SSTI Digest

In general, the effect of the pandemic on states’ budgets due to the wave of business, retail, and commerce shutdowns, as well as other reduced economic activity across the nation, is not entirely known, or too early to forecast; however, a number of states are beginning to experience the initial impacts of a substantial downturn. With several states having already enacted their 2020-21 budgets, special sessions are expected later this year to deal with declining revenues. Others ended sessions early without a new fiscal year spending plan in place. Many are also acting quickly to help mitigate the effects of lost revenues and an increased demand for services. Some of the states’ impacts and actions are outlined below. Alaska officials report that the drop in global oil prices will likely add $300 million to the state's current year (2020) budget deficit. The Alaska Journal of Commerce reports the state Legislative Finance Division told lawmakers that the state could experience a $600 million revenue reduction in the 2021 fiscal year, which starts July 1. In Arkansas, lawmakers were called into special session to address an estimated $353 million hit to the state’s…

With congressional apportionment along with federal funds, grants and support to states, counties and communities on the line, the U.S. Census count is vital to every community. But the 2020 decennial count has hit another roadblock with lagging participation and a delay in outreach efforts. Due to national social distancing guidelines and some states’ stay-at-home orders prompted by the COVID-19 outbreak, “Census Day,” originally scheduled for April 1, was recently postponed until at least April 15. The U.S. Census Bureau uses the day to kick-off in-person counting and outreach efforts, a huge component of the 2020 count.

Leveraging new data from the Census Bureau, the Kauffman Foundation recently released the second part of its new Indicators of Entrepreneurship series. This report focuses on the foundation’s New Employer Business indicators — a subset of the Early-State Entrepreneurship indicators provided in Kauffman’s first report of the series in September 2019 — meant to illuminate trends in the emergence of new businesses with employees and the time it takes for these companies to make their first payroll. The series replaces the Kauffman Index of Entrepreneurship series.

The U.S. Department of Agriculture announced it is seeking comments and suggestions on objectives and opportunities leading to research goals and informed product goals to facilitate transformative breakthroughs that would help the department increase agricultural production by 40 percent by 2050 while cutting the environmental footprint of U.S. agriculture in half. The effort is part of the department’s Innovation Agenda and includes four innovation clusters that have potential for transformative innovation: genome design; digital/automation; prescriptive intervention; and, systems based farm management. Comments are due by Aug. 1 and the full RFI can be found here.

With the unprecedented devastation being caused by COVID-19, SSTI has assembled a resource page for organizations, small businesses, universities and others. The page contains links to federal, state, and other programs providing guidance on the both the latest stimulus package and other sources of aid. We will also be updating and reorganizing this list, and we encourage you to reach out to us at contactus@ssti.org if you know of a program or resource that should be included here or have suggestions to improve usability. Access the resource page here.

The fallout from COVID-19 is growing as unemployment numbers skyrocket, small businesses are faced with closures, and employers try to protect both their business and employees. A just-released national study conducted by America’s Small Business Development Centers (SBDC) and Thryv Inc.,  found that 69 percent of U.S. small businesses have already experienced a large drop in demand due to the coronavirus pandemic and 60 percent believe demand will continue to decline. States, too, have seen their budget situations take a dramatic turn and universities have had to send students home. Below you will find some of the resources available to businesses and universities in dealing with COVID-19 pressures, as well as new funding opportunities from federal agencies for those seeking assistance. For more information on how states are responding, several organizations are posting daily updates and are referenced below.  The resources listed are divided into help for small businesses, updates on states' reactions, and federal resources. Please click through on the read more link for a brief synopsis of each resource followed by more information below the bulleted list. 

