The Act funds organizations to provide business loans, training and business assistance to self-employed Nebraskans and businesses with up to five employees.  It's been funded at $1.5 million per year since 2007, when the Legislature recognized the need to invest in small business development. That is less than one dollar for each and every Nebraskan.  

However, at a time when job creation and economic growth are critical, the Governor is headed in the wrong direction by recommending a two-thirds cut in its funding. That cut is disproportionate to rest of a generally flat budget, and it is reflected in the Legislature's preliminary budget. In this time of economic contraction, it is precisely the wrong time to slash our investment in the one state initiative that develops small businesses and creates jobs.   

Microenterprise development is a proven job creator, even during economic downturns. During our last recessionary period, from 2000-2003, employment in Nebraska attributable to microenterprises grew by nearly five percent while all other private, non-farm employment fell by nearly one percent.   

A recent report from the Center for Rural Affairs finds the economic potential of the state’s investment in the Microenterprise Development Act. The current $1.5 million funding would create over 300 jobs in one year and up to nearly $11 million in economic outcomes (increased owner and employee incomes and assets). Over five years that same $1.5 million would create $41 million in economic outcomes. For every dollar the state invests in microenterprise development, it would gain $28 in economic growth plus additional state and local revenue. For less than one dollar for each and every Nebraskan, we all gain jobs, businesses, and economic growth in our rural communities and urban neighborhoods.   

And all these results are a bargain for Nebraska’s taxpayers. The jobs created or retained by the services and loans provided under the Microenterprise Development Act cost $98 per job, significantly lower than almost any other economic development initiative or strategy.   

The importance of self-employment and small business development in Nebraska can also be demonstrated by recent findings of Randy Cantrell of the University of Nebraska’s Rural Initiative. Dr. Cantrell has found that up to 30 percent of jobs in the state’s rural counties are now due to self-employment, accounting for virtually all job growth in those counties. These results are interpreted by Dr. Cantrell and others as showing the rising popularity of self-employment.   

These figures are not surprising. Nebraska’s economy has always been built on entrepreneurship and Nebraska has long been a national leader in small business and microenterprise development. These figures and the increasing popularity of self-employment do demonstrate the need for a significant investment in the Microenterprise Development Act in the budget now being developed by the Legislature. As more Nebraskans and Nebraska families struggle economically, more and more will seek services and resources that allow them to start a business to support themselves and their families or to supplement their income. If job growth in large parts of the state is almost exclusively attributable to self-employment we must invest in resources and services that develop more such opportunities, strengthen current businesses and expand current businesses to create jobs.   

Understandably, the challenges facing the Legislature and the Governor are daunting as they work to create a new state budget. But we cannot allow short-term challenges to defeat the need for long-term investments. Initiatives such as the Microenterprise Development Act help nurture the entrepreneurial dreams of individuals and families across the state. These dreams are the heart of the American Dream – taking the risk to be one’s own boss, developing a new product, providing a needed service, building something for yourself and your family, being a part of the economy of your community or neighborhood.   

For the long-term economic health of Nebraska and Nebraska families, to allow entrepreneurial dreams to flourish across Nebraska, and to enhance job opportunities in a tough economy the Legislature and the Governor must invest in tried and true strategies such as the Microenterprise Development Act. To retreat from such cost-effective investments ignores what is best about Nebraska and Nebraskans.