Gov. Phil Murphy is set to consider a measure that would compensate restaurant owners for the financial hit they took when he pulled plans to restart indoor dining in July, amid fears of a nationwide COVID-19 surge.
Under the proposed Senate Bill 2704, which cleared the state Senate and Assembly Thursday, the Murphy administration would set aside $30 million in federal COVID-19 relief for the New Jersey Economic Development Authority, which would doll out the money in the form of loans or grants “for costs associated with business operation interruptions” caused by the abrupt reversal of the indoor dining plans.
Murphy ordered restaurants to halt sit-down dining in March as the pandemic slammed into the state, allowing them to offer only take-out and delivery. He then allowed outdoor dining to resume on June 15, but restaurant owners are worried how they will fare with colder weather just weeks away, rendering most outdoor dining arrangements useless.
Indoor dining was initially set to resume on July 2, at 25 percent capacity with face coverings and sanitization requirements. But the governor pulled the plug on June 29, saying that indoor dining had contributed to surges of the virus being seen across the country.
“Many restaurant owners have not generated the revenue to pay for these start-up expenses over the past 15 weeks, and therefore, dug deep into their own personal pockets to restart their business,” reads a June 30 statement from the New Jersey Business Coalition.
Included among the coalition’s membership is the New Jersey Restaurant & Hospitality Association, the primary trade group for those two industries.
“Respectfully, we ask: Who is going to reimburse these lost costs? Food, now at premium prices, has a very short shelf life,” the statement continues. “Additionally, how many times will restaurant owners be asked to train up a workforce only to send them back to unemployment?”
Murphy on Thursday vetoed a bill with similar goals to the 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 Coronavirus Aid, Relief, and Economic Security Act dollars allocated to New Jersey.
“He didn’t want it to be narrow, and I understand his point,” said Sen. Vin Gopal, D-11th District, a sponsor of both bills. “Restaurants are one of the few industries that are going to take forever to come back, even if they get to 25 percent.”
Indoor dining, gyms and movie theaters are the last three activities remaining closed in the state. On Wednesday, Murphy announced gyms can open at 25 percent capacity beginning Sept. 1.
The governor has been largely conservative with legislation that taps into the state’s limited pot of CARES Act dollars, which adds up to $2.4 billion.
But sponsors of SB 2704, like Gopal, were relatively confident that the governor would approve the measure.
“He said at a press conference he supports the bill, but he didn’t know where the money was coming from, so we showed him,” one of the bill’s sponsors, Senate President Stephen Sweeney, D-3rd District, told reporters Thursday afternoon.
The governor’s budget proposal this week provides a rough outline for how his administration plans to spend CARES Act money through the end of June, which is when the 2021 fiscal year concludes. That includes $106 million toward economic development and reemployment programs and $73.5 million toward small business grants and assistance within the NJEDA. So far, the agency has used that money for grants, low-interest loans, and financial guarantees to entice investment amid the pandemic and ensuing recession.