August is Black Business Month, a designation that is especially important this year as businesses continue to recover from the pandemic and deal with challenges brought on by inflation.
Assembly Majority Leader Crystal Peoples-Stokes, who has been a champion of equitable opportunities for people of color, spoke with Capital Tonight about some of the challenges Black business owners have been facing, especially those with Minority & Women Owned Enterprise (MWBE) status.
“Minority businesses, particularly businesses owned by Black and brown people, were excluded (from doing business with the state) for a number of years. So, in order to get some equity around that issue, MWBE laws were created some years ago,” she explained.
Just in 2021, $3 billion was spent by the state of New York with MWBE-certified businesses.
“At one point, we were at 12%. Under the former governor’s term, we went up to 20 percent. And now we are up to 30.5%,” Peoples-Stokes said of the percentage of MWBE utilization in state contracting.
But fraud has become an issue in the program.
“The biggest problem we have now is fraud,” she said. “Not because minorities are creating fraud, but because other people are using the guidelines to fit themselves in where they shouldn’t be.”
In other words, some businesses registered with the state’s MWBE program are not actually owned by women or minorities, or they are only figureheads.
The issue prompted Peoples-Stokes and Senator Jamaal Bailey to draft legislation that would enable the state to root out fraud and abuse in the MWBE system.
“(The bill) adds severe penalties for people who would abuse the legislation and it creates a fund to help support the necessary internet-based research centralized registry so that there is a registry of certified businesses and you don’t have to wonder who’s certified,” Peoples-Stokes explained. “You can go to a central location on the internet and determine who is eligible to work on your project.”
The bill is awaiting the governor’s signature.
Peoples-Stokes also wanted to acknowledge the number of Black-owned businesses that have opened in her district over the past few years.
“Since COVID, just in the city of Buffalo alone, I’m not sure how it’s reflective in other communities, but there have been more Black businesses that have opened in and around Buffalo since COVID that I can remember in recent history,” Peoples-Stokes said. Many in the cohort aren’t seeking certification from the state of New York for MWBE-status. They are people who just decided to go into business for themselves. “(And) in many cases they are doing very, very well,” she said.