Excluding Disadvantaged Businesses

Category: Print Issues

Edward W. De Barbieri

Volume 28

, Issue 3

28 GEO. MASON L. REV. 901 (2021)

Introduction

In March 2020, the Small Business Administration implemented the Paycheck Protection Program to support small businesses and their workers during pandemic shutdowns.¹ Much publicity about this forgivable loan program stemmed from funds flowing to larger and less deserving companies that had other avenues for capital access.² A less-publicized aspect of the program was that the federal agency conducting the program excluded business owners with certain criminal histories from receiving funds.³ Such an exclusion was more likely to impact Black and Latinx business owners,⁴ who were particularly hard-hit during the early months of the coronavirus pandemic.⁵ Excluding small business owners from accessing federal small business funding is not a new phenomenon.⁶ The Small Business Administration’s 7(a) lending program, which was expanded through the Paycheck Protection Program, already restricts owners with criminal histories.⁷ In addition, federal, state, and local preferential procurement programs exclude women- and minority-owned businesses from market participation because of significant certification costs.⁸ Finally, states exclude owners from accessing licenses in certain expanding industries, such as recreational cannabis, unless they are already established with a license to produce and dispense medical marijuana.⁹ These exclusions and restrictions create or contribute to the creation of groups of “disadvantaged” businesses. This Article discusses what disadvantaged businesses are in greater depth later,¹⁰ but as a general matter, disadvantaged businesses are those that do not have the same opportunities as the hypothetical “ideal” business because of various social and economic factors. As a result of these constraints, disadvantaged businesses face more daunting odds of success.

The stakes for de jure exclusion of disadvantaged businesses from government support are high. Small businesses as a group employ roughly half of private sector workers.¹¹ Yet, the start-up rate for new businesses, almost all of which start small, has been declining.¹² Notably, small business ownership continues to lag among Black Americans, Latinxs, and women.¹³ By contrast, the market dominance of large companies, referred to by some as “zombies” because of the significant federally backed debt they carry,¹⁴ is increasing.¹⁵ It is becoming the norm that those with wealth and power enjoy government dependence, a form of socialism,¹⁶ while those in need go without.¹⁷ This has far-reaching implications since government economic intervention propping up large, inefficient companies, inhibits competition and stifles innovation.¹⁸

This Article is the first to identify the numerous and pernicious ways that laws enacted to assist small businesses exclude the most disadvantaged ones. It contrasts active exclusionary laws, such as trespass, with those laws and administrative regulations that have the effect of excluding.¹⁹ It also explores other basic forms of exclusion, such as lack of access to capital, that inhibit small businesses from competing. The Article builds on the author’s prior work on government interventions to advance economic development through influencing business location decisions,²⁰ attracting place-based investments,²¹ and understanding the impact of race and privilege on community-controlled economic development.²²

There are both economic arguments and arguments tied to racial justice for attacking laws that exclude disadvantaged businesses. From an economic perspective, if women and men participated equally in the economy as business owners, as one report suggests, global economic growth could increase by 3–6%, or between $2.5 trillion and $5 trillion.²³ With respect to racial justice, entrepreneurship or small business formation as a means for growing intergenerational wealth is one strategy for addressing income inequality across race.²⁴ The racial wealth gap—the result of centuries of institutionalized racism²⁵—hinders entrepreneurs of color from accessing capital.²⁶ As it becomes harder for low-income individuals to enter the middle-class through employment, small business ownership is an alternative pathway.²⁷

By way of background, efforts by Congress to protect small businesses have their origins in anti-chain store activism of the early part of the twentieth century.²⁸ Yet, over time, the actual effects of such programs often result in excluding disadvantaged businesses due to both regulatory limits²⁹ as well as challenging bureaucratic hurdles.³⁰ This should not come as a surprise—facially neutral laws designed to achieve social, economic, or environmental goals face challenges in creating processes that achieve their intended ends.³¹

In the context of federal, state, and local government procurement preferences for business owners from marginalized backgrounds,³² such programs exclude through high costs of certification and compliance.³³ Critics of these programs often focus on the costs associated with preferencing disadvantaged business owners based on sex and race.³⁴ Such arguments, successfully challenged in the US Supreme Court in Adarand Constructors, Inc. v. Pena,³⁵ for instance, focus on the harm faced by White-owned businesses in accessing government contracts.³⁶ If the goal is to do away with exclusionary preferences based on race, the Court has held, then remedies ought not exclude White business owners from preferential programs.³⁷ Justice Thomas, for instance, concurred in Adarand, arguing that even well-intentioned government actions to distribute benefits based on race have grave constitutional implications.³⁸

Yet, setting aside Adarand, preferential procurement programs fail to work for many small businesses owned by women and people of color. Specifically, participants in preferential procurement programs argue that such participation raises their own costs in obtaining government contracts.³⁹ The costs of compliance exclude many disadvantaged businesses from even applying. Scholars have failed to appreciate the regulatory result from laws designed to aid business owners in need of support. Separately, the author draws data related to a transparency law showing a city’s attempts to encourage contracting with worker-owned businesses, one category of disadvantaged businesses. Original research presented here indicates that despite setting a goal for contracting with such businesses, compliance through self-reporting is meager.⁴⁰

This phenomenon of excluding disadvantaged businesses plays out in regulatory situations as well. For example, in the context of state and local recreational cannabis licensure, exclusion of disadvantaged businesses through law persists despite efforts to include social equity licenses.⁴¹ Since most states that permit recreational cannabis favor existing medical cannabis producers, first movers in the legal market for medical cannabis dominate, which limits new market entrants.⁴² In Illinois, for instance, the initial fifty permitted recreational cannabis dispensaries were all previously licensed to distribute medical cannabis.⁴³ In the recreational cannabis market, it appears to hold true that the cost of complying with regulation alone tends to favor existing businesses rather than newcomers.⁴⁴

To operationalize the proposals raised in this Article, the author looks to economic justice campaigns. Anti-racist organizing and civil rights campaigns following the killing of George Floyd by police in Minneapolis have led to societal attention on economic support for Black businesses and communities.⁴⁵ At the same time, campaigns for economic justice, which have proliferated in recent years as a response to income inequality, focus on increasing minimum wages, championing public investment in education and infrastructure, and targeting public transfers to large employers.⁴⁶ Ongoing economic justice campaigns are well-positioned to bring focus and attention to instances where disadvantaged businesses are being excluded from markets by law.

In responding to the law’s exclusion of disadvantaged businesses, this Article argues that judges and lawmakers ought to focus on specific instances of exclusion in upholding and enacting economic development laws. In proposing remedies to eliminate exclusion, this Article focuses on incentives, mechanisms for enforcement, and principles to bear in mind. With respect to incentives, this Article suggests ways that mentorship programs as well as grants and loans can remove barriers that exclude disadvantaged businesses. Grant and loan programs ought to be tailored to reach the most disadvantaged businesses.⁴⁷ Prioritizing intermediaries, such as Community Development Financial Institutions, and encouraging such entities to take mission-related risks to expand support to otherwise excluded businesses, is a possible legislative tack. To the extent that affirmative-action programs expand government procurement, such programs should continue and grow in ways that withstand strict scrutiny. Further, lawmakers should consider a tax incentive for private businesses contracting with women- and minority-owned firms.

With respect to enforcement mechanisms, existing anti-discrimination laws should continue to be enforced. In addition, disadvantaged businesses excluded from accessing credit may consider the Equal Credit Opportunity Act as a means for challenging overly restrictive and exclusionary Small Business Administration rules. With respect to guiding principles, lawmakers should focus on inclusivity and competition, correcting past exclusion and sharing power, and observing economic consequences and externalities.⁴⁸

This Article Proceeds in four parts. Part I discusses the importance of disadvantaged businesses and the problem of the racial wealth gap. Part II introduces the data upon which the author’s argument is based, namely (1) federal, state, and local efforts to support small businesses, including the Paycheck Protection Program; (2) procurement preferences at all levels of government; and (3) recreational cannabis licensure. Part III introduces a snapshot of economic justice campaigns based on a set of defined criteria. Finally, Part IV offers proposals for eliminating the exclusion of disadvantaged businesses through incentives, enforcement, and a series of guiding principles.

I. Disadvantaged Businesses and the Racial Wealth Gap

Disadvantaged small business ownership is influenced to a large extent by race, class, and privilege—each aspect of which impacts wealth and income inequality. One ought to care about small businesses and the entrepreneurs who own and operate them, given the contributions they make to employees, innovation, and, perhaps counterintuitively, to the development and growth of large businesses. Small business ownership is one important prong that can address income inequality and the racial wealth gap across the nation. To the extent the law excludes disadvantaged businesses from government support, it harms those who are discriminated against based on race and gender.

A. Why We Should Care About Disadvantaged Businesses

Much focus and attention concerning the economy is placed on the stock market.⁴⁹ However, publicly held companies account for fewer jobs and wealth than most might expect. In the United States, over twenty-seven million small businesses generate around fifty percent of Gross Domestic Product.⁵⁰ Small businesses account for over 99% of US businesses and 64% of new jobs created in the United States.⁵¹ For context, the US Small Business Administration, the federal agency Congress tasked with supporting small businesses, defines small businesses as those companies that are independently owned and operated, exert little influence on their own within an industry, and generally have fewer than five hundred employees.⁵²

Not only are small businesses engines of economic growth, they are indispensable to a strong economy. More specifically, small businesses are crucial in three main areas: (1) creating jobs; (2) sparking innovation; and (3) providing opportunities for women and members of other marginalized groups to achieve economic independence.⁵³ We will take each in turn.

