Hearing of the Senate Small Business & Entrepreneurship Committee - Opening Statement of Sen. Rubio, Hearing on Liberty City Rising: Achieving Upward Mobility through Small Business and Community Partnerships

Hearing

Welcome to today's Senate Committee on Small Business and Entrepreneurship and I'm very happy to be able to do it here at home and here at the heart of Liberty City... I want to thank all of our witnesses and I want everybody to understand that the record. This committee has numerous members, bipartisan committee, obviously. The testimony here becomes part of the record, which then becomes part of our work, members, staff will look at that and we'll use it to justify and to point to as the reason why we need to certain things, and the laws we're going to be thinking about doing.
"So my number one priority as the Chairman is to pass bipartisan legislation, which in the Senate if it's not bipartisan it's very difficult to pass anything. But bipartisan legislation that is going to expand economic opportunities for small businesses and for entrepreneurs who are forced to take on personal risk and sacrifice to compete in the global marketplace.

"Now entrepreneurship relies on ingenuity, it relies on innovation, and it also relies on access to capital. If you don't have access to money you can't start businesses. That's a huge challenge for a small business, and for a small business to be able to compete and to thrive it must have access to markets, it has to have access to funding, it has to have access to a workforce, people who can work there. These are enormous challenges, big companies can afford all of this, and it is why you have seen growing consolidation of business activity at the expense of small business activity. And I can just tell you I have nothing against big businesses but they are no replacement for small businesses, cause small businesses are rooted in the community. They are from the community, they hire people from the community. The leader, the founder, the president of a small business, is likelier to be your PTA president, your chamber of commerce president, involved in your community than some large chain. And so that's why were so deeply committed to doing everything we can to get small business activity going in this country and focused in the right places.

"Inherently, when you start a small business you're growing jobs, you're growing opportunity. And when these are done successfully, then that's when upward mobility becomes possible.

"The issues of upward mobility in South Florida is close to home for me , and that's both geographically and personal. I was born, raised most of my life and still reside, about 30 minutes from here, at this time of day, maybe, and I don't know how much in tolls, that's another topic, but about 15 minutes or 20 otherwise, and so I'm acutely aware of this community, and everyone identifies this community with shining buildings and beautiful access to the ocean and all the fun things there are to do here. All of that is true, what I try to explain to people about South Florida is that just a few blocks from some of these landmark internationally recognized buildings and activities are people who are really struggling for a lot of different reasons. And so I hope that we can find a way, not just for the help the families of Florida, but across the country to have the ability to build better lives for themselves and for their loved ones. And I truly believe that, that begins with dignified work. Work is not just about a paycheck, work is about the dignity that comes attached with the fact you get up in the morning and that your efforts are rewarded and with that it feeds the human soul and the lack of access to dignified work has the reverse effect. It's corrosive to the individual, ultimately to families and then to communities. I believe our economic policies should be anchored first and foremost in the creation of dignified work. You can't have it without economic growth, you can't have it without prosperity, but the goal of that prosperity and that growth should always be to provide our people the opportunity to acquire dignified work, and small businesses are an incredible engine for that.

"And it's reflected in the policies we've to pursue, for example, the increase to the Child Tax Credit, we didn't get there all the way but we got a lot and this year millions of American families will have more of their own money. This is their money. In their pocket. Particularly lower income Americans who are working and whose primary tax liability is the payroll tax. Everybody pays the payroll tax, and more and more American families are going to have that money left in their pocket, because I don't need to tell people in South Florida, raising children is more expensive than it's ever been, there are more costs than ever and everything costs more.

"We are also working in a bipartisan way with Congresswoman Wilson on enhancing safety standards at HUD assisted housing. It's great to have facilities that obviously from a physical structure perspective are appropriate. But they also have to be safe. You can't prosper, you can't have upward mobility if you can't sleep at night, because you're worried about the gunshots, you're worried about your children even being outside, you're worried about the violence and the security standards are not in place. So we really want to continue to press HUD to ensure that both the funding and the requirements are in place so that people living in HUD assisted housing are living in a safe environment.

