NJBIZ- Lawmakers are introducing a bill Thursday that would compensate restaurant owners for losses suffered in preparation for the July 2 restart to indoor dining, only for the governor to cancel the order days beforehand
Under the latest version of the legislation, the state would set aside $30 million of federal aid under the Coronavirus Aid, Relief and Economic Security Aid, putting it under the auspices of the New Jersey Economic Development Authority to award to restaurant owners.
Indoor dining was initially set to resume on July 2 at 25 percent capacity with face covering and sanitization requirements. But Gov. Phil Murphy pulled the plug on June 29, saying that indoor dining had contributed to surges of the virus being seen across the country.
That same day, he vetoed a bill with similar goals to this new legislation, which would have created a $100 million “hospitality small business emergency loan program,” providing no-interest loans capped at $10,000 a month. That too would have been funded from CARES Act dollars allocated to New Jersey.
Murphy argued on June 29 that the bill mirrored too many aspects of the NJEDA’s existing small business loans and grants.
Under existing programs, the NJEDA has awarded or given out tens of millions of dollars to small businesses whose revenue have dried up during the pandemic, and who have been forced to furlough or layoff workers, or shut down their operations indefinitely.
As part of this new bill, the NJEDA could give out the money in the form of loans or grants from the state agency “for the costs associated with business operation interruptions” stemming from Murphy’s decision.
State officials at the NJEDA would have to hash out requirements and guidelines for the program – such as how much money each business could receive, the litmus test applied to business owners to gauge whether they need the money, and how the state aid can be used.
The bill is sponsored by two of the state Legislature’s top lawmakers: Senate President Stephen Sweeney, D-3rd District, and Assembly Republican Leader Jon Bramnick, R-21st District.
“The Legislature will begin to put plans in place to find ways to reimburse the restaurant, bar, and catering businesses,” Sweeney tweeted Monday afternoon. “They sacrificed their livelihoods and businesses for the public’s health. It was not right that they were forced to close again at the last minute.”
“Restaurant owners complained they spent thousands of dollars ordering food, hiring back employees, and aligning indoor safety practices in preparation for reopening indoor dining prior to the Fourth of July weekend,” Marilou Halvorson, president of the New Jersey Restaurant and Hospitality Association – the state’s hotel and restaurant trade group –, said after Murphy’s announcement on June 29.
“Some owners even used personal credit cards in hopes of regaining ground.”
“They deserve to be reimbursed by the government,” Bramnick said in a July 2 statement.
Murphy, asked about it on July 8, took his oft-used stance to not comment on legislation moving through the state Legislature before it lands on his desk, but questioned “where’s the money coming from?”
“And by the way, the EDA has been really good with the limited resources that we have … These are real businesses that are being helped in real ways by the EDA,” the governor added.
“I completely have complete empathy and I completely support the notion, but we have to have a source of money that can back up that notion,” he said.
That was his reason for the June 29 veto: Arguing the state is too cash-strapped and that the NJEDA already employs an array of state aid programs to provide COVID-19 relief. Tens of thousands of businesses have applied for those loan and grant programs – many would not likely see any money.
As of July 11, the state paid out or awarded nearly $24 million to more than 7,000 businesses under its grant program, and as of July 8 lent out $3.6 million to 50 businesses out of the $10 million from its loan program.
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