With respect to job creation, although small businesses are more prone to failure than large businesses, on balance they hire more workers, which leads to a net increase in the total number of workers.⁵⁴ Despite volatility, small business employment provides an entry point for many workers, including those who are hired for the first time.⁵⁵ Also, small business employment is a gateway to hiring workers in managerial positions, which are higher paying.

With respect to innovation, small businesses lead the innovation economy. In the area of patent creation, for instance, small businesses generate 26.5 patents per one hundred employees, while large companies generate only 1.7 patents per one hundred employees.⁵⁶ Plus, most large companies, including technology companies such as Amazon, Microsoft, and Apple, among others, all started as small businesses.⁵⁷

Finally, small businesses create opportunities for women and members of other marginalized groups, especially at a time when the ranks of unionized workers are diminishing, and many employers shift to contract work. While White men continue to predominate small business ownership, women and members of other marginalized groups are increasing in terms of percentage of small business owners. In 2017, 1.1 million companies were owned by women, and 1 million were owned by members of other marginalized groups.⁵⁸

Businesses that are disadvantaged are small, both in number and with respect to the federal definition. But they are also owned by individuals who face discrimination due to a factor beyond their control, such as sex, race, or some other characteristic that they individually cannot change. This Article focuses on disadvantaged businesses because they are ones—frequently most in need of support—facing exclusion because of laws designed to support small businesses.

B. Race, Privilege, Class, and Disadvantaged Business Ownership

Not only are fewer small businesses owned by women and members of other marginalized groups, but those companies are frequently smaller and less wealthy than their White-owned peer companies. In 2014, for instance, one report indicated that 63.4% of White-owned companies reported profitability, while only 57.7% of Latinx-owned companies and 45.6% of African-American-owned companies reported being profitable.⁵⁹ Further, Whites and Asian Americans hold one-third of their assets in businesses and other forms of financial assets, while Latinxs hold 15% and African Americans hold only 8% of their assets in the same types of property.⁶⁰ It ought not come as a surprise, therefore, that Latinxs and African Americans have one-tenth the net worth of White Americans.⁶¹

When families are left out of the small business growth engine, they often struggle to access the middle-class, including the ability to achieve home ownership and build intergenerational wealth. The racial wealth gap negatively impacts entrepreneurs of color who lack access to capital to fund entrepreneurial ventures.⁶²

Professor Lynnise Pantin points out that legislation addressing the racial wealth gap must address the structural barriers that have led to disparities in entrepreneurship.⁶³ Capital access, and specifically barriers to accessing capital, are among some the most significant hurdles that must be addressed.⁶⁴ In addition, legal barriers to small business formation and development are legion⁶⁵ and often inhibit business formation by women and members of other marginalized groups who have been institutionally discriminated against.

Scholars, including Pantin, have criticized recent efforts to reform the startup ecosystem for failing to address structural inequality.⁶⁶ The Obama Administration’s effort to reform alternative capital raising initiatives—the Jumpstart Our Business Startups (“JOBS”) Act⁶⁷—for instance, failed to address the legacy of racism in the startup ecosystem. Here, an otherwise well-intentioned law has the effect of failing to increase capital access. Specifically, as a result of significant Securities and Exchange Commission regulations, some have argued that it is unlikely entrepreneurs, including entrepreneurs of color, will seek capital through crowdfunding except as a last resort because of the high cost.⁶⁸

In addition, the most recent effort to develop the economies of poor areas—the Opportunity Zone—likewise fails to address structural racism. The Opportunity Zone was designed as a tool to increase the economic activity of geographic areas that lagged behind other areas following the Great Recession.⁶⁹ However, Opportunity Zones are likely to fail to the extent they do not address the spatial mismatch between the location of low-income workers’ residences⁷⁰ and the places of employment for such workers.⁷¹ Finally, one recent report shows that Black entrepreneurs and small businesses were in economic crisis pre-pandemic, in part due to geographic, industry, and asset poverty segregation, causing more severe declines during the pandemic.⁷²

C. Disadvantaged Business Ownership Is One Important Tool in a Holistic Approach to Income Inequality

Economic development for disadvantaged small businesses will not, on its own, solve economic inequality or systemic racism.⁷³ To achieve those goals, we need broad action and reform to law and institutions.⁷⁴ Yet, as some scholars have noted, entrepreneurship can be one aspect in an overall approach to achieving economic justice.⁷⁵ A complete approach must include marginalized communities as active participants in entrepreneurship through varied mechanisms.⁷⁶

Another entry point into the middle-class, and one that is often associated with business ownership, is residential home ownership. Families accumulating and borrowing against real estate equity is one of the most common mechanisms for small business capital raising. Discriminatory federal government programs that increased homeownership among suburban White families exacerbated the racial wealth gap.⁷⁷ With respect to housing, the US Supreme Court has been reluctant to impose judicial remedies, preferring legislative ones.⁷⁸ This jurisprudential phenomenon has implications for small business ownership as well: courts are likely to prefer legislative action over judicial intervention around economic and social matters.

Much in the way that homeownership is an engine for personal family wealth accretion that comes through rising home values, small business ownership provides for intergenerational family wealth development. The rewards of business ownership can be far-reaching. Operating a successful business can provide personal satisfaction. It can also provide lucrative returns for one’s family. The sale of a small business can offer income for one’s lifetime and assets to pass on to one’s children.

II. How Government Interventions to Support Small Businesses Exclude Disadvantaged Ones

A. Financial Assistance

With the rise of industrialization in the mid-1800s, states and cities began to invest in industry. These investments took the form of equity purchases in canal and railroad corporations,⁷⁹ and issuing debt instruments, the sale of which supported bridge and other ironworks construction.⁸⁰ As the economy grew, and the rise of industrialization shifted commerce away from small family farms, governmental interventions in markets to support small businesses shifted as well.

1. History of Small Business Administration

General support for economic development, and support for small businesses in particular, changed in the early twentieth century following the rise of chain stores.⁸¹ The Robinson-Patman Act of 1936⁸²—“the ‘Magna C[]arta’ of small business”⁸³—attempted to protect small retailers in the face of large chain store bulk buying and other discounting practices.⁸⁴ The Act, which focused on preventing unfair competition from chains, as opposed to independent stores, suffered from what Frederick Rowe described as a “chronicle of conflict, compromise and confusion.”⁸⁵

In the early 1930s, the federal government, under President Franklin Delano Roosevelt, formed the Reconstruction Finance Corporation to offer bailout funding during the Great Depression to banks and financial institutions, railroads, and the agricultural industry.⁸⁶ The Reconstruction Finance Corporation expired on June 30, 1954, which led members of Congress to consider another support mechanism as a replacement.⁸⁷ During World War II, the federal government was able to see how big businesses were easily putting smaller businesses out of work. Larger industries were able to increase their workload to easily meet wartime demands, while small businesses could not do so.⁸⁸ Since the federal government had consistently been supportive of small businesses, the creation of a federal agency directed to serve this sector of the economy fit within this long-term treatment of small businesses.⁸⁹

Against this backdrop, the Small Business Administration was formed when Congress passed the Small Business Act of 1953 specifically to provide federal support to small businesses.⁹⁰ The text of the organic statute speaks of “free competition” being the “essence . . . of private enterprise.”⁹¹ It may seem counterintuitive that the federal government, in touting free and open competition, would intervene in the economy and attempt to put a finger on the scale for smaller companies. But given the threats posed to small companies by the scale and consolidation of large ones, Congress acted to encourage and develop “the actual and potential capacity of small business.”⁹² The goals of the 1953 Act were thus clear—to foster small business growth and development.⁹³

Yet, from early on, federal interventions to support small businesses have excluded disadvantaged ones in a number of ways. One key exclusionary method has been limiting capital access solely to US citizens.⁹⁴ Since immigrant borrowers are such an important part of the economy, limiting capital access to those who are vulnerable due to citizenship is potentially harmful to economic stability of the families relying on income from immigrant-owned businesses.

Another exclusionary method has been limiting access to federal small business programs based on criminal justice system involvement.⁹⁵ For example, businesses with an excess of 20% ownership by an individual with a felony conviction are ineligible for most Small Business Administration programs. The Housing and Urban Development Act of 1968 amended the National Housing Act to exclude individuals convicted of a felony in connection with an act of civil unrest from receiving benefits afforded to disaster victims.⁹⁶ The amended law applies to the Small Business Administration with respect to the issuance of disaster loans because this amendment to the National Housing Act uses the phrasing “under any law of the United States providing relief for disaster victims.” Further, 13 C.F.R. § 120.110 states: “The following types of businesses are ineligible [for small business loans]: . . . (n) Businesses with an Associate who is incarcerated, on probation, on parole, or has been indicted for a felony or a crime of moral turpitude . . . .”

In addition, support for small businesses at the federal level has excluded disadvantaged businesses because of the race of the owner. Throughout the 1900s, the law denied Black banks the resources and capital required to support Black businesses.⁹⁷ At present, business ownership by members of marginalized groups continues to lag behind ownership of White men.⁹⁸

2. State- and Local-Level Financial Assistance

States and cities also engage in economic development activity to support particular employers or industries. Broadly, this economic development activity occurs in one of several ways. First, some states and localities offer grants or loans to particular industries, or across the small business sector. Second, mentorship programs connect new entrepreneurs with successful ones. Third, states and local governments spend approximately $68 billion each year on business location incentives, such as job creation tax credits, and even more funds on property tax abatements. Finally, the federal government and states cooperate through offering Small Business Development Centers to provide support and guidance.