"We also want to deal with the regulations that have an inordinate impact on small business. Big businesses hire these large law firms that help them navigate this stuff and accountants that help them find loopholes. Small business are stuck. So we all agree we need to have regulations that keep us safe and keep it fair. But when those regulations become an onerous cost of being in business small businesses really struggle because they just can't afford the lobbyists lawyers and accountants to figure their way through all of this, and that's what we've pushed our agenda here to do.
"Being here today is an honor, Liberty City has a long, proud, and yet a complicated, history. Something I don't need to tell people here today, but my colleagues need to know, and it needs to be in the record. In recent years, Liberty City has been characterized as a community that suffers with poverty, and schools that have struggled, and majority single-parent households, and a declining workforce. However, however, history tells us this a community that not that long ago, was a thriving community of entrepreneurs with economic opportunity with strong families. I think those virtues, those values, and those ambitions still remain in the heart in the soul of the people who live here. It was built during the New Deal as one of the first housing projects in the South, It was the home, as I said, of a thriving African American middle class. And when the I-95 expressway was built in the 1960s, the landscape of this community changed and so did the socioeconomics.

"Obviously we've seen what's happened since then, the economic opportunity's disappearing, and too often being replaced with gangs and drugs and violence. And despite that the resilient families who still live here, and are raising their children, and are finding their way forwarded, they're incredible success stories. This is a resilient community it's made incredible contributions. Individuals who grew up, and were raised here, have gone on to do extraordinary things. On behalf of our county, our city, the state of Florida. Obviously a recent, maybe some of you have seen the series on Starz on the Warriors, which is a program we're familiar with because my own sons participation in youth football, our record wasn't very good against them. But it just highlights the extraordinary success stories that have emerged despite all these challenges from this community. I think it's also the home of the Bulls, is that right Dorothy? Alright, well I don't want get into the football rivalry, I saw them, they were up in Orlando this year, they did very well. But Booker T's coming back, they'll have a good year this year. Okay. Right? You have both of those in your district? Okay, I don't want to put you in a tough spot.
"So what is the thing that turned the community around? That is what we are here to find out about. I have a thoughts coming in but I can tell you it is going to take a combined effort, a partnership of local, state, federal, school board, elected officials, community leaders and of course, the residents. We shouldn't be in a position of telling people what they need, we need to be in a position of giving people the opportunity to tell us what needs to happen. And I want you to know, that does happen. Last year, we were in South Florida, in Broward and Palm Beach, and we heard about a local problem with sober homes, where people were opening up these fake rehab centers and it was undermining the community and we were able to take that local concern and turn it into federal legislation. And that is what we are hoping to do here today.

"With that, let me just give you my one thought. This is about upward mobility. But often times, upward mobility means the people living there have to move out, yes, tax changes or something happen and there's investment in a community, but then it gets too expensive for the people who are living there to stay. Or the housing is replaced by something else. We are not here to talk about upward mobility in that sense. We're here to talk about an upward mobility that belongs to the people who are here, that this can continue to be home, that people don't have to find a way to move out, because frankly, there is nowhere to go. There is no other housing options, and plus this is a community that belongs to the community. So we are not here today to promote gentrification, we are here today to try and figure out what we can do at the federal level to promote upward mobility for the men, women, children and families of Liberty City. What can we do in federal policy to work alongside our local and state officials to make that happen.

"It's my hope that this hearing today will highlight the impact that small businesses, and entrepreneurs and other community stakeholders can have to help this community achieve that. Because like I said, small business is rooted in the community. When the small business owner grew up in the community, lives a few blocks away from the business, they're going to hire locals, and they are going to be contributors to local partnerships and local organizations. There is no way-- we are grateful to the big businesses that give the big checks to the organizations once a year, there is nothing wrong with that-- but we understand the intrinsic value of businesses that are deeply rooted in the community that they work in and serve.

