U.S. Sen. Bob Casey, D-Pa., has urged the U.S. Small Business Administration to maintain Monroe County's status for qualified small businesses to receive preferences in filling government contracts.
The SBA says the final decision on keeping Monroe as a Historically Underutilized Business Zone is out of its hands and subject to a legal formula tied to new U.S. Census data to be released in October.
Local business leaders and elected officials recently expressed concern the county could lose the HUB Zone designation.
"Such an outcome would be devastating in a county that has yet to fully recover from the economic downturn," wrote Casey in a letter to SBA Administrator Karen Mills. "This designation has been key to promoting economic growth in the Pocono Mountains and its continuation is crucial to spurring an economic recovery in the county."
About 100 businesses in the county benefit from the designation, Casey said. Qualified businesses receive 10-percent price preferences in bidding for government contracts. The federal government has a goal of awarding at least 3 percent of all money for its prime contracts to HUB Zone qualified small businesses.
To qualify, the majority ownership of the business must be U.S. citizens or interests, its principal office must be within the HUB Zone and at least 35 percent of the workforce must live within the zone.
HUB Zones are awarded to areas based in part on high unemployment rates, low median household incomes and other negative economic factors. Monroe County's jobless rate exceeds state and national rates, but might not be high enough to keep the HUB designation when official 2010 census statistics are released in October.
Small Business Administration spokesman Michael Stamler said Monroe County's eligibility was extended until October, despite appearing to lose eligibility, pending the new official census results. Any additional extension would require a change in law, Stamler said.
Pocono Mountain Industries Executive Director Chuck Leonard said local officials convinced SBA to temporarily extend the designation partly by pointing to the 20 percent-plus of the workforce that commutes to other states, at additional cost to household income. Commuting costs aren't part of the official formula.
The HUB Zone program has helped keep small businesses in Monroe County, said Leonard, whose agency promotes job creation here.
"It is a useful tool and it has allowed our disadvantaged industries to compete for some of these contracts," Leonard said. "Many of these businesses are small and very mobile. There is a danger (losing the designation) could cause us to lose some companies."
Casey also points to Monroe County's high commuter costs — and wage disparities between those who commute long distances and those working within the county — as reasons to extend the HUB Zone designation.
"In many cases, these commuters earn wages that are much higher than those earned by individuals who are employed in Monroe County," Casey wrote to SBA. "The commuter population also skews the county's unemployment rate. The unemployment rate for the non-commuter population is much higher than the county's current rate."