Many states and local governments subsidize small businesses and particular industries with many small business operators. For instance, Alaska offers subsidized loans to bolster commercial fisheries and industries related to commercial fishing.⁹⁹ In addition, Alaska operates a limited-entry permit program for particular areas and types of fish.¹⁰⁰ However, as fishery profitability increases, local permit ownership, including in rural areas, declines.¹⁰¹ As a result, government policy to increase market access by local businesses—likely those disadvantaged with respect to access to capital and other factors—is negatively related to industry profitability.¹⁰²

In another instance, states administer the State Small Businesses Credit Initiative, a $1.5 billion fund included in the Small Business Jobs Act of 2010.¹⁰³ It is the case that capital made available through the Initiative appears to have reached very small businesses, since 80% of Initiative funds went to businesses with under ten employees.¹⁰⁴ Such a data point suggests that some funds, however modest, do reach very small businesses, but does not indicate the extent to which such businesses are necessarily deserving of governmental support.

With respect to mentorship programs, providing mentoring services from successful businesses to startups appears to be a best practice, especially at the state level. New York, for instance, has launched a mentorship program called Business Mentor NY.¹⁰⁵ A number of states offer mentorship specifically for encouraging procurement.¹⁰⁶

The author has already written at length about state and local business location tax incentives.¹⁰⁷ Suffice it to say that they are used at an increasing clip, with little evidence to support their use.¹⁰⁸ States and cities also seek to support small manufacturers, retailers, and service-sector small businesses. It is not uncommon for subnational governments to spend public resources to facilitate not only infrastructure—roads, bridges, fresh water, and sewer systems¹⁰⁹—but also direct economic infrastructure, such as retail markets.¹¹⁰

Other instances of state and local support for small businesses include grants and loans made available through economic development agencies. Such programs often focus on particularly important and already resource-rich industries, with unclear benefits for disadvantaged businesses. For example, Massachusetts offers companies within its tremendously vibrant life sciences sector incentives to grow and expand facilities.¹¹¹ While diversity is a priority with respect to students in life sciences and other STEM industries, the impact on businesses owned by women and members of other marginalized groups is unclear.¹¹²

In another instance, companies starting-up in Philadelphia can avoid fees and taxes on income and net profits for two years.¹¹³ However, businesses often lose money in the early years of operations. As a result, an early year tax abatement on profits is unlikely to drive business location decisions. The Jump Start Philly program includes exemption from licenses and registration, as well as a job creation tax credit—each of which may be useful for businesses owned by women and members of other marginalized groups.¹¹⁴

Finally, the US Small Business Administration offers assistance in the form of Small Business Development Centers.¹¹⁵ These Centers allow for cooperation between governments at all levels, along with the private sector, and educational institutions.¹¹⁶ Sixty-two Small Business Development Centers exist nationally and across US territories with over 900 service locations.¹¹⁷ As some research indicates, even these lenders and support organizations struggle to communicate with and offer services that reach those most in need.¹¹⁸

3. Disaster Financial Assistance and the Paycheck Protection Program

The CARES Act of 2020 included other examples demonstrating how disadvantaged businesses are often excluded from benefits in times of crisis. For context, the CARES Act was the largest direct economic stimulus in the nation’s history. The greatest allocation of dollars for employers was the Paycheck Protection Program, an expansion of the Small Business Administration’s 7(a) loan program. The Treasury and Small Business Administration issued rules requiring that for loans to be forgiven under the Paycheck Protection Program, 75% of loan proceeds must go to pay worker salaries, with no more than 25% allocated to other expenses, such as rent, utilities, mortgage interest, and related expenses. Such a requirement is harmful to businesses in high-rent, typically urban parts of the country.

When it was reported that publicly traded companies received Paycheck Protection Program loans, as well as franchises of large restaurant chains, there was governmental and public outcry. Part of the outcry had to do with the belief that such employers were not deserving of governmental support. Precisely these notions of justice and distributional concerns moderated through moral and political views gave rise to changes in the policy. In this instance, the Treasury extended time for businesses to return loans that they had received but no longer decided that they needed.

The Center for Public Integrity’s analysis, in July 2020, of recipients of Paycheck Protection Program funds indicated that less than 2% of funds went to Black-owned companies, and 6.6% went to Latinx-owned ones—with more than 83% going to businesses and organizations identifying as White-owned.¹¹⁹ Litigation related to disadvantaged businesses being excluded from participation in the Paycheck Protection Program is ongoing. In one instance, a number of civil legal services firms filed complaints on behalf of a number of business owners to stop the federal government from denying funds to business owners with particular criminal histories.¹²⁰ A federal district court in Maryland found that the CARES Act granted emergency authority to the federal agency to promulgate rules for Paycheck Protection Program. Yet, the court granted injunctive relief to the plaintiffs, requiring the federal agency to extend the deadline to apply for plaintiff borrowers.¹²¹

B. Procurement Preferences

The second primary way that laws designed to support small businesses exclude disadvantaged ones is in government procurement. This Section examines government procurement preferences that often exclude disadvantaged business owners, such as women, members of other marginalized groups, as well as veterans, and employees—despite having a primary purpose of aiding the same groups.

As is not untypical in the law school curriculum, much time is spent exploring the government at all levels as a market regulator. Much less time, however, is devoted to the role of governments as market participant. In fact, governments, through procurement, and other forms of contracting, are significant in the ways that they can move markets. Government procurement of goods and services offer significant opportunities for small businesses to secure contracts, and lead to increased viability of small businesses, including those owned by disadvantaged owners.¹²² Yet, as government at all levels adopted statutory solutions to include racial preferences in procurement—a form of affirmative action—the US Supreme Court intervened holding such racial preferences to strict scrutiny. Such strict scrutiny review places the burden on government to prove that such preferences are necessary and justified by data.

This Section explores in greater detail judicial interventions to curtail procurement preferences for small businesses owned by socioeconomically disadvantaged owners due to past and ongoing gender-based and race-based discrimination. The past twenty-five years of heightened, strict scrutiny standard of review arising from City of Richmond v. J.A. Croson Co.¹²³488 U.S. 469 (1989). and Adarand is discussed and analyzed. A key effect of the strict scrutiny standard of review has been excluding certain disadvantaged businesses who are unable to comply with or afford certification. Specifically, preferential procurement programs often have basic requirements that in some instances disadvantaged businesses cannot meet. This Section discusses these instances and explains how laws designed to support small businesses owned by women and members of particular racial groups are harming businesses most in need of support.

Finally, this Section introduces a dataset of self-identified, worker-owned businesses from which the City of New York has disclosed that, pursuant to local law, it has procured goods and services. This dataset offers some insight into transparency mechanisms at law that can be used to uncover otherwise well-intentioned laws. This Section suggests that transparency laws have use to the extent they indicate the shortcomings of government procurement in actually directing resources to businesses owned by particular owners—in the case of this dataset, employees.

1. Federal

Although preferences for small businesses proliferate federal contracting processes,¹²⁴ so do instances of excluding disadvantaged businesses.¹²⁵ The federal government, which conducts the world’s largest preferential procurement program for small businesses owned by disadvantaged groups, does so largely without scrutiny.¹²⁶ Those observers who study preferential procurement note that little is known about the effectiveness of such programs in reducing unemployment for women and members of other marginalized groups, and few studies are available to determine the effectiveness of individual programs.¹²⁷ From an outcomes perspective, this is troubling, especially given the dollar amounts of federal procurement. In fiscal year 2009, for instance, federal contracts with small businesses totaled $96.8 billion.¹²⁸

Stepping back for a moment, let us consider the challenges and opportunities ripe for excluding disadvantaged businesses in federal procurement. There are two main prongs for analyzing challenges facing all small businesses seeking to sell goods and services to the federal government: (1) cost and complexity, and (2) goal formulation and accountability. The following Sections explore each in turn.

a. Cost and Complexity

Cost, complexity, and other obstacles abound for small businesses hoping to secure a federal contract. Not only are the costs for small businesses to participate in federal procurement high, but also they are rising.¹²⁹ For instance, between 2009 and 2017 the cost increased 72%.¹³⁰ A report by American Express OPEN for Government Contracting found that small businesses owned by members of marginalized groups spent almost $153,000 per federal contract, and that large businesses have much more success in receiving prime contracts than do their small business-subcontractor counterparts.¹³¹ The US Small Business Administration estimates that businesses spend $80,000 to $130,000 to receive their first government contract.¹³² Those businesses unable to access capital sufficient to cover these costs are excluded from the process, and thus the market for federal contracts.

A report from the Department of Defense assessed obstacles faced by nontraditional suppliers, which includes small businesses.¹³³ Interviews with nontraditional suppliers revealed that their barriers include “lack of access to and communication from DoD;” “extensive, complex, and inefficient bid and selection process[es];” “administration and management of contracts that create[s] extra work and delays;” and “lengthy funding time line and final payments that often also involve[] delays and gaps.”¹³⁴ The report identified a longer term goal to “simplify and speed up the final payment processes.”¹³⁵ This is important because “the time between submission and award can be particularly problematic for small and new businesses with less capital to sustain salaries and company operations.”¹³⁶ On the issue of timely payment, Congress adopted the Prompt Payment Act in 1982, which provides that payment is due “30 days after a proper invoice for the amount due is received if a specific payment date is not established by contract.”¹³⁷

To reiterate, cost is one hardship government regulations place on newcomers—“young and inexperienced” businesses trying to enter the market—because often regulatory costs are unknown.¹³⁸ In a specific example, requirements that businesses share cost or pricing data with the government can lengthen and increase costs of participation in the procurement process and impede small business suppliers from winning contracts.¹³⁹ But cost is not the only obstacle for small businesses when it comes to participating in federal government procurement.

