Why big win for LGBTQ+ businesses (expected Monday) is big win for state’s economy

Becoming 1st state in nation to codify certification of LGBTQ+ companies could help New Jersey get larger share of trillion-dollar piece of national economic pie

Bills that will make New Jersey the first state in the country to codify the ability to certify LGBTQ+ businesses are expected to easily pass the state Senate and General Assembly on Monday, on their way to being signed into law by Gov. Phil Murphy.

To be sure, the movement to codify Executive Order 295 is a societal win for LGBTQ+ businesses, which obviously have long wanted such basic recognition — which is no different than certification for minority-owned, women-owned and veteran-owned companies.

Such certification will enable LGBTQ+-owned businesses to have greater opportunities for funding and state contracts reserved for minority-owned companies.

Gus Penaranda. (File photos)

But the passage also is a big win for the state’s economy. In fact, the only thing unclear is how big, as the state certainly will benefit tremendously.

It is estimated that LGBTQ+ businesses account for $1.7 trillion in economic output in the country — but all involved are sure that the number is low, as most businesses around the country get virtually no benefit (and plenty of potential harm) for announcing such a status.

Having New Jersey be the first could be a reason for more LGBTQ+ businesses to set up shop in the Garden State.

That’s the way Gus Penaranda, the executive director for the New Jersey Pride Chamber of Commerce and one of the biggest advocates for A3330 and S1313, sees it.

“Being the first state to officially recognize LGBTQ+ business is hugely important,” he said.

Sen. Nellie Pou.

“We want to make sure that New Jersey becomes a beacon and a destination for the millions of dollars that are contributed to the U.S. economy to employ New Jerseyans, to pay into the state revenues and to participate in the economic growth of this state.”

Penaranda said many LGBTQ+ companies around the country are looking for a new home.

“I know there are companies in red states that are looking for a destination where they can exist as an LGBTQ business and not be singled out — or held back — for who they are,” he said.

The bills, sponsored by Sen. Nellie Pou (D-Paterson) and Assemblyman Benji Wimberly (D-Paterson), on Thursday passed through a Senate committee unanimously and an Assembly committee, 9-2 — indicating their widespread support.

That support also was shown by the governor, who made a rare exception to his policy of not discussing legislation until it is passed by issuing a statement through his chief spokesperson, Natalie Hamilton.

“In May of 2022, Gov. Murphy proudly signed Executive Order 295 instructing the New Jersey Department of the Treasury to establish a state-backed certification program for LGBTQ+-owned business enterprises,” she said.

Asm. Benjie Wimberly.

“The governor is encouraged by continued efforts to ensure the success of these enterprises by enhancing their visibility, providing them with an extra layer of authenticity in their business ventures and demonstrating that they are welcome and vital participants in our economy. The governor looks forward to reviewing any legislation that comes to his desk that continues to enable the certification of businesses as LGBTQ+-owned and supports the endeavors of entrepreneurs from a historically underrepresented community.”

Codifying the certification also would make it more difficult to take away the provision down the road — something that is easier to do when it only exists as an executive order.

Penaranda, who testified before both houses, said the potential impact cannot be overstated.

“Now, LGBTQ-owned businesses can more easily bid on state and local contracts, because they’re certified, and they can apply for more grants through the EDA,” he said.

“When you apply for a grant, if you’re certified as a minority- or a woman- or a veteran-owned business, there are additional benefits that you can get to level the playing field.”

Lauren Albrecht, the director of advocacy and organizing for Garden State Equality, testified that the impact will be felt in a number of ways.

A big one is this: As a certified business, LGBTQ+ firms will now be eligible for a permanent spot on the state’s “Selective Assistance Vendor Information” database, better known as SAVI.

Being certified on that list helps LGBTQ+ businesses become eligible for more opportunities in a number of ways. For instance, if a particular company chooses on its own to ensure that a certain percentage of vendor contracts go to certified companies, LGBTQ+ firms will not be eligible.

“The economic disparities faced by our LGBTQ community are formidable and far-reaching,” she said. “Becoming eligible for all provisions provided for businesses eligible for the Selective Assistance Vendor Information database will greatly assist in closing the economic gap for LGBTQ-owned businesses and thus improving outcomes for LGBTQ entrepreneurs and our community as a whole.”

The bills are expected to be voted on by the full chambers Monday.

It’s one of the reasons Pou, chair of the Senate Commerce Committee, has pushed hard for her bill.

“Businesses owned in whole or in part by LGBTQ+ individuals located in New Jersey are a vital part of our economy and add to the rich commercial diversity that is part of our shared social identity,” she said. “This legislation reaffirms the significant role those businesses play, and will continue to play in the civic, social and economic future of our state.”

Wimberly said he eagerly awaits a history-making vote.

“Should this legislation be enacted, New Jersey would become the first state in the nation to establish a statewide Minority/Women Business Enterprise certification process for LGBTQ+ businesses under state law,” he said. “I am honored to sponsor this impactful measure for our LGBTQ+ business owners, providing them with the recognition they deserve.”