[Posted Jan. 30, 2008]

Bill Would Kill Agency’s
Aid To Small, Minority Firms

Leonard E. Colvin
Chief Reporter
New Journal & Guide
 
       A bill has been introduced in the Virginia House of Delegates which calls for the abolition of the Virginia Department of Business Assistance (VDBA).
       If passed, House Bill 1522 would require the duties of the VDBA be taken over by the Virginia Economic Development Partnership (VEDP).
       But supporters of VDBA and its current Executive Director Louisa Strayhorn of Virginia Beach, say that dismantling the agency would be a blow to the state’s effort to develop and support small and minority businesses in the Commonwealth.

Executive Director of the Virginia Department of Business Assistance Louisa Strayhorn.

       The Virginia Department of  Business Assistance is tasked with educating business people on how to start up,  sustain and grow their businesses. It also provides  financial assistance with direct and guaranteed loans, and aids minority and women-owned business with securing contracts through the state’s  $6 billion dollar procurement process, said Strayhorn, who was appointed by Gov. Tim Kaine to lead the 12-year-old agency.
     On the other hand, VEDP is designed to recruit business to the state and  develop means of  getting them settled.  Merging VDBA into VEDP would hurt and dilute its mission, according to Strayhorn, who is a former member of the Virginia Beach City Council.
She said her agency has begun only recently to bolster its position among those state agencies assigned to help companies owned by women and African Americans.  
       During each legislative session there is an effort to abolish, merge or weapon some agency designed to assist these businesses.  But each year, even when  the Republicans controlled both houses of the General Assembly, efforts were beaten back. This year is no exception.
       House Bill 1522 was submitted to the House for consideration on Jan. 18 by freshman Republican Delegate James P. “Jimmie”  Massie of Henrico County.
       Early last week Strayhorn said she tracked Del. Massie down to question him about his rationale for proposing the measure.
       “He said it was all about efficiency,” she said.

    “He and other supporters of the measure believe that it would save the state money if they abolished the agency and then insert its role into another agency. I don’t think  this is practical.”
       The bill is now in the hands of the House Committee on General Laws, which Massie sits on.  Two of the strongest supporters of the proposed legislation are from Hampton Roads:   Del. Terri Suit, a Republican  of the 81st District, which is part of Chesapeake and Virginia Beach; and  Del. Johnny S. Joannou, a Democrat, of the 79th District who represents parts of Norfolk, Chesapeake, and Portsmouth.
       Strayhorn has launched an offensive to lobby for killing House Bill 1522. She said that if it does pass in the  Republican controlled House, it may not fare well in the Senate which is controlled by the Democrats.  

       Part of her offensive strategy is to detail to legislators and to the public what VDBA has done since its inception in 1996
       Strayhorn says that 98 percent of the companies which create jobs in Virginia are small businesses, with less than $10 million in gross revenue and 250 employees or less. Half of the state’s $160 billion in tax revenue in any given year, Strayhorn says, is generated by small and minority businesses.
       Hampton Roads and Northern Virginia have the highest rate of small businesses created in the Commonwealth, Strayhorn says.  She said an increasing number of women and African American-owned firms are in this category.
       Twenty nine percent of the state’s small businesses are owned by women, 8 percent by  African Americans and 4 percent by Hispanics, records show.
       Delceno Miles, the CEO of Miles Agency, a niche marketing and public relations firm in Virginia Beach, said VBDA has done a much better job of nurturing and assisting small and minority businesses in  recent years because  it has had an infusion of more resources and the leadership of its executive director.
       “She has made it work and done a better job. She is now trying to work to save it from being closed,” said Miles. “I think she has done a great job of revamping that agency and making it effective in helping minority and female headed businesses gain access to  that $6 billion in contracts from the  state in a year.  I think  it is an injustice for VBDA and the other agencies devoted to helping small and minority-owned businesses to always be fighting to keep their doors open. Here we go again.”
Miles said she uses VBDA’s professional training programs and has used a forum sponsored by the agency and the Office of Minority Enterprise in Virginia Beach to network and gain access to procurement opportunities.
       Terri Garrett, who runs Capital Management, a management consulting firm in Leesburg, says he has used VBDA to expand the 20-year-old business and access local, state and federal contracts.
       “That bill is not good for the Commonwealth of Virginia,” said Garrett.  “I do not know of any agency that provides the support and access as the VBDA.  The state’s tax base and economic engine are run on small business. This bill can only hurt.”
       Both Garrett and Miles mentioned Gov. Tim Kaine's Executive Order 33.  In August of 2006 Kaine issued the order based on a study which said that Virginia was at the bottom in minority procurement among states.  Executive Order 33 sets a goal that 40 percent of its procurement purchases should be made from small and minority owned businesses.
       Strayhorn says this edict bolstered her agency’s effort in 2007 toward improving procurement opportunities among small, minority and female-owned firms.
       “We are just beginning to scratch the surface on this procurement effort and someone wants to pull the rug from under an effort to level the playing field,” said  Wesley Jones, Chief Operating Officer of Program Management Company in Hampton, which he has operated for nine years. “VBDA  has been a true advocate and support system for small businesses like mine.  It has really been making an effort  to help us stay afloat.”
       VDBA, Strayhorn said, enabled $247 million in financing, primarily for small business.  Twenty eight percent of the 201 loans the agency has made since 2006 have gone to women and minority-owned small businesses, and supported some 255 small firms that train workers to fill some 1,800 new jobs most of which were female and minority-owned.
       It costs the state about $13 million to run the VDBA, according to Strayhorn, and much of that money is distributed around the state to pay for educational workshops, workforce training programs, start-up entrepreneurial assistance, and Small Business Administration loan guarantees to banks for businesses. It has also helped minority and female-owned firms obtain certification which can lead to participation in the state’s procurement programs.
       “We have increased the number of companies who have been seeking our services and access to the opportunities we can assist them in accessing,” said Strayhorn. “There are hundreds more which need our help. Now we see what we have secured threatened. I am going to make sure that we can continue operating under our current mission. It is just that vital.”
       Strayhorn said that she is asking businesses which have used VDBA services,and voters in general, to send a message to the members of the General Laws Committee and their individual members in the House to voice support.

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