Perceived complexity and a sentiment among some business owners, including disadvantaged ones, of a lesser chance of success, is an additional barrier to small business owners seeking to win federal contracts.¹⁴⁰ “[G]overnment contracting rewards those willing and able to endure a path wrought with complexities, like reading and complying with wordy clauses . . . .”¹⁴¹ To address this complexity, advisors suggest some qualities that help small businesses receive contracts, which include relevant past performance; a strong financial position evidenced by yearly increases in revenue; access to capital; strategic partnerships; and an organized filing system.¹⁴² Not only must a business comply with the complexity of seeking a government contract, it first must show strong past results, which can be a challenge, especially for businesses owned by disadvantaged owners.

One entry point for small businesses to eventually win a prime contract is to begin as a subcontractor.¹⁴³ In other words, a business can start with subcontracts, demonstrate strong performance and growth, and eventually win a prime contract, the type of contract that is larger in sales revenue and scope. Yet, both the costs of seeking a contract, and the complexity involved in legal compliance, can lead many businesses, especially disadvantaged ones, not to participate because of de facto exclusion.

The National Defense Authorization Act for Fiscal Year 2021 is noteworthy with respect to its efforts to create training materials for disadvantaged businesses. Specifically, section 870 of the Act includes reporting requirements to Congress should a federal agency not meet its requirements in “disadvantaged business utilization.”¹⁴⁴ Further, section 871 requires the Small Business Administration to engage in category management trainings, which is the process by which federal agencies procure goods and services from small and disadvantaged businesses.¹⁴⁵ Monitoring the success of these reporting and training obligations will be helpful in assessing whether such efforts increase procurement from disadvantaged businesses.

b. Goal Formulation and Accountability

With respect to goal setting, the Small Business Act mandates that the President “annually establish Governmentwide goals for procurement contracts” for particular small business concerns¹⁴⁶ and requires minimum percentages of participation goals for these businesses.¹⁴⁷ In terms of achieving these goals, the Small Business Administration is required by statute to achieve these goals.¹⁴⁸ Federal agencies “shall” establish goals for small businesses, Service Disabled Veteran-Owned Small Businesses, Historically Underutilized Business Zones, Small Disadvantaged Businesses, and Women-Owned Small Businesses for prime contracts and subcontracts, and shall create plans to achieve such goals and expand small business participation across industries.¹⁴⁹

While the Small Business Administration is required to meet these procurement goals, actually achieving them, and the penalties for failure to do so, are subjects in need of focus.¹⁵⁰ Specifically, there is a lack of accountability for failing to meet the targets. In fact, there is no penalty for falling short of the target percentage.¹⁵¹ There have been years where targets were not met. In particular, procurement targets were routinely unmet for purchasing goods and services from Women-Owned Small Businesses and businesses in Historically Underutilized Business Zones.¹⁵² The Government Accountability Office (“GAO”) has even issued a report stating that the Small Business Administration has not sufficiently addressed previous recommendations from the GAO to fix problems with the Women-Owned Small Businesses and Historically Underutilized Business Zones programs, and to make changes to the procurement scorecard evaluation.¹⁵³

In other words, enforcement of goals for Women-Owned Small Businesses in federal procurement is particularly fraught. For example, the Federal Acquisition Streamlining Act of 1994 amended the Small Business Act to include a 5% procurement goal for small business concerns owned and controlled by women.¹⁵⁴ At the time, there was no set-aside program for Women-Owned Small Businesses.¹⁵⁵ Congress’ action to set a 5% aspirational goal amounted to a de-prioritization of Women-Owned Small Businesses in the contracting process.¹⁵⁶

In 2000, Congress enacted a set-aside program for Women-Owned Small Businesses in the Equity in Contracting for Women Act. Yet, it took ten years for the Small Business Administration to issue its final rule for the program, and the program only took effect in 2011.¹⁵⁷ In the roughly ten years since the program’s implementation, the goal has only recently been met, and there have been scholarly proposals to tweak the program to ensure the goal is regularly reached.¹⁵⁸ Some small business owners who stand to benefit from the program have testified to Congress expressing the futility of mere goals and questioning the usefulness of the Women-Owned Small Business program due to lack of any meaningful consequences for not achieving those goals.¹⁵⁹

Consistent with this, there are calls for stricter enforcement, with one scholar suggesting that the government could implement both incentives and penalties to drive agencies to meet the targets each year.¹⁶⁰ The incentives might involve bonuses and recognition, whereas the penalties might involve the government revoking a certain amount of funding from the agency.¹⁶¹

Perhaps the statutory language is to blame for agencies’ failures to meet procurement standards. Consistently describing the targets as “goals” in reports and scholarship may undermine the use of “shall” in the statute, which requires agencies to meet those targets. Perhaps commentators should more often call the statutory language “requirements” rather than “goals.” Regardless, stricter requirements for meeting these targets is necessary, and the absence of meaningful accountability allows the exclusion of disadvantaged businesses to continue.

To overcome barriers, the Small Business Administration created the 8(a) program to carry out its affirmative action goals. One report indicates that in the area of highway contracting, the 8(a) program has increased state-level contracting with firms owned by individuals from disadvantaged groups, but has done little to increase purchases from women-owned firms.¹⁶²

More criticism stems from research into the mentorship aspects of the 8(a) program. Professor Grant H. Lewis, for instance, argues that the 8(a) program’s mentorship aspects fail at improving small businesses owned by disadvantaged owners. Lewis draws this conclusion after analyzing data indicating that businesses participating in the 8(a) program perform no better than do service-disabled, veteran-owned businesses, which receive the same financial benefits of preferential contracting with none of the mentorship or other assistance of the 8(a) program.¹⁶³

Size standards for small businesses determine the largest a business can be to qualify for government contracts that are set aside for small businesses, and they vary between industries.¹⁶⁴ Size standards are established under the North American Industry Classification System (“NAICS”).¹⁶⁵ In reaching size standards, the Small Business Administration considers factors like the economic characteristics of an industry, technological changes and competition from other industries, and whether a business concern is dominant in its field.¹⁶⁶ Thus, the Small Business Administration issues numerical requirements for small businesses.¹⁶⁷ In addition to the numerical requirements and the business not being dominant in its field, the business must be for-profit, independently owned and operated, and located and operated in the United States or its territories, with an exception for businesses outside the United States that also operate within the United States and contribute to the economy.¹⁶⁸

Typically, size standards are based on average annual receipts or average number of employees.¹⁶⁹ Annual receipts are calculated by total or gross income plus the cost of goods sold.¹⁷⁰ The number of employees includes those working on any basis: full-time, part-time, or otherwise.¹⁷¹ It is calculated by averaging the number of employees for each pay period over the past twelve months.¹⁷² Additionally, there are criminal penalties for businesses that misrepresent their size status to qualify as a small business.¹⁷³

In sum, the largest size standard of industries based on average annual receipts listed in any sector is $41.5 million, except for industries like commercial banking, which are within the finance and insurance sector, and have a size standard of $600 million in assets. The largest size standard based on average number of employees across the industries is fifteen hundred.¹⁷⁴

2. Judicial Intervention to Limit Race-Based Preferences in Procurement

Protected and suspect class preferences in legislation are among the most debated and controversial constitutional topics. The Supreme Court’s recent affirmative action jurisprudence in the area of race-based preferences in government is equally politically charged. Starting in the late 1980s, the Court’s conservative justices began striking down racial preferences in government procurement.

In City of Richmond, for instance, the Court struck down a local plan in Richmond, Virginia, to award at least 30% of city construction contracts to minority-owned business enterprises—those firms with at least 51% ownership and control by Black, Spanish-Speaking, Asian,¹⁷⁵ or Native-American individuals.¹⁷⁶ The City Council Members in Richmond relied on the Court’s decision in Fullilove v. Klutznick,¹⁷⁷ which upheld a 10% minority-owned business enterprise program against a declaratory action brought by industry associations seeking to invalidate the program.¹⁷⁸ In Fullilove, Chief Justice Burger, writing for the majority, concluded that the 10% contracting requirement was constitutional since Congress acted in 1977 through the Public Works Employment Act to remedy prior race-based discrimination that kept minority-owned business¹⁷⁹ from government contracting opportunities.¹⁸⁰

Following City of Richmond, the Court held in Adarand that race-based procurement programs are subject to strict scrutiny (the highest level of review), requiring the government to show a compelling government interest and a narrowly tailored approach to further that interest.¹⁸¹ In Adarand, a company bidding on a highway guardrail subcontract sued to stop a federal transportation program that gave preference to prime contracts awarded to companies working with disadvantaged business enterprises.¹⁸² Disadvantaged business enterprises are defined by both social and economic disadvantage. Social disadvantage relates to individuals “subjected to racial or ethnic prejudice or cultural bias,” and economic disadvantage relates to socially disadvantaged individuals whose ability to compete is “impaired due to diminished capital and credit opportunities as compared to others . . . who are not socially disadvantaged.”¹⁸³

Prior to adopting the program to favor socially and economically disadvantaged businesses, Congress investigated and studied disparities in small business ownership and success. In 1978, when federal transportation law was amended to include gender and race in small business contractor ownership, minority-owned businesses comprised 4% of the total number of companies, but only 1% of business revenue.¹⁸⁴ Further, a 1975 report indicated that despite a minority population of 16%, only 3% of businesses in the nation were owned by marginalized individuals.¹⁸⁵ In the area of federal procurement, the disparity continued. In 1986, for instance, businesses owned by marginalized individuals received only 2.7% of federal prime contracts, or around $5 billion out of $185 billion.¹⁸⁶

The majority held in Adarand that racially based procurement preferences are unconstitutional. According to Justice Scalia, they are un-American.¹⁸⁷ For Scalia, and the other justices concurring in the judgment in Adarand, racial preferences are unjustified to solve past discrimination since our society is somehow post-racial.¹⁸⁸

The opinion in Adarand has led to two outcomes. On the one hand, plaintiff companies have fought racial preferences in government procurement, both in other federal agencies, as well as the Small Business Administration’s section 8(a) program. On the other hand, disparity reports have proliferated, where governments attempt to justify racial preferences in procurement based upon data showing a dearth of contracts going to businesses owned by marginalized individuals.

