their answer is almost always the same: "Don't add another tax or another layer of red tape," they say. "Get out of our way, and let us do what we do and create jobs."

This is particularly relevant here on Long Island, where nine out of 10 companies employ fewer than 20 people, and property taxes are sky high.

Any Long Island homeowners who think small business development has nothing to do with them should realize that there are two pockets local governments can pick: They can expand the corporate tax base or raise residential property taxes. Every time governments say "no" to business - whether through inattention or harmful policies - and fail to expand the corporate tax base, they are saying "yes" to residential property tax increases.

If we're going to create jobs and find new revenue sources to reduce the residential tax burden and economic pressure, then we need to start backing up our fine rhetoric with real measures that will help small businesses grow.