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Council to consider equitable funding levels for minority chambers of commerce

Thursday, March 17, 2022 by Chad Swiatecki

The city appears to have struck a bargain with four niche chambers of commerce to more equitably distribute each of their annual funding allocations from the city budget.

Discussions have been ongoing for years about how to “normalize” the city’s funding for the Austin LGBT Chamber, Greater Austin Asian Chamber, Greater Austin Black Chamber, and Greater Austin Hispanic Chamber of Commerce because there was no data-driven approach for setting the funding for each group. Instead, for years the funding was set based on informal meetings with City Council members, resulting in some groups’ amounts varying greatly from one year to the next.

A memo released Tuesday spells out the annual funding recommendations for each group, as well as how they will be expected to cooperate in the regional economic equity development (REED) plan that will emphasize marketing the city’s diversity, creating an equity-based plan for regional economic development and attracting businesses owned by ethnic and social minorities.

Council will consider a resolution next week that would allocate $252,882 for the Greater Austin Hispanic Chamber, $230,797 for the Greater Austin Black Chamber, $202,500 for Greater Austin Asian Chamber, and $153,750 for Austin LGBT Chamber.

The four separate contracts would require the groups to work together on the regional economic development goals, with the memo stating that once agreements have been reached, “no further updates to the equity model will be necessary.”

Reached by text, Tina Cannon, president and CEO of the Austin LGBT Chamber, said the resolution and new contracts would allow the groups to move forward with several years of collective work.

“The minority chambers have worked together unofficially for years. This new contract allows us to formally work on a regional economic equity development plan together to move all our communities forward.”

A 2019 report prepared with outside consultant Sabre Development provided recommendations for addressing equity for the four chambers as well as other niche chambers funded in part by the city. The report also suggested a one-year extension of the then-current funding levels and in the following year increasing the budgets of the Hispanic and Black chambers while decreasing the budgets for the Asian and LGBT chambers.

In December 2020, Council opted instead to approve the two budget increases while keeping the Asian and LGBT chambers’ funding at the existing allocation. Council never formally adopted the report despite the support by city staff. Last year Council asked the chambers to “envision a path forward for how we fund, and what we expect from chambers in advancing economic opportunity in Austin. The city manager is directed to plug into this process where appropriate, and absent meaningful progress, bring forward the base funding model to Council for approval in November 2021.”

While the city’s funding is only a portion of the total budgets for the respective chambers, the variance in funding levels made it difficult for their leaders to reliably plan their available funds and programs from one year to the next.

Recognizing that difficulty and the need to focus on matters related to equity, in 2017 the city’s Economic Prosperity Commission asked the Economic Development Department to create a transparent matrix to determine funding levels for the four chambers.

At the time Cannon said the time had come for the city to recognize the importance of the niche chambers in strengthening the city’s diversity as well as attracting new business.

“Over the years they’ve tried to normalize how their funding is determined because they depend so much on what the city provides,” she said. “They’re small groups working on getting the job done, and they play an integral role because when a business comes and talks to us about retention and expansion, there’s not one company that doesn’t ask about diversity in the community.”

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