With respect to challenges to race-based contracting preferences, such challenges have been successful at the federal district court and circuit court levels. In DynaLantic Corp. v. United States Department of Defense,¹⁸⁹ for instance, the United States Court of Appeals for the District of Columbia Circuit reversed a lower court ruling and found that a contractor providing flight simulation equipment had standing to challenge the Small Business Administration 8(a) program, in which the Department of Defense was participating.¹⁹⁰ The court in DynaLantic found a non-socially and economic disadvantaged business was injured by the 8(a) program because it could not compete on equal footing with businesses participating in the 8(a) program.¹⁹¹ The 8(a) program was upheld by the district court, though the government did not pass strict scrutiny as applied to the plaintiff in the context of the military simulation and training industry.¹⁹² As part of a 2016 settlement, the Department of Defense agreed not to award prime contracts in military simulation and training through the Small Business Administration 8(a) program for two years.¹⁹³

Counsel for DynaLantic Corporation noted that federal procurement programs that favor contractors based on race must be narrowly tailored. For the government to consider race, it must consider race-neutral alternatives and place limits on racial preferences over time.¹⁹⁴ The Center for Individual Rights argues that the 8(a) program does neither since no business that has participated in the 8(a) program has ever been removed as a preferential contractor despite years of having the preference in place.¹⁹⁵

And yet, the Small Business Administration 8(a) program has withstood facial challenges. In Rothe Development, Inc. v. Department of Defense,¹⁹⁶ another defense contractor challenged the 8(a) program on the grounds that the program violated their right to equal protection under the Due Process Clause of the Fifth Amendment, namely, that the 8(a) program’s support for “socially disadvantaged” small business owners was unconstitutional on its face.¹⁹⁷ As in DynaLantic, arguments for and against government intervention rested on expert evidence concerning discrimination in government contracting.¹⁹⁸ The district court held that, as in DynaLantic, the government had satisfied the strict scrutiny requirement by showing a compelling government interest in remedying past discrimination in federal contracting, and that the program was narrowly tailored. The district court laid out the six-factor analysis that comprises narrow tailoring.¹⁹⁹ The court of appeals affirmed the district court’s holding, though applied rational basis review, finding that the 8(a) program lacks a racial classification.²⁰⁰

At the state level, Ohio’s highest court has upheld the constitutionality of race-based procurement programs. In Ritchey Produce Co. v. ODAS,²⁰¹ for instance, the court found that a Lebanese-owned fruit and vegetable wholesaler was properly excluded from the state’s minority-owned business certification program.²⁰² The case hinged, in part, on the interpretation of a statutory term and whether it operated to exclude the owner from certification in the preferential contracting program.²⁰³ The opinion of the court went to great lengths to catalogue the legislative findings that support set-asides, including the fact that although 7% of companies were owned by marginalized business owners between 1975 and 1977, less than 0.5% of government contracts were issued to such companies.²⁰⁴

Analyses of Rothe focus on its seeming overcomplication of the simple Adarand rule.²⁰⁵ Despite the D.C. Circuit’s holding in Rothe that the 8(a) program lacks racial classification, the government continues to justify the program using disparity reports. Similarly, state and local governments use disparity reports to justify preferential contracting programs.

With respect to disparity reports, following City of Richmond, the burden shifted to governments to prove that set-asides and preferences in contracting were justified.²⁰⁶ Disparity studies are research tools that can be used as evidence to support government interventions favoring race-conscious notions.²⁰⁷ For instance, a 1997 study by the Urban Institute reviewing ninety-five state and local disparity studies resulted in a finding of substantial disparities in government contracting.²⁰⁸ Namely, firms owned by marginalized individuals, at the time of the report, earned $0.57 cents for every dollar they would be expected to receive based on their availability.²⁰⁹

Jurisdictions seeking to continue race-based set-asides have contracted for costly disparity studies showing continued market-based discrimination against women and firms owned by other marginalized individuals.²¹⁰ Disparity studies are significant undertakings. For instance, the City of Winston-Salem, North Carolina, is undergoing a disparity study for the five years between 2013 and 2018.²¹¹ Further, disparity studies can be expensive. The City of Phoenix budgeted $250,000 for a disparity study that updated a prior study.²¹² Finally, methodologies for administering proper disparity studies differ significantly.²¹³

3. After Adarand

After Adarand, the Small Business Administration began certifying and ended the self-certification process for Small Disadvantaged Businesses.²¹⁴ Ever since, an almost yearly focus of Small Business Administration reviews has centered on whether the Small Business Administration is effectively ensuring eligible firms are participating in the 8(a) program. In 2001, a GAO review found that the number of firms certified by the Small Business Administration was far less than projected based on the number of firms that had previously self-certified.²¹⁵ The report concluded that the low number of applications for certification was likely due to confusion about how the government would implement the program, the burden of applying, uncertainty about the benefits of certification, and firms not qualifying for certification.²¹⁶

A 2012 study by the Small Business Administration’s Office of Inspector General found that the thirty-day period for a reviewer to determine whether to keep or terminate an 8(a) firm’s participation in the program was too short.²¹⁷ The study found that by making quick decisions, reviewers may be retaining ineligible firms.²¹⁸ Another study, in 2014, reported that lack of controls led to ineligible firms receiving 8(a) and Historically Underutilized Business Zone set-aside contracts, resulting in incorrect reporting.²¹⁹

Other recent studies from 2016 through 2018 focused more specifically on eligibility requirements.²²⁰ Those studies found that the agency did not timely remove ineligible firms and did not investigate or account for all complaints on an 8(a) firm’s eligibility.²²¹ The agency’s Office of Inspector General issued eleven recommendations in 2018, some of which include conducting continued eligibility reviews for ineligible firms still in the 8(a) program and establishing clear policies to address complaints on 8(a) eligibility in a timely manner.²²²

4. State and Local

State and local governments using their purchasing power to advance social, economic, and other political goals is by no means new. After Fullilove, many states and cities aggressively enacted the sort of percentage contracting preferences for owners of businesses previously discriminated against based on race. To aid states and cities in this process, the American Bar Association, in 1979, issued The Model Procurement Code for State and Local Governments.²²³

Following Adarand, however, nineteen states have eliminated set-asides for businesses based on race or gender of the owner.²²⁴ Government-sponsored set-asides continued to be questioned, including through voter referenda in California in 1996, Washington in 1998, and in other states.²²⁵ Nevertheless, state and local governments continue to offer a range of contracting opportunities to small businesses.

The US Department of Transportation is one of the largest funding sources for state and local preference programs for disadvantaged business enterprises.²²⁶ Since transportation is typically one of the largest state budget expenditures, these transportation contracts present sizable opportunities for disadvantaged businesses. Contracts issued through the Federal Highway Administration, for instance, directed between $2.3 billion and $2.8 billion to disadvantaged business enterprises in 2006.²²⁷

a. Trends in State and Local Procurement

A recent survey of procurement offices of twenty-eight states and the District of Columbia reveals several trends in procurement.²²⁸ Specifically, the survey found that states are using the following tools to improve procurement: (1) increasing the use of data and analytics to improve processes; (2) focusing on best-value strategies and not merely prioritizing price; (3) implementing solution-oriented approaches that result in more responsiveness from vendors; (4) forging closer relationships with vendors; and (5) using new contracting strategies to increase effectiveness.²²⁹ In particular, a number of states, including Georgia, Massachusetts, Michigan, Minnesota, New York, Ohio, and Utah use pools of prequalified vendors to improve, among other things, the inclusion of economically disadvantaged companies in procurement.²³⁰

The next Section discusses a particular example of how one city is providing disclosure around the employee- and worker-owned companies from which it purchases goods and services.

b. New York City Local Law 22 of 2015

In 2015, New York City enacted a transparency requirement that it reports annually on the worker-owned cooperative business that it contracts with for goods and services.²³¹ Businesses owned by their workers are one example of disadvantaged businesses, since employee-owned firms often struggle with accessing traditional credit. The requirement was enacted in local law as part of a multi-year effort to form new worker-owned businesses.²³² Reports from the Worker Cooperative Business Development Initiative, a network of cooperative support organizations,²³³ indicate that cooperative businesses face a number of issues in formation and operation. These issues include difficulty in understanding city procurement information, in winning their first contract, and in accessing capital to grow their businesses.²³⁴

In 2017, the first year that the City reported on the number of worker cooperatives with which it contracted, twelve entities self-identified as being worker-owned. The author obtained data in the form of the entity names of the twelve businesses from staff at the Democracy at Work Institute, an organization that supports the formation of worker cooperatives, and the New York City Network of Worker Cooperatives, an industry trade group.²³⁵ The author analyzed the entity forms for each of the twelve entities selected when they formed their respective entities. In addition, the author checked to see whether any of the twelve entities hold themselves out to the public as worker-owned cooperatives. Notably, only one of the entities that was reported holds itself out to the public as a worker-owned company.²³⁶ None of the other entities either adopted a cooperative entity form or hold themselves out to the public as being worker cooperatives.²³⁷

There are additional annual reports available. Those reports show that the total dollar amount of contracts with worker cooperatives has increased. However, it is unclear whether the types of businesses that are actually owned by their workers or employees has increased.

