Funds sought to start small businesses

A southeastern Utah organization believes low-income people can start successful small businesses and wants additional funds to validate that concept.

Karl Kraync, chairman of the policy committee for the Southeastern Utah Small Business Development Fund, told the Legislature's Workforce Services and Community and Economic Development Interim Committee on Wednesday that a $2 million appropriation would grow a pilot program throughout eastern Utah.

"We believe that small businesses are the answer for economic problems and a lack of employment for people with disabilities and low income," Kraync said.

The first phase of the pilot project was funded by a $500,000 Temporary Assistance to Needy Families grant that was bumped up to $865,000 through the Department of Workforce Services' Eastern Regional Advisory Council.

The first business was funded in 2001. Participants had to be eligible for TANF funds, meaning their income was no more than twice the poverty level and they had at least one dependent child.

About $690,000 went directly to aid the establishment of 79 small businesses that generated 192 jobs. Sixty-six businesses remain, with 136 employees, Kraync said. Forty-seven are in an expansion mode.

Gross sales of the 66 businesses totaled $3.2 million last year, with median sales of $15,000.

One success story is an Emery County theater that went from a "dilapidated, rundown" facility to a "premier small movie theater," complete with a game room and cafe, he said.

"Essentially what this proposal did was it turned some folks who were TANF-eligible families into not only taxpaying citizens and employed citizens, but employers," said Rep. Brad King, D-Price.

The southeastern Utah program has been so successful that Vermont officials have visited Utah in an attempt to replicate it.

"This could be done anywhere from Coalville to Beaver and be successful," Kraync said.

The $2 million appropriation would expand the program into eastern Utah for two years, allowing the organization to get additional statistics to validate the initial success and perhaps serve as a springboard for even further growth throughout rural Utah. The second phase would drop the dependent-child requirement for eligibility.

The interim committee took no action on the matter Wednesday.

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E-mail: bwallace@desnews.com