COLUMBUS, Ohio – For the first time, Ohio has met its goal for purchasing goods and services from minority-owned businesses.
A report released Thursday shows the state purchased a record 19 percent of eligible goods and services through minority-owned businesses in fiscal year 2015. The results exceeded the 15 percent target the state set for itself in 1980 as a way to encourage small businesses and ensure fair purchasing practices.
About 17 percent was specifically set aside for minority businesses, while the remaining 2 percent came through open market contracts. Spending on the goods and services came to $228.5 million.
Besides exceeding the goal for the state, the report showed Ohio cabinet agencies set an aggregate record for the percentage of spending going to minority-owned businesses, as did state boards and commissions.
To be eligible for the program, 51 percent or more of a business must be owned by a minority.
Barbara Rath said the program has given her materials-supply business opportunities it wouldn’t have had otherwise. Rath Builders Supply is both a Native American-owned and a woman-owned business.
Rath, president of the Defiance-based company, said she and her two sisters started the business in 1986 as a spinoff of a construction company led by their father and brothers.
“A lot of times, a manufacturer would bypass us as a distributor,” she said. “But by having the goals on these jobs then we get to participate in the sale which then, in turn, gives us a livelihood and then we’re able to provide jobs for other employees, and we’re paying taxes and generally just supporting our state.”
Gov. John Kasich was a young state senator who voted on the 1980 law that created the Minority Business Enterprise. He said he never expected it to take so long to hit the target.
“By making this a priority, we are now able to help more small businesses from all backgrounds take part in our state’s economic success,” he said in a statement.
Ohio House Democratic Leader Fred Strahorn said hitting the benchmark is a positive step, but there’s still work to be done in Ohio’s minority communities.
“Indeed, let us not forget that many African Americans and other minorities continue to struggle in the face of poverty and unemployment,” he said in a statement. “The unfortunate reality remains that the African American unemployment rate is more than double that of their white counterparts, and almost one in every three minorities continue to live in poverty.”
Ohio’s accomplishment comes as other states are acting to increase the share of state contracts that go to minority- and women-owned businesses. New York surpassed its goal of 20 percent in that arena, and Gov. Andrew Cuomo announced last fall the state would set a new target of 30 percent, which experts say is the highest in the nation. Maryland increased its goal to 29 percent in 2013.
Greg Williams, deputy director of the Ohio Department of Administrative Services’ equal opportunity division, cautioned that not all such goals can be compared. New York’s 20 percent goal, for example, included both minority- and women-owned businesses.
Mark Weisenburger, who oversees sales and operations for Peak Electric, a minority-owned electric supplier in Toledo, said the Minority Business Enterprise program has given the small company leverage with manufacturers – say, Siemens, Cree or Hubbell – interested in selling their products on a statewide level.
“I really don’t think we would have had that opportunity without being an MBE and being MBE-certified, and the push from the state not only says this is a direction we’re going in, we’re sticking to it. They’ve been great about that,” he said. “It’s one thing to say we want X participation but it’s another thing that it actually happens.”