C. Licensing: Recreational Cannabis and Social Equity

As of the start of April 2021, fifteen states and the District of Columbia have legalized recreational cannabis.²³⁸ Three states, Washington, Colorado, and Illinois, have social equity programs to ensure that, when deregulation occurs, small business owners have equal access to the market.²³⁹ Since states that permit recreational cannabis frequently began by permitting use for medical reasons, first movers have a significant advantage over upstarts, including those owned by marginalized individuals.²⁴⁰

Much of the attention surrounding social equity in the recreational cannabis market is framed around steps regulators can take to address racial discrimination.²⁴¹ In March 2020, the Washington legislature signed social equity legislation that sets aside licenses for applicants who meet one of several criteria: showing “they live in a disproportionately impacted area, were convicted of a cannabis crime or had someone in their family convicted.”²⁴² The Washington example shows the movement toward implementing social equity. In Colorado, in June 2020, the legislature amended their existing accelerator program to place focus on social equity for recreational cannabis owners with social equity in the very title.²⁴³ An applicant will be eligible in this social equity program if one of the following eligibility criteria are met: the applicant lived in an economically disadvantaged community for at least fifteen years between 1980 and 2010; the applicant or one of their immediate family members has been arrested or convicted for a marijuana offense; or the applicant’s income is at or below a certain amount.²⁴⁴ In Denver, where one study showed that almost 75% of owners with licensed cannabis businesses are White, the market has favored existing medical cannabis producers and retailers.²⁴⁵

In Illinois, where recreational cannabis became legal in 2020,²⁴⁶ the social equity program offers reduced application fees, technical support, and provides loans to entrepreneurs meeting certain criteria.²⁴⁷ Additionally, 25% of the tax revenue from cannabis sales is directed to a grant-funding program,²⁴⁸ which to date amounts to around $52 million.²⁴⁹ The COVID-19 pandemic has led to a slower rollout of social equity licenses.²⁵⁰ Since all of the fifty Illinois dispensaries were previously medical sellers, inclusiveness in the ownership of upstart recreational sellers is lagging.²⁵¹

A technical glitch prevented diverse owners in Los Angeles from obtaining licenses.²⁵² A social equity industry association sued.²⁵³ The parties settled, and Los Angeles doubled the number of licenses available for social equity applicants to two hundred.²⁵⁴

As Maine moved to recreational sales, it extended a similar preference as Illinois for medical sellers of cannabis.²⁵⁵ The scoring system in Portland, Maine, for instance, favors applicants with both long-term leases and at least $150,000 in liquid assets.²⁵⁶ In Nevada, the Cannabis Compliance Board is focusing on vetting license applicants and stricter regulation.²⁵⁷ Massachusetts has draft regulations that would expand fee waivers for those participating in the social equity program, which could potentially save those businesses thousands of dollars.²⁵⁸ This follows reports that tax proceeds are bypassing Massachusetts communities impacted by the war on drugs.²⁵⁹

The Smart and Safe Arizona Act, approved by referendum in November 2020, references “nationwide pressure . . . to diversify cannabis ownership.”²⁶⁰ As a result, the initiative provides for 26 licenses for social equity applicants.²⁶¹ These licenses notwithstanding, of the 130 total licenses that will be issued, current medical sellers are much more favored as license recipients.²⁶²

The Arizona law reserves 10% of revenue²⁶³¾after covering costs associated with carrying out the Act¾to the Justice Reinvestment Fund.²⁶⁴ Of the 10% it receives from the Smart and Safe Arizona Fund, the Justice Reinvestment Fund will transfer 35% to county public health departments to provide justice reinvestment programs; 35% to the Department to “distribut[e] grants to qualified nonprofit organizations that provide justice reinvestment programs in [Arizona];” and 30% to the Department to address public health issues.²⁶⁵

In New Jersey, there are social equity provisions in the medical marijuana context. For instance, the Jake Honig Compassionate Use Medical Cannabis Act provides that at least 15% of licenses be awarded to a certified minority-owned business and 15% to certified women- and disabled veteran-owned businesses.²⁶⁶ By contrast, the November 2020 recreational cannabis referendum in New Jersey had no social equity measures in place. Advocates called for social equity provisions in the New Jersey law.²⁶⁷

At the federal level, Congress is considering the Marijuana Opportunity Reinvestment and Expungement Act of 2021.²⁶⁸ Known as the MORE Act of 2020, the act would advance a number of key initiatives, including creating a trust fund to support business in communities impacted by the war on drugs. In addition, the law explicitly would prevent the Small Business Administration from declining to offer loans to businesses owned by individuals with prior cannabis offences.²⁶⁹ Further, the law creates an equitable licensing grant program designed to assist states and local governments in creating equitable licensing programs.²⁷⁰

III. The Current State of Economic Justice Campaigns

Advocacy campaigns nationally can, and in some cases already are, advancing preferential government procurement practices. The author collected data about current economic justice campaigns using limited search terms to investigate the current state of advocacy efforts around procurement preferences in particular, and around economic justice broadly. This Part presents and analyzes the limited campaign-related data that was collected. Importantly, additional economic justice campaigns exist that this survey does not identify. The data presented, however, is representative of trends nationally. One particular campaign to advance small business preferential procurement based on the race and gender of the business owner is presented to advance the argument of this Article: that governments can further expand inclusivity in government procurement for small businesses owned by women and members of other marginalized groups.

A. Objectives of Economic Justice Campaigns at the Moment

During the course of performing research concerning economic justice campaigns, the author and a research assistant identified a total of twenty-seven ongoing economic justice campaigns. Our research methodology included internet searches using search terms descriptive of particular small business owner preferences, such as “MWBE,” “veteran,” and “employee-owned,” in connection with a broader search term, such as “economic campaign,” or simply “campaign.” Upon reaching a list of organizations following the initial search, the researchers read organization and campaign websites and explored accompanying news stories and partner websites.

The results of this research are presented below in four campaign categories: (1) those with an industry focus; (2) those with focus on particular employers; (3) those that aim attention on public budgets; and (4) those with a national scope. The full findings of this study are listed in the attached Appendix. In classifying economic justice campaign objectives, the author offers a proposal for how the recommendations for reform in this Article can, and in a number of cases already are, being implemented at the grassroots and advocacy levels.

In no way is this search meant to be a comprehensive presentation of all current economic justice campaigns currently in progress in the nation. Such a survey is outside the scope of this Article. Rather, the presentation of these campaigns is an attempt to offer a limited sampling of particular types of campaigns that may benefit from the research presented elsewhere in this Article.

No doubt there are additional economic justice campaigns ongoing. The author invites additions to the list and types of campaigns compiled in the coming pages. Further, the author invites suggestions about other advocacy efforts that could benefit from the research presented elsewhere in this Article.

1. Industry Focus

The first category of economic justice campaigns identified place focus on a particular industry, in a number of cases oil, gas, and related fossil fuel producers. For example, People’s Action is a national membership organization with offices in Chicago and Washington, D.C., and member groups in twenty-seven states. It seeks to end “taxpayer subsidies for oil and gas companies” as part of its People & Planet First campaign.²⁷¹ Another organization, Kentuckians for the Commonwealth, has an economic justice campaign that seeks to mitigate environmental harms and extractive business practices of coal, oil, and gas companies in Appalachia.²⁷²

Some campaigns have specific objectives related to legalized cannabis. The organization New Virginia Majority, for example, has an Economic Justice Campaign that supports both large businesses paying their fair share of taxes, and to use a portion of tax revenue from legalized cannabis to assist Black entrepreneurs.²⁷³ The theme of using recaptured subsidies was echoed by People’s Action, which supports using recaptured subsidies to fossil fuel companies to provide reparations for marginalized communities.²⁷⁴

2. Particular Employers

Other campaigns focus objectives on particular employers. In a number of cases, campaigns are focused on retailers such as Amazon.com and Walmart.²⁷⁵ At least five economic justice campaigns are organized in opposition to public subsidies extended to Amazon.com,²⁷⁶ and at least one national campaign is organized to counter state and local subsidies for Walmart.²⁷⁷ With respect to Amazon.com, most of the local campaigns are focused on its search for a second headquarters.²⁷⁸

3. Public Budgets

At least twelve economic justice campaigns across the nation have organized to address public spending, in particular with respect to education, health care, and infrastructure. Many such campaigns, Texas Forward, for instance, often include organized labor and advocate shifting public funds to public services instead of subsidizing private businesses.²⁷⁹ Other campaigns, such as Redlight the Gulch in Atlanta, are contesting and litigating public approvals for development projects, arguing, in one instance, that public funds ought not be diverted “away from public services to subsidize” a large-scale development project.²⁸⁰

In the context of public budgets, 2020 brought about many movements in cities to shift funding from policing to human social services. Austin, Texas, for instance, shifted $150 million from the police department to instead fund health care, access to food, and violence prevention.²⁸¹ Other cities across the country, including Los Angeles, San Francisco, Baltimore, Washington, D.C., Hartford, Portland, Salt Lake City, Seattle, Philadelphia, and Minneapolis have all cut or significantly altered funding of their police.²⁸² With extremely high costs of defending police misconduct lawsuits, as well as the high costs associated with current police tactics, less expensive approaches to protecting public health and safety are increasing.²⁸³

4. Nationwide Focus

Nationwide, economic justice campaigns have emerged in recent years arguing for fair taxation and community control of economic development infrastructure. These campaigns often overlap with the public budget-focused campaigns, however, their national scope and organization merit special mention. For instance, the Partnership for Working Families launched the “We Make This City” campaign in ten cities across the country in 2018.²⁸⁴ This campaign seeks to fight for access to and control over public infrastructure including housing, transit, education, and water.²⁸⁵

B. Economic Justice Campaigns and Procurement Preferences

The issue of procurement preference for women- and minority-owned small businesses is also a feature of economic justice campaigns. In addition to the New Virginia Majority’s Economic Justice Campaign effort to direct government revenue from legalized cannabis sales to Black entrepreneurs,²⁸⁶ other campaigns, such as those led by The Black Institute place attention specifically on government procurement.²⁸⁷ In 2015, The Black Institute issued a report titled “Not Good Enough: The Myth of ‘Good Faith and Best Efforts’” detailing the history of minority- and women-owned business enterprise procurement law and its impacts.²⁸⁸

In their 2015 report, The Black Institute proposed a number of key recommendations to support minority- and women-owned business enterprises with respect to procurement. For example, the report called for a mandatory 35% of prime contracts, and subcontracts go to minority- and women-owned business enterprises, as well as the establishment of Chief Diversity Officer positions in state and city agencies to monitor minority- and women-owned business enterprise procurement programs.²⁸⁹ The report also included several seemingly outside-the-box ideas, such as requiring any for-profit company that receives tax incentives from the city or state to participate in public minority- and women-owned business enterprise procurement requirements, and allocating 1% of public pension funds to offer start-up capital to minority- and women-owned business enterprises.²⁹⁰ The advocacy of a group such as The Black Institute is instructive as this Article turns in the next Part to potential solutions to the phenomenon of excluding disadvantaged businesses.

