While States Spend on Big Businesses, Small Businesses Get Chump Change


In an era of declining entrepreneurship nationally, you’d think state governments would want to do everything they can to encourage small businesses to thrive. After all, the nation’s estimated 28 million small businesses account for 99.7 percent of all businesses in the United States.

Instead though, the money that states spend on economic development overwhelmingly goes to large corporations. That’s the news from a report released Thursday by Good Jobs First, a national organization that advocates for government accountability in economic development.

The report, funded by the Kauffman Foundation, took a deep dive into state allocation of funds for economic development in Florida, Missouri, and New Mexico. It found that nearly 70 percent of development spending goes to big businesses in those states, while small businesses receive a scant 19 percent. An additional 13 percent of state funding goes to businesses of any size. That means the odds are significantly stacked against small businesses for economic development funds or tax credits for things like research and development or job creation.