How Wisconsin steered federal pandemic relief to support small business
Spending on economic development and Main Street stands out from other states
Gov. Tony Evers announcing state Workforce Innovation Grants in Eau Claire in December 2021. The grants are among more than $1 billion given to support individual business and economic development from Wisconsin's share of federal pandemic relief funds. (Photo courtesey of University of Wisconsin-Eau Claire)
When COVID-19 hit Wisconsin in March 2020, Amy Trimbo was operating a sewing services business doing garment repairs out of a storefront in Washburn. She pivoted to making cloth face masks in response to the pandemic.
Soon she needed to expand and moved into vacant space in the building. It was a dicey time for many small business owners, though. She knew that mask-making would be just a temporary line, but what would come next wasn’t certain.
“It’s hard to start a business around a product that you know the demand for it is going to go down,” she says.
Help came in the form of a Main Street Bounceback grant from the Wisconsin Economic Development Corporation (WEDC), which provided funding for small business moves and expansions during the pandemic. “It was a really nice boost to be able to do the things that we wanted to do and needed to do,” Amy Trimbo says.
Her husband, Jared, had given up his job as a server in the early pandemic shutdown that closed the bar and grill where he worked. He stayed home with the couple’s children.
But by the following year he was ready to go back to work, this time in business for himself, opening a coffee roastery in the same building as Amy’s shop. Jared, too, got a Main Street Bounceback grant to help with remodeling and purchasing inventory. “I had to buy $5,000 worth of coffee beans just to get started,” he says. The grant “took a little bit of the risk out of it in such a risky time.”
More than any other state, Wisconsin has used its federal pandemic relief funds to help support small businesses weather the economic storm clouds seeded by COVID-19.
Out of the state’s combined pandemic relief allocations — $1.9 billion from the 2020 Coronavirus Aid, Relief and Economic Security (CARES) Act and $2.5 billion from the 2021 American Rescue Plan Act (ARPA) — Wisconsin has spent $1.3 billion on direct support for business, primarily small business. That includes more than half of the state’s ARPA allotment, the Center on Budget and Policy Priorities reported in September.
It’s a record at odds with what became a recurring attack on Gov. Tony Evers during the 2022 campaign that ended with Evers’s reelection last week: the Republican claim that he bungled the pandemic and turned his back on business.
Milwaukee restaurateur Melissa Buchholz never accepted that claim.
“We think Evers has navigated our small business community through incomprehensibly rough waters and created programs to help support us in our time of greatest need,” says Buchholz, who accuses GOP lawmakers of obstruction and being “willing to let businesses fail” over the last three years. “Evers was the one who came through and helped.”
Small business a priority
Small business support was a priority from the start of the pandemic, says Missy Hughes, secretary and CEO of WEDC. Early on, a state health order closed many businesses in an attempt to curb the spread of the virus, and even after the Wisconsin Supreme Court canceled the order in May 2020, many businesses remained closed or saw their traffic slow drastically as people continued to avoid crowds.
According to Hughes, WEDC saw that cafés, restaurants, hair salons and other establishments where people typically gathered would be the most vulnerable in that uncertain time.
“We really thought that those businesses were going to take almost the full brunt of what was happening with the pandemic,” Hughes says. “And we also recognized that those small businesses, the micro-businesses, were going to be challenged in accessing the federal dollars that were coming, like the Paycheck Protection Program.”
WEDC put $5 million from its existing budget into helping small businesses. When the CARES Act funds started arriving, and a year later the money from ARPA, Evers “really felt that it was a priority to help support those small businesses, because we could really deploy those dollars far and wide,” Hughes says.
Some of the first investments were to help businesses acquire personal protective equipment (PPE) and reconfigure their operations to encourage social distancing among customers and employees. The Main Street Bounceback program followed the next year with $10,000 grants for businesses that were moving into vacated spaces in downtowns all over the state.
“Imagine on a Main Street, you’ve got two small businesses that survived the pandemic, but there’s four empty spaces on either side of them,” says Hughes. “It’s hard to have a vibrant feeling for a Main Street if you’ve got a bunch of empty storefronts. The Main Street Bounceback program is dedicated to filling those spaces.”
So far some 7,300 businesses have started or relocated across Wisconsin under the program, with all 72 counties involved, she says. According to data from the Wisconsin Department of Financial Institutions reported by WisBusiness in June, new business formations rose 42% from 2019 to 2021.
Hughes says the strength of Wisconsin’s manufacturing sector and its agricultural base made it possible for the state to devote as much as it did to smaller businesses. “We were able to do that because we didn’t need to prop up other things in the process,” she says.
Focus on diversity
In addition to WEDC programs, the Department of Administration (DOA) has managed a dozen different grant programs funded by the CARES Act and 20 funded by ARPA. The department also established a website that lists all of the state’s pandemic-relief-funded programs, including those for public health, community and nonprofit organizations as well as business grants.
DOA-managed programs include those for tourism businesses and destination marketing to live event venues and summer camps. Other programs provided funding for financial and business development for minority-owned, women-owned, and rural small businesses.
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“When we looked around the state to see who was hit hardest by the pandemic, we really wanted to make sure that the money created a Wisconsin that works for everyone and an economy that works for everyone,” says Kathy Blumenfeld, the DOA secretary-designee.
Shawn Phetteplace, Midwest manager for Main Street Alliance, a small business organizing group, says that from the national organization’s entry into Wisconsin, Alliance leaders have gotten the ear of the Evers administration. The live event venue grant program was proposed by members of the organization, he says, and he credits it with helping to save more than 200 venues across Wisconsin.
Phetteplace says the administration was also responsive to the organization’s emphasis on the need to help diverse small businesses owners who are Black, indigenous or people of color. Those small businesses “had received the least amount of support from federal and state programs, and it was essential that the administration made it a priority,” Phetteplace says. “They came through with over $80 million in grants.”
The state’s focus on business support also includes programs that go beyond individual businesses.
There are $130 million in grants for workforce programs underway that aim to address the looming gaps between the hiring needs of employers and the challenges that prospective workers face, whether needing new job skills, facing gaps in transportation, child care or housing, or because of other personal circumstances such as having a disability.
The workforce grants are “putting a marker down on the future,” says Hughes. “We have a limited number of people, but within that limited number of people we have people who aren’t working to their full ability or their full capacity through no fault of their own.”
Even programs that don’t strictly fall under the list of business support have implications for business more broadly. Brenda Moore Fritz, a Mount Horeb child care provider, says grants distributed through the Department of Children and Families helped her center keep staff and manage through a time of grave uncertainty at the height of the pandemic. That in turn helped parents keep working who might have been unable to otherwise.
“I felt like the state really emphasized and looked at the importance of who and what child care is in our economy,” Moore Fritz says.
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