IV. Eliminating Exclusion of Disadvantaged Businesses

This Part focuses on potential opportunities lawmakers and judges can use to remedy, and possibly eliminate, exclusion in legal interventions to support disadvantaged businesses. This Part is organized in the following categories: (1) financial assistance; (2) procurement preferences; and (3) licensing. Financial assistance remedies focus on mechanisms that rewards behavior that reduces exclusion. Procurement preference tools punitively address instances of exclusion. Finally, licensing principles guide how lawmakers view policy making around support for small businesses to avoid exclusion of disadvantaged businesses. Such proposals may naturally find a place within the campaign platforms of movements for economic justice currently active across the country. In addition, the author suggests such principles ought to guide scholarly critique and analysis of economic development laws more generally.

A. Financial Assistance

1. Grants and Loans to Disadvantaged Businesses

This Article has critiqued the Paycheck Protection Program—the federal government’s largest forgivable loan program for small businesses—as excluding disadvantaged businesses by, among other things, restricting owners with certain prior felonies from seeking funding. Relying on criminal records in the application for small business loans adds a greater burden on African American business owners who already face disparate treatment with regard to the carceral state.²⁹¹ The challenge, perhaps, is in designing a tool that is inclusive, avoids excluding disadvantaged businesses, and maximizes impact among the most deserving businesses.

One point of critique for allocating funding is in deciding which institutions are responsible for distributing the funds. The Paycheck Protection Program relied on banks, which were already certified as lenders under the Small Business Administration’s 7(a) program. It is possible that this reliance is misplaced.

Many Black-owned businesses rely on Community Development Financial Institutions, lenders which are certified by the US Treasury, and other community-based banks. As of April 7, 2020, one-third of community bankers did not have access to the Small Business Administration’s system for administering the Paycheck Protection Program.²⁹² Small businesses needing to access loans had to look elsewhere for services.

Financial technology (“fintech”) company Kabbage, for instance, processed $7 billion in Paycheck Protection Program loans to 300,000 small businesses.²⁹³ There are reasons to be skeptical of fintech as a mechanism for expanding access to credit and financial products.²⁹⁴ However, expanding access to financial products through postal banking, or other means, is an important concept in distributing government grant or loan funding to disadvantaged businesses.²⁹⁵

The process by which loans or grants are made can be as important as allocating funding in the first place. Policy makers are wise to explore processes that expand rather than limit access. Expanding access includes using nontraditional lenders, including Community Development Financial Institutions.

2. Mentorship

Mentorship programs for disadvantaged businesses exist at all levels of government and offer in-kind financial assistance that business owners might otherwise have to pay for in order to navigate market access. Currently, the Small Business Administration’s 8(a) program offers disadvantaged businesses mentorship, in addition to preferential contracting.²⁹⁶ Further, states offer mentorship to startups, including those owned by individuals discriminated against on the basis of sex and race and which are also financially disadvantaged.²⁹⁷ Finally, new legislation would allow disadvantaged businesses to seek mentorship in cannabis licensing and operations in Colorado.²⁹⁸

At least one commentator critiques mentorship programs as inadequate at adding additional value to disadvantaged businesses and creating opportunities for rent-seeking.²⁹⁹ From the perspective of exclusion, mentorship—which typically amounts to the sharing information and lived experience—appears to be a benign-level support. To the extent that mentorship excludes particular disadvantages from accessing information, more expansive opportunities for mentorship should be considered. In addition, further study related to the benefits or potential harms of mentorship ought to be performed and disseminated. It is important to continue government mentorship programs, however, insofar as they do assist disadvantaged businesses in accessing resources those businesses would not otherwise access.

B. Procurement Preferences

To the extent that government set-asides for disadvantaged businesses decrease unemployment for members of marginalized groups, such programs ought to continue.³⁰⁰ Professors Chatterji, Chay, and Fairlie find that Black business ownership increased in the 1980s following city-level initiatives to set aside contracting for minority-owned businesses.³⁰¹ However, the study performed by Chatterji, Chay, and Fairlie note that those who were better educated benefitted more from set-asides.³⁰²

This Article argues that attention in reviewing such programs ought to focus on instances where disadvantaged businesses are excluded, including those business owners who lack advanced educational credentials. Such attention, while well-intentioned, is difficult to implement. In addition, many existing procurement programs allow otherwise high ceilings for the number of employees and the amount of annual revenue, which dictate the size of startup businesses and new entrepreneurs that can qualify for set-asides. Customers in government tend to have concerns that startup companies, especially disadvantaged ones, may lack the size, capital, knowledge, or ability to perform contracts.

Another concern around certifying businesses as eligible for favorable treatment for procurement is confirming that the business is actually what it claims to be. For instance, in order to be eligible for state minority- and women-owned business enterprise certification, businesses are required in many cases to be in business for at least three years. Some states, like Kansas, on the other hand, does not list such a requirement on their certification affidavits.³⁰³

This Article does not claim to offer a solution to solve the challenges presented by government procurement preferences for disadvantaged businesses. It does claim, however, that lawmakers and judges, when enacting and reviewing such programs, ought to focus on instances where the proposed program operates to exclude disadvantaged businesses. Avoiding such exclusionary laws and remedying such exclusion when it exists, ought to be the focus of government interventions in this area.

The following Sections will introduce proposed solutions Congress and state legislatures could enact to help include disadvantaged businesses in future programs.

1. Tax Incentive for Purchasing from Disadvantaged Businesses

A market-based approach to breaking down barriers that exclude disadvantaged businesses might include a tax incentive for private companies purchasing goods and services from disadvantaged businesses. With such an approach there are several key questions to address during implementation: (1) which businesses qualify as a disadvantaged?; (2) what is the appropriate amount of the tax incentive?; (3) what is the process for taxpaying companies for claiming and reporting the incentive; and (4) how should the Internal Revenue Service audit for fraud?

With respect to disadvantaged business qualifications, there are two options: self-certification or government-based certification. Self-certification is simpler yet risks improper certification. With a government-based certification, businesses must comply with whatever process is required, however complicated it may be. If a government certification process is required, the costs of compliance should not outweigh the potential benefits of participation such that exclusion of disadvantaged businesses occurs.

To facilitate certification, while simultaneously limiting the burdens on both the government and disadvantaged businesses, an intermediary that is an otherwise already regulated entity might make an elegant policy fix. Community Development Financial Institutions, for instance, which are mission-bound to serve low-income individuals and communities through financial services, might be well-suited to also certify disadvantaged businesses. Ceding authority to certify to an intermediary organization does come with some risks. However, the main risk is one of expanding policy making to nongovernmental organizations. Yet, given the history of failed implementation among governmental actors, perhaps looking for assistance outside of government is fruitful.

For instance, Small Business Administration guidance that has excluded small business within certain industries has had particularly negative impact on the Black business community. In 1966, for instance, the Small Business Administration advised area administrators to withhold start-up financing from small grocery, beauty parlor, and carry-out food shops.³⁰⁴ Businesses across industries have had access to Small Business Administration funds, both through 7(a) loans, and the recent Paycheck Protection Program. Some might view expanding preferences for disadvantaged businesses through a tax incentive as not necessarily advancing economic growth. However, the intermediary Community Development Financial Institution providing the certification could provide some assurance that borrowers are bona fide and not simply gaming the system.

2. Enforcing Anti-Discrimination Laws

Funds spent on affirmative action-type programs in government procurement far exceed the funds spent by the federal government enforcing anti-discrimination laws, including Title VII of the 1964 Civil Rights Act and Executive Order 11246.³⁰⁵ This, perhaps, indicates the importance of looking beyond enforcement of anti-discrimination tools to eliminate exclusion of disadvantaged businesses from otherwise well-intentioned laws. Yet, enforcing existing anti-discrimination laws in employment can serve a shared goal of ensuring fairness in the labor market. To the extent that enforcement actions further reduce exclusion in employment and in small business ownership, since those who are employed may eventually go on to own their own businesses, such actions ought to continue.

