Tax certificate still viewed as fix for minority broadcasters

Story by Inside Radio

It has been nearly two decades since the minority tax certificate program was abolished. It’s credited with helping grow the number of women- and minority-owned stations during its 17 year existence, and for that reason it’s never far from discussion at the Minority Media and Telecommunications Council’s annual Access to Capital conference.

Marie Johns, a former Small Business Administration official in the Obama administration, thinks there should be an increased focus on entrepreneurship to bring more minorities into high-growth sectors like media – but said there’s no one magic bullet to address the issues of too few owners. “We have to think about changing strategies and tactics to make sure we are addressing the issues before us,” Johns said.

Former Florida Republican congressman Cliff Stearns said that could mean looking at different ways to expand the tax certificate policy beyond just those who sell a station to a woman or minority broadcaster. Stearns suggested giving venture capitalists tax breaks on the capital gains they net from investments in minority-owned businesses. He also threw his support behind bills introduced by Rep. Patrick McHenry (R-NC) that would allow crowd-sourced funding for minority entrepreneurs. Stearns said something must be done because many banks are “fearful” that if they make too many loans, federal regulators will step in and make them raise more capital because some of their loans are deemed high-risk.

But the tax certificate seems just as far away as it did at the last MMTC event one year ago. “Unfortunately in recent times here in Washington we have seen a lack of support for programs designed to increase minority ownership in broadcasting – not to mention programs that need to be created to get us into the new technologies,” National Association of Black Owned Broadcasters executive director Jim Winston said.

Yet getting anything through a gridlocked Congress – even something like tax breaks that have bipartisan support – could be tough. “It’s as bad as it looks and probably worse,” Rep. G.K. Butterfield (D-NC) said of the Washington standoff. Instead, he suggested the focus be put at the agency level where policies can be more easily changed. “Outdated regulations are not beneficial to industry and it’s the American people that ultimately pay the price of burdensome rules,” he said.