"In 2017, there was a provision in the tax law that created Opportunity Zones. This law, which was championed by my good friend, Senator Tim Scott of South Carolina. That law is going to encourage investment in communities such as this. It will allow investors to defer certain taxes on income when they choose to invest in qualified areas like Liberty City. But it's important that that be done in a way that's long term and doesn't force out the people that are here and the opportunities for locally based investment.

"We've experienced that firsthand here in South Florida. As mentioned in the outset, the disparities in Miami are a testament to the uneven prosperity of globally driven rapid growth of a 21st century economy. This new economy has been very good for a lot of people, and God bless them, we're not against them. But it has left some people behind. And that is what we need to figure out how we can balance out.

"And that is where the Opportunity Zones can come in, if appropriately used as a tool. When investors in a global economy, there always seeking better bottom line by taking jobs and sending them somewhere else, maybe another country. We want to see that happen instead of sending those jobs to another country, being able to bring those jobs to the communities that have been left behind by the 21st century economy.

"And one of the things that this law does to prevent that from being short-term thinking like how can I get somewhere and maximize my gains and then move on somewhere else is you have to hold the investment for at least ten years. You don't get this benefit unless you are anchored in for at least ten years, that's not a long time and we want this to be permanent, but if you can anchor someone down in ten years they're probably staying, especially as the roots grow deeper.

"By the way, and I already highlighted this, Congresswoman Wilson and I, who will be here later, have sponsored two pieces of bipartisan legislation. The first is Liberty City Rising Act. What it does is it increases the safety standards and prioritizes funding for additional security measures at public housing projects located in areas that statistically have suffered from high-crime.

"We introduced the Safe Temperature Act to allow HUD to require air conditioning units be installed in properties located in very hot places. Miami's a very hot place in July, it's okay right now too, especially if you live in Chicago and it's 74, it's cold up there. But no family, particularly no child should be forced to live in a home that does not have air conditioning, and the temperatures are over 100 degrees.

"Last year I had a bill called the Spurring Business in Communities Act that was signed into law. And this encourages the creation of new Small Business Investment Companies, we're going to hear more about that today, but encourages setting them up in under-licensed states, and Florida is an under-licensed state. This will encourage more private-equity investment to fund small business entrepreneurship and innovation, particularly focused on left behind communities like Liberty City has been, and we've talked about that on the outset one of the biggest impediments to small business formation, is you need money to make money sometimes, you need money to start a business, this will hopefully drive more of that investment in that direction.
"These are a few measures that we can do at a federal level, there's probably more that needs to be done. These are very useful to us because it allows us to come up with ideas that we wouldn't otherwise have thought of, because like I said, there is a lot of technological advances, shifting economic trends globally, but we have to fight to remain economically competitive, and that begins with our people. And we are going to work with our colleagues to make sure that we see this through.
…

"Our goal here is not just to figure out how to redevelop, you can redevelop a community, you can attract investment but we want to do it in a way where families that are already here can stay. Where their kids when they graduate from college don't have to move to Atlanta or move to Chicago or move to Washington in order to have opportunity they may choose to do so but because they chose to, not because they have to. We want to figure out how that investment can be geared at rebuilding the community not transforming it in a way that people have to leave, and that's been a challenge, redevelopment largely in the country has meant the people who were there have to go because we're going to put expensive condominiums or so forth, so we do want to focus on that. And I'm really happy that you mentioned something that I touched on but didn't get into the detail you did, and that is - it wasn't always this way, and the same could be said for Overtown by the way, these were thriving communities, that were in many ways models of extraordinary success.
And there are people still around today that remember that time, and that were key instruments of it, and your own family's experience of owning a small business, while I don't know all the details, your customers, maybe the employees were from the community, so the small business was rooted in the community, not just located in the community because there's a difference between being located in the community and rooted in the community, and that's what we're hoping to achieve."

Source