3. Equal Credit Opportunity Act

In the instance of exclusion from federally backed loans because of criminal history, one sword in the arsenal available to disadvantaged businesses is the Equal Credit Opportunity Act.³⁰⁶ To prevail in an action under the Equal Credit Opportunity Act, a plaintiff needs to show evidence of discrimination through any of three approaches: (1) direct evidence of discrimination; (2) disparate impact analysis; or (3) disparate treatment analysis.³⁰⁷ Since direct evidence of discrimination is difficult to come by, plaintiffs often rely on disparate impact analysis or the “effects test.” A disparate impact showing requires a prima facie case that defendant’s standards for extending credit to applicants result in a pattern that deviates significantly from that of the general pool of applicants.³⁰⁸ If the plaintiffs cannot make a prima facie case, the action cannot progress. However, if plaintiffs can assert a prima facie case of disparate impact, defendants can still protect themselves under the theory that the defendants’ practices have a manifest relationship to creditworthiness.³⁰⁹

Courts have upheld lender use of criminal history, for instance, in assessing creditworthiness for two reasons. First, regulations require the Small Business Administration to consider character, reputation, and credit history of an applicant in deciding whether to extend credit.³¹⁰ Second, courts have held that evaluating criminal history provides relevant information about an applicant’s creditworthiness, including judgment and character.³¹¹

Given the difficulty in asserting an Equal Credit Opportunity Act claim against an individual lender, businesses might assert an action against the Small Business Administration under the Act. A business or businesses could rest such a claim on the basis of disparate impact upon a showing that considering criminal history results in fewer loan dollars flowing to businesses that are owned by African Americans. The plaintiffs in Defy Ventures v. U.S. Small Business Administration³¹²469 F. Supp. 3d. 459 (D. Md. 2020). did not assert Equal Credit Opportunity Act claims in their complaint against the Small Business Administration for their denial of Paycheck Protection Program loans—rather, the plaintiffs relied on the Administrative Procedures Act.³¹³ However, the allegations and evidence presented about how African American and Latinx business owners are more negatively impacted by criminal history being considered in loan applications than White business owners might support Equal Credit Opportunity Act claims against the Small Business Administration.³¹⁴

C. Licensing

In addition to the proposed mechanisms discussed above, there are additional principles that lawmakers and judicial deciders should consider in regulating or licensing business activities when evaluating how the law excludes disadvantaged businesses.

1. Inclusivity, Access to Markets, Competition, and Avoiding Zombies

A number of recent scholars have argued for ways to rebuild democracy by understanding and shifting power.³¹⁵ In the context of how the law excludes certain businesses, there are a number of relevant principles. First, inclusivity as a principle is not only about protecting the rights of members of marginalized groups. Inclusivity has significance in terms of ensuring that all individuals have access and opportunity to participate in and benefit from the market economy. If individuals cannot participate and instead continue to be excluded then it is only reasonable for such individuals to pursue nontraditional means of participating in the economy, including informal and other means.³¹⁶

Second, free and fair access to markets, while related to inclusivity, is a distinct principle. Market access has to do with the ability of businesses to reach customers on a local and increasingly national scale. If barriers continue to prevent market entry because of factors such as lack of capital access, self-employed owners are doomed to less success than those with greater capital access.

Third and fourth are competition and the avoidance of zombie businesses, respectively—and these two principles are related and focus on the role of government intervention in the economy. The government’s role in ensuring robust competition between many small firms is a simpler proposition when there are in fact many small firms providing the same or similar services and goods. Government interventions in the economy mean that few companies thrive on extremely low credit access costs, while many small firms face significant barriers to accessing credit. Artificial support of zombie businesses threatens the stability of the economy and democratic participation through business ownership. Avoiding, or at least curtailing and setting reasonable limits on, government support for large businesses should be considered when lawmakers and judges enact and review economic development laws geared to support small businesses.

2. Correcting Past Exclusion: Sharing Power, Not Hoarding It

Whether one views the notion of correcting past exclusion through affirmative action in government procurement as important or not, one cannot avoid discussing the topic in considering how governments should frame laws to support disadvantaged businesses. A related principle has to do with sharing power and the means for achieving economic security. A property theory offers some support for advancing these principles in the connect of economic development and support for small businesses.

Professor Gregory S. Alexander has advanced a theory of property based upon human flourishing.³¹⁷ Alexander’s core claim in human flourishing theory is that the “vital purpose of property is to enable individuals to live a flourishing life.”³¹⁸ Alexander does not address business ownership specifically. Neither does Alexander apply human flourishing theory to the subject of this Article: avoiding laws that exclude disadvantaged businesses from competing for government support, capital access, and markets. Framing government intervention in a manner to avoid excluding certain deserving businesses on the grounds that such exclusion limits human flourishing may sound appealing. Exploring the theoretical connection between human flourishing theory and small business ownership merits further study and discussion.

Professor Timothy Mulvaney offers a view of property-as-society that combines both libertarian and pecuniary conceptions of property.³¹⁹ Such a view combines notions of property as freedom and control and property as a tool for economic investment.³²⁰ Conceiving of property as a means to avoiding exclusion among disadvantaged business owners could offer theoretical support to the implementation of new legal reforms to programs and institutions.

3. Economic Consequences and Externalities

Finally, one should consider the economic consequences and potential externalities of affirmative steps by government to avoid exclusion of disadvantaged businesses. In instances where private individuals are seeking to find ways to support businesses owned by disadvantaged owners, cities may benefit from explicit steps to remedy exclusion. For example, mayors may tout efforts to engage with businesses owned by Black, Indigenous, or People of Color as a means for growing local economies and spreading the benefits of open markets.³²¹

Conclusion

The author’s goal at the outset of this project was to study whether government procurement preferences resulted in greater small business ownership and financial success for women, African Americans, Latinxs, and business owners from other diverse racial backgrounds. While some research supports increased proportions of business ownership by marginalized groups following the implementation of affirmative action in purchasing programs, research in the area is still sparse. Although more study is needed, what became clear was that such programs were only a small part of a more insidious story. It turns out that otherwise well-intentioned laws designed to support small businesses in fact exclude the most disadvantaged ones.

To tell that story, this Article began by defining disadvantaged business as it is used in federal law and connecting businesses owned by disadvantaged owners and the racial wealth gap. Next, this Article introduced several examples of how economic development laws exclude disadvantaged businesses. Such examples included factoring criminal history into Small Business Administration-backed lending programs; procurement preferences in government purchasing; and recent efforts to include social equity programs in recreational cannabis licensure. Next, this Article included a study of current economic justice campaigns and suggests that these campaigns can—and in some instances already do—support legislation to avoid the exclusion of disadvantaged business. Lastly, this Article discussed incentives and enforcement mechanisms for remedying exclusion, as well as principles to guide lawmaking in this area.

Ultimately, it is not the role of government to put a thumb on the scale for certain businesses or industries. Similarly, it is not government’s role to exclude the most disadvantaged businesses for accessing markets and capital. In reality, however, the law does just that. In excluding disadvantaged businesses, the law limits economic growth and vitality. Such exclusionary acts are ripe for legislative and judicial curtailment.

Appendix: Economic Justice Campaigns

Organization (if any)	Campaign Name	Project(s) Targeted	Location	Campaign Objective
	Our HQ2 Wishlist	Amazon’s HQ2	USA	Amazon/Nationwide
Becoming Employee Owned	The Workers to Owners Collaborative	Employee- Owned Businesses	National	Employee
OWN Rochester		Economic Justice	Rochester	Employee
People’s Action	People and Planet First	Campaign	USA	Industry Focus
The Black Institute		MWBE	NYC	MWBE
Partnership for Working Families	We Make This City	Campaigns are launched across multiple cities (place-based)	USA	Nationwide
	Americans for Tax Fairness	Campaign	USA	Nationwide
	PrimedOut NYC	Opposing HQ2	Long Island City, NY	Particular Employers
Jews for Racial & Economic Justice	Neighbors Beyond Amazon	Campaign	NYC	Particular Employers
	For Us, Not Amazon	Campaign targeting HQ2 in VA	Virginia	Particular Employers
Our Revolution Arlington	Economic Democracy	Target local corporations in Arlington, VA.	Arlington, VA	Particular Employers
La ColectiVA	Amazon: Forgo Corporate Kickbacks From Virginia and Arlington County	HQ2 in Virginia	Virginia/Arlington County	Particular Employers
	St, Joseph’s Accountability Coalition	Economic Justice	Wisconsin	Particular Employers
Grassroots Collaborative	No Amazon Without Us!; Close the Loopholes	Amazon and Illinois State government	Illinois	Particular Employers/Public Budgets
Good Jobs First	Wal-Mart Subsidy Watch	Walmart Subsidies	USA	Particular Employers/Nationwide
	Bargaining for the Common Good Network	Economic Justice	National	Particular Employers/Public Budget
New Virginia Majority	Economic Justice Campaign	Economic Justice	Virginia	Particular Employers/Small Business
	Texas Forward	State budget	Texas	Public Budget
Keystone Research Center and PA Budget and Policy Center	Corporate Income Taxes	Overhaul PA state budget	Pennsylvania	Public Budget
	Redlight the Gulch	Atlanta Gulch Project (apartments, offices, retail, hotels)	Atlanta, GA	Public Budget
Georgia Stand Up	Redlight the Gulch	Atlanta Gulch Project	Atlanta, GA	Public Budget
Kentuckians for the Commonwealth	Campaign for Our Commonwealth	Economic Justice	Kentucky	Public Budget
One Northside	Economic Justice	Economic Justice Campaign	Chicago, IL	Public Budget
Fair Economy Illinois	People and Planet First Budget for Illinois	Campaign	Illinois	Public Budget
Reinvent Albany	Business subsidies should be transparent, clean, sensible	Transparency in government	New York State	Public Budget
Community Labor United	Campaigning for the Public Good	Economic Justice	Massachusetts	Public Budget
ACRE Action Center	Refund America Project	Economic Justice	National	Public Budget

Category: Print Issues

Excluding Disadvantaged Businesses

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