By OBBM Network Editorial Staff

Derived from an episode of On Main Street.

Mayor Zoran Mondami’s latest grant strategy is turning heads: instead of handing cash directly to individual shop owners, his office is awarding funds to merchant groups that manage entire commercial corridors. The shift has ignited a heated discussion about who truly benefits from public dollars.

Why the Grants Matter to Small Businesses

According to Lloyd Chapman, founder and president of the American Small Business League and the Don’t Cheat Women Project, the policy “affects non‑union businesses and women‑owned businesses” because it concentrates resources in larger associations rather than the storefronts that employ local workers. Chapman argues that direct assistance to individual entrepreneurs is a more reliable engine for job creation, especially in neighborhoods where small, family‑run shops dominate the economic landscape.

Amato concurs that “any money that’s directed towards small business or small business groups, I’m in favor of it,” but he raises a cautionary note about the potential for larger entities to capture funds meant for the smallest operators. He points to a historical pattern where federal contracts intended for small firms end up with Fortune‑500 companies, a practice he describes as a “problem” that has persisted for decades.

Federal Contracting Trends and Job Creation

The conversation pivots to the broader federal arena, where President Trump’s first‑day executive order reduced the contracting goal for minority‑owned small businesses from 15 % to 5 %. Chapman notes that this cut “killed about a million jobs that year,” citing a Senate Small Business Committee study that found each 1 % increase in small‑business contracts generates roughly 100,000 jobs annually.

Both guests emphasize that small businesses are responsible for more than 95 % of net new jobs in the United States. By contrast, they highlight a government accountability office report showing that 95 % of federal spending goes to the top 0.1 % of firms, many of which have not created new jobs since the 1980s and 34 % of which pay no taxes. The disparity underscores the argument that directing funds to truly small, locally‑based enterprises could reverse job‑loss trends, especially as automation and AI threaten millions of positions.

Regional Comparisons: New York vs. California

Amato expands the discussion to the West Coast, noting that Virginia receives ten times the federal contracts of California despite having a fraction of the population. He argues that “California should get a more equitable share of government contracts,” suggesting that a fairer distribution would boost state tax revenues and address the state’s high unemployment rates.

He also references the upcoming California gubernatorial race, noting that Republican candidate Steve Hilton and Democratic candidate Javier Becerra could influence the state’s approach to securing federal dollars. Chapman adds that California’s high cost of living and unemployment rates make targeted grant programs especially critical for the state’s economic recovery.

Policy Recommendations and Legislative Efforts

Chapman reveals he has drafted legislation to raise the federal goal for women‑owned small businesses from 5 % to 15 %, a change he believes could create “about a million jobs a year.” While the bill is still pending, the proposal reflects a growing bipartisan consensus that more inclusive contracting can stimulate broader economic growth.

Amato underscores the need for state‑level action, proposing that California enact laws to prioritize in‑state vendors for state purchases, thereby keeping tax dollars within the state and reducing reliance on out‑of‑state suppliers. He cites past attempts with former Senator John Burton to curb external spending, noting that “it just doesn’t make sense” for California to buy billions of dollars of goods and services from elsewhere.

Both guests agree that a shift toward localized, small‑business‑focused grant and contracting policies could address job losses, promote equity, and strengthen community economies across the nation.

In sum, the debate over Mayor Mondami’s corridor grants reflects a larger national conversation about how best to allocate public resources to support the backbone of the American economy: small, locally‑owned businesses. As policymakers weigh the merits of association‑based funding versus direct aid, the outcomes will likely influence job creation, tax revenue, and community vitality for years to come.

The full episode of On Main Street is available on OBBM Network TV.