Stimulus bill to aid independent restaurants hit hardest in pandemic

Jul 6, 2020

Stimulus bill to aid independent restaurants hit hardest in pandemic

Chamber Business News

Millions of independent restaurant owners and employees displaced or struggling because of the pandemic could soon see relief through federal legislation that specifically targets them for help. 
A bipartisan bill introduced in both houses of Congress last month called the RESTAURANTS Act 2020 would provide $120 billion in grants to assist restaurateurs to rehire workers and for other operating expenses. 
Arizona Sen. Kyrsten Sinema, a Democrat, is the lead Senate sponsor along with Mississippi Sen. Roger Wicker, a Republican.
Their goal is to preserve independent and small franchise operators like the corner cafe, the tamale store, the neighborhood bar. 
“The introduction of this bill provides hope of survival for small business restaurant owners from the smallest towns to the broadest urban streets. It will help these struggling businesses who are still facing a difficult and uncertain future,” Sean Kennedy, executive vice president of public affairs for the National Restaurant Association said when the bill was introduced. 
Millions of restaurant workers remain jobless 
The pandemic has been particularly hard on independent food and drinking establishments. Even with inside dining now allowed in many states, customers continue to be wary and social distancing guidelines limit the ability to turn a profit, Kennedy said. 
And while new U.S. Bureau of Labor Statistics show that hiring kicked up significantly in June, with food and drinking establishments adding 1.5 million jobs, more than 3 million restaurant workers still remain jobless. 
Arizona mom and pops facing “devastation”
In Arizona, independent operators are among those struggling to survive — if they haven’t already closed shop, said Steve Chucri, president and CEO of the Arizona Restaurant Association (ARA), which represents the industry that had $14.7 billion in sales in 2018. 
“In Arizona, the economic fallout has been devastating,” said Chucri, adding that Arizona restaurants lost roughly $29 million a day during the peak of the virus, and a total $815 million in April.
Before the pandemic, the industry employed 310,600 people, representing 11 percent of Arizona’s workforce, he said. 
A survey released last month by the ARA showed that, among restaurants still in operation, 89 percent have laid off or furloughed employees during the pandemic. 
On average, establishments are reporting a 63 percent decline in sales during the period from May 1 to May 15, according to the survey. 
Without a relief package, 72 percent of restaurant operators said it is “unlikely” that their restaurant will be profitable within the next six months.
Strong bipartisan, bicameral support   
There is strong bipartisan, bicameral support for the measure.
Representatives Earl Blumenauer, D-Ore. and Rep. Brian Fitzpatrick, R-Pa., introduced the House counterpart to the Senate version introduced by Sinema and Wicker. 
“Arizona restaurants fuel jobs across our state, and they need support now. Establishing a Restaurant Revitalization Fund will help get Arizonans back to work and ensure our local Arizona restaurants can keep their doors open as we continue to fight the ongoing coronavirus pandemic,” Sinema said. 
What the restaurant bill does  
The RESTAURANTS Act, which stands for the Real Economic Support That Acknowledges Unique Restaurant Assistance Needed to Survive Act of 2020, would establish a $120 billion revitalization fund through the U.S. Department of Treasury. 
Among the measures in the bill:  

  • Funding would be available to food service or drinking establishments that are not publicly traded or part of a chain with 20 or more locations doing business under the same name
  • Eligible expenses include: payroll, benefits, mortgage, rent, utilities, maintenance, supplies including protective equipment and cleaning materials, food, debt obligations to suppliers, and other costs
  • The first 14 days of the grant’s opening would only be available to restaurants with annual revenues of $1.5 million or fewer, ensuring that the smallest restaurants are prioritized
  • The grant values would cover the difference between revenues from 2019 and projected revenues through 2020 
  • The legislation includes administrative funding toward outreach and engagement to restaurants owned and operated by women, veterans, and people of color. 

A study on this proposal found that the fund would generate at least $183 billion in primary benefits and $65 billion in secondary benefits — more than double the amount of the fund.