The third package of emergency assistance related to COVID-19 is currently making its way through Congress, having passed the Senate last night and being expected to pass the House tomorrow. The legislation includes additional emergency loans and tax credits for retaining employees, as well as near-term aid for individuals, small businesses, and some of the most affected industries. While relatively little assistance is directly relevant to science- and innovation-related business development, many broader small business provisions can still be of assistance to these companies. At a high level, the following sections of the third coronavirus relief package are most likely to be relevant to the TBED field: Tax credits of up to $5,000 per worker for businesses meeting certain size and employee retention requirements — note that companies cannot use both the credits and emergency SBA 7(a) loans; SBA is receiving more funding for emergency small business loans — qualifying SBA loans may now include deferral of payment for one year — and 501(c)(3) nonprofits are eligible for these loans (more details on SBA loans); EDA is receiving $1.5 billion for their economic…

Just days after the first reported US death from COVID-19, federal grant recipients capable of performing essential research and services related to COVID-19 were provided with additional flexibilities to the terms of their contracts and supplied with additional administrative resources to pivot their efforts towards combatting the virus. As the coronavirus pandemic continues to grow and disrupt all sectors of the economy, the Office of Management and Budget (OMB) has now issued guidance to the heads of all federal grant-making agencies, offering short-term emergency flexibilities and administrative relief. Some of the measures provided by OMB include: Providing flexibility on application deadlines; Allowing agencies to issue short-term Notices of Funding Opportunities (NOFOs); Extending awards for projects expiring within 2020 without additional costs for up to 12 months; Allowing awardees to continue charging salaries and benefits; Extending financial, performance, and other reporting deadlines; Allowing grantees to continue using currently approved indirect cost rates; and more. Although OMB is authorized to provide such relief, agency leaders are…

While the income benefits of a college education receive frequent attention, a recent article from the Federal Reserve Bank of St. Louis highlights the importance of a college degree for wealth accumulation. The average wealth for a college-educated household has tripled since the 1970s, while wealth for households without degrees have remained stagnant. These divergent trends in economic well-being are further evidence of the growing inequality among Americans, and the rising importance of education to staying ahead of this divide. The authors compare wealth between households whose head holds a college degree (college households) and households whose head does not hold a college degree (noncollege households). Between 1971 and 2016, the wealth of college households tripled. Gains were particularly robust for households with two college-educated spouses. Over the same time period, noncollege households saw an increase of about 25 percent in their wealth, or about one-twelfth the gain of college households. This wealth gap between households is far outpacing the income gap between college and noncollege households, which is also growing. In 1971, income…

A report released last fall on the financial stability of U.S. small businesses in 25 metros has been given new context as attempts to slow the coronavirus pandemic have brought a majority of in-person commerce to a halt across communities, the country, and the globe. The JP Morgan Chase report found that 29 percent of small businesses were unprofitable and 47 percent had less than two weeks of liquidity. The situation was worse — often twice as much — in communities with lower-than-average home values, college graduates, or majority minority populations. The likelihood of a business having reserves varied by sector. Restaurants had the lowest median profitability (9 percent), followed by retail (11 percent). High-tech services companies (29 percent) and health care services (26 percent) were the most profitable. Of course, even sectors with an average cushion of more than two weeks may be tested by what promises to be a longer series of interventions. These findings shed light on current and future economic emergency actions for governments to consider. The low cash reserves of many small businesses suggest that even subsidized loans may be difficult for low-…

The White House has reached out to the National Association of Manufacturers to seek volunteers who can donate and provide and/or produce within two weeks large-scale quantities of critical supplies to help the nation respond to the COVID-19 pandemic. Those that may have the ability to produce needed supplies are urged to respond to the survey found here.

Postposed primary elections, shuttered schools, sheltering in place orders and millions of workers shifting to home offices while others are displaced completely — the COVID-19 pandemic is radically altering the way of life for the country. States, too, are scrambling to respond to the pandemic while dealing with ongoing legislative sessions and budget negotiations. Some of those responses are detailed here. A number of states have already suspended their sessions including: Colorado, Connecticut, Delaware, Georgia, Hawaii, Illinois, Iowa, Kentucky, Louisiana (expected to last until March 31 at the earliest), Maine, Mississippi (until at least April 1 and possibly longer), Nebraska, New Hampshire, Rhode Island, and Vermont. Arizona, Idaho, Kansas, Maryland, and New York are hoping to wrap up their sessions this week and expect to have passed an FY 2021 budget upon doing so. Alabama lawmakers are currently on a scheduled spring break until March 31. It is unknown whether lawmakers will remain on break after that. Since the state's fiscal year doesn't end until September, there is no rush to advance or pass a state budget before then. Arizona…