MASS. – The $1.5 trillion spending plan Congress passed this month did not include any additional COVID relief funding.
According to the National Restaurant Association, some restaurant owners were still hoping the money was coming and were disappointed to find out it wasn’t.
Mike Whatley of the National Restaurant Association said that while it might appear like the restaurant industry is experiencing a comeback, some owners are still deeply in debt because of business they lost during the height of the pandemic.
“It’s been incumbent upon us, and our independent restaurant members, to really tell lawmakers and show them look, you know, I’m in trouble. It may look busy. But you know, there’s so much we have to make up for in the past,” said Whatley.
Whatley said one program they saw work very well was the Small Business Administration’s Restaurant Revitalization Fund. It offered owners grants to recoup pandemic related losses. It was so successful; it ran out of funds only a few weeks after it started accepting applications. Several lawmakers, including a group from Massachusetts, have introduced legislation to bring the program back but to no avail.
“Only 1/3 of eligible restaurants got even a penny, the ones that applied and got it got all of it, the ones that applied and didn’t get the funding got $0 and that’s 177,000 restaurants across this country,” said Whatley.
Steve Clark, with the Massachusetts Restaurant Association, added that restaurant owners they work with were still holding onto hope that the funding might be part of the massive government spending package that Congress voted on just weeks ago.
Clark said that when billions of dollars in additional COVID relief funding was stripped from the bill, that was the last straw for some owners.
“I’ve talked to some operators that have begun the process of selling their restaurants or declaring for bankruptcy and the very real human aspect that comes with closing a restaurant when you’re when you’re waiting for relief,” Clark said.
The removal of the COVID money reflected a concern in Congress, especially among many Republicans, that COVID-19 is no longer a pressing concern.
However, the National Restaurant Association estimates that replenishing the restaurant fund would save up to 1.6 million jobs.
Clark said that, right now, making money in the industry is harder than ever.
“If you think about the three biggest cost drivers in a restaurant, our labor, food and occupancy, and all three are at all-time highs,” Clark said.
In the absence of new funding, Clark said that restaurant owners should look into the Employee Retention Tax Credit. The tax credit was created during the pandemic to encourage business owners to keep their employees on the payroll.
“I would continue to encourage restaurants that didn’t get ERTC the first time to apply and amend their tax returns to make sure they’re getting that money,” Clark said. “It is really really valuable and several restaurants still have not taken advantage of that and they should.”
Several Massachusetts lawmakers are also speaking out about the program and say that they would still like to see the fund replenished.
“The pandemic has taken a massive toll on our local restaurants, and too many local staples have been forced to close their doors already. Many restaurants have overcome unimaginable challenges but are still hanging on by a thread. They need a lifeline and replenishing the Restaurant Revitalization Fund is how we can and must keep them afloat. I strongly support replenishing this critical program and making sure the smallest of restaurants here in Massachusetts – many of which were left out of the first round of funding – are prioritized with the relief,” said. Rep. Lori Trahan (D-MA).
“The COVID-19 pandemic devastated our small businesses and restaurants were no exception,” said Congressman Richard E. Neal, Chair of the House Committee on Ways and Means (D-MA). “The Small Business Administration’s Restaurant Revitalization Fund played an instrumental role in assisting those restaurants who had to close their doors through no fault of their own and help those who were able to reopen do so safely. However, the Massachusetts delegation and I stand together in urging the SBA to allocate more of this critical economic relief.”
“With our small restaurants and restaurant workers in Massachusetts still struggling amid this ongoing pandemic, we remain committed to fighting to replenishing the Restaurant Revitalization Fund, raise the minimum wage, and deliver the meaningful COVID relief our communities need and deserve in this moment,” said Rep. Ayanna Pressley (D-MA).