Hospitality Association calls relief package a ‘start’ as legislators discuss more options
In the wake of new restrictions meant to curb a surge in COVID-19 and a $135 million economic relief package aimed at taming the economic ripple they’ll cause, lawmakers are discussing what more can be done to help the hospitality industry — and quickly.
Before the latest COVID-19 restrictions were introduced last week, the Washington Hospitality Association already had estimated 35% of hospitality businesses in the state would close permanently.
The trade group, which represents restaurants, hotels, and some entertainment venues, estimates restaurants alone will lose roughly $800 million in labor and hard costs in four weeks, during which indoor dining is prohibited, limiting restaurants to outdoor seating and takeout.
That projected loss is based on numbers from April, according to a WHA spokesperson.
When restaurants were takeout-only in April, they lost $730 million, Niki Reading wrote in an email to McClatchy. Thanksgiving and the holidays traditionally translate to bigger months for restaurants, she wrote, and the $800 million figure is considered a “conservative estimate.”
There is $70 million in grants for businesses included in the relief package Washington Gov. Jay Inslee announced last week, $50 million of which is prioritized for hard-hit businesses such as restaurants. But that pales in comparison to the loss WHA estimates. Anthony Anton, President and CEO of WHA, has framed it as covering about two days out of the four weeks.
Also in the package is $20 million for rental assistance, $15 million to help low-income households pay energy bills, and $30 million for a “recovery loan program” for businesses.
At a virtual press conference Monday, Anton and state lawmakers from both sides of the aisle spoke of an urgent need for further action.
There seemed to be consensus on much of what was discussed: All appreciated the Governor’s latest commitment and all acknowledged more had to be done — Anton called the package “a start.” A lawmaker from each party expressed they didn’t favor loans as a fix, since they require businesses go further into debt.
While revenues plummet and overhead expenses for business owners, such as mortgage and utility payments, persist, legislators Monday floated a few broad ideas to provide further respite for the industry.
Legislators mentioned relief from the state Business & Occupation tax, which is calculated on a business’s gross income, and easing the unemployment insurance tax.
Democratic Sen. Karen Keiser, who represents cities south of Seattle, including SeaTac, chairs the Senate Labor & Commerce Committee. She said there is need to reform unemployment benefits so they make more sense for the current “episodic shutdowns.”
All expressed the desire to come to a consensus on a plan.
“Business isn’t partisan, we just want them to stay alive,” Rep. Gina Mosbrucker, another of the four lawmakers at Monday’s news conference, said in a phone interview later that day.
The clearest area of persistent divide: Whether to have an emergency special session, to throw the industry a “lifeline” before the regular session is scheduled to begin in January.
Mosbrucker, a Republican from Klickitat County, told McClatchy she has managed a Quality Inn and Suites Hotel in Goldendale for 25-30 years and comes from a family of business owners.
She closed the hotel for two months when the pandemic hit, she said, and costs associated with running the business during a pandemic — cleaning, leaving rooms vacant for days after guests leave — have added to the financial burden.
The sporting events, tourism, agritourism, and meetings that brought crowds to town aren’t happening, and people are afraid to come in any case — which Mosbrucker said she “completely understands.”
The struggle for businesses is getting worse each day, she said. And while collaboration was strong at first, she said Republicans haven’t been at the decision-making table for months. Republican leaders have recently renewed calls for a special session in the wake of the new state restrictions.
“We feel this is an emergency,” Mosbrucker said.
Republican Sen. Shelly Short, who represents Ferry, Stevens, and Pend Oreille counties in Eastern Washington, said at the press conference she also thinks waiting until January is “too long.”
Sen. Keiser and Rep. Larry Springer, the two Democrats at Monday’s press conference, weren’t so enthusiastic about that idea. Springer, who represents East King County and owns a retail wine store, said it hasn’t been talked about in “any realistic way.”
It’s questionable it would buy any time, he said, especially with kinks to work out relative to remotely conducting a session during a pandemic.
The two Democrats, who belong to the majority in both legislative chambers, emphasized a need for Congress to act and for state legislators to come to a consensus on what the legislature can do before next year’s regular session starts to avoid months of time-consuming negotiations.
Springer said he thinks one of the House budget team’s highest priorities on “day one of the 2021 session” will be what can be done to provide “some modicum of financial support for industry sectors, and especially the hospitality industry.”
And in the interim, Keiser said at the news conference, “there’s still more to be done at the executive level.”
When asked what she would like to see Gov. Inslee do, Keiser said the first think to be done is “put the federal CARES Act money to use.”
“This money could go into Washingtonians’ pockets much more quickly than any new appropriation from the legislature,” a statement from Keiser reads. “We are in conversations to develop agreements for action in the regular legislative session. Without engaging in conversations and proposals now we will not be successful in finding agreement when we do return to session.”
Senate Majority Leader Andy Billig made a similar point at a press availability hosted by legislative Democrats later that day: That using the state’s rainy day fund and holding a special session is a “worthy discussion to have,” but the first thing to do is use CARES money — because it can be done fast, it soon expires, and its uses are more flexible.
Billig also mentioned that Republican legislators called for a special session earlier this year to deal with budgetary issues, but he’s glad they took a “thoughtful and patient approach” instead. The state’s revenue forecast has since improved, though the latest projection is still $2.4 billion below pre-COVID projections and officials warned of ongoing uncertainty.
Sen. Manka Dhingra, who represents the same district as Rep. Springer, mentioned that the bipartisan senate Special Committee on Economic Recovery has been meeting consistently, so progress is still being made.
The federal CARES Act is the source of funding for the entirety of Inslee’s $135 million package, and federal guidance says the funds can only be used for expenditures necessary due to the COVID-19 public health emergency that weren’t in the most recent budget before March 27, and were incurred between March 1 and Dec. 30 of this year.
State and local governments in Washington received about $2.95 billion in federal funding through the CARES Act, nearly $1.1 billion of which went to local governments and nearly $1.9 billion of which went directly to the state.
There’s about $150 million in CARES Act funding remaining, according to the Office of Financial Management.
This story was originally published November 24, 2020 at 10:54 AM.
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