Welcome to the Bridge Phase! Only 28 days now to Phase 5 which would see all sectors of the economy fully reopened and no capacity limits. Yesterday the updated shared all of the changes allowed in the Bridge Phase, click here if you need to review. Major news as well from Governor Pritzker as he announced plans to revise his executive orders related to face coverings following the CDC guidelines issued Thursday. His revised orders will mirror the new rules from the federal health organization, a Pritzker spokeswoman said. “The Governor believes firmly in following the science and intends to revise his executive orders in line with the upcoming CDC guidelines lifting additional mitigations for vaccinated people,” the spokeswoman said in a statement. “The scientists’ message is clear: if you are vaccinated, you can safely do much more.”
Some good news on funding locally, but not so well on the federal level for the RRF program. Will County has announced round 3 of CARES Act funding for those that have not yet received funds. The discouraging news is that the Restaurant Revitalization Fund has been tapped out before it really ever fully started. Overwhelming interest of more than double the funds approved will push Congress to contemplate a cash infusion. Also, Republicans are working on infrastructure ideas to share with President Biden, consumer spending held up in April, Comptroller Mendoza has asked for the state credit to be looked at, and more states are pulling back on extra unemployment payments.
Have a great weekend!
*Daily Coronavirus update brought to you by Silver Cross Hospital
Will County Announces Round 3 of CARES Act Funding
Will County is pleased to announce Round 3 of the CARES Act Small Business Grant Program for Will County businesses adversely impacted by the recent pandemic. The County recognizes its small businesses have experienced unprecedented disruptions and overwhelming financial challenges due to the COVID-19 public health crisis.
To date, Will County has distributed nearly $21 million in grants to 1,447 local businesses. These grant funds are available to help businesses still recovering from this public health crisis shore up their operations, rebuild their customer base, and restore solvency.
All small businesses physically located in Will County able to demonstrate COVID-19 impact are encouraged to apply for these grants of up to $10,000. The following criteria must be met to determine eligibility:
• Have not received a previous Will County Small Business Grant
• Annual revenues under $5 Million in 2020
• Less than 50 full time employees in 2020
• In operation since February 15, 2020, or earlier
• Have proof of COVID-19 impact
• In good standing with the IRS, State of Illinois, and Will County
• Not currently in bankruptcy
For more information and to apply visit: www.willcountyillinois.com/COVIDbizgrant
All required documents must be included and uploaded with each application. This is a requirement to expedite the review of eligibility and determine approval for the grant monies. Priority will be given to businesses located in the Illinois Department of Commerce and Economic Opportunity (DCEO) Disproportionately Impacted Area (DIA). DIA zip codes in Will County include: 60432, 60435, 60436, 60466, and 60471.
Attached are electronic English and Spanish flyers
The SBA’s Grant Program for Restaurants has a Problem – It’s Too Popular
In less than two weeks, the Restaurant Revitalization Fund attracted more applications than an all-you-can eat dinner special. The Small Business Administration, the agency overseeing the $28.6 billion grant program for hard-hit foodservice businesses, reported on Wednesday that since RRF’s May 3 launch, it received more than 266,000 applications, representing more than $65 billion in requested funds. Nearly half, or 147,000 applications, came directly from women, veterans, and socially and economically disadvantaged business owners, who requested $29 billion in relief funds. That will leave hundreds of thousands of other restaurant owners out of the money.
For its first 21 days of operation, the RRF program was open only to businesses owned and controlled by women, veterans, and socially and economically disadvantaged individuals. To date, $2.7 billion of relief funds have been dished out to 21,000 restaurants. The SBA estimates that RRF awards take approximately 14 days to be reviewed and validated.
It’s unclear if there’s willingness in Congress to authorize additional funding, though several lawmakers, including Representatives Earl Blumenauer (D-Ore.) and Brian Fitzpatrick (R-Pa.), along with Senators Kyrsten Sinema (D-Ariz.) and Roger Wicker (R-Miss.)–the primary sponsors of the bill that initialized RRF–called for the fund to get replenished. “We need to work swiftly in a bipartisan way to replenish this critical fund so that all local restaurants can access the relief required for a full recovery,” said the lawmakers in a joint statement.
The SBA is opting to keep its funding portal open because there’s still money available to the smallest businesses. Ahead of the program’s launch, SBA administrator Isabel Casillas Guzman announced she would apportion additional set-asides to improve equitable access among businesses. In addition to the $5 billion authorized by Congress for applicants with 2019 gross receipts of not more than $500,000, the SBA put $4 billion aside for applicants with 2019 gross receipts of $500,001 to $1.5 million. The agency also set aside $500 million for applicants with 2019 gross receipts of not more than $50,000. The SBA says that last set-aside is still open to eligible borrowers.
That’s little comfort to the hundreds of thousands of businesses that never even had a shot at the program. “Right now, SBA has more than $36 billion in applications from small, struggling independent businesses that will not receive funding,” Sean Kennedy, the National Restaurant Association’s executive vice president for public affairs, said in a statement. What’s more, he added, thousands of businesses eligible to apply within the first 21 days still don’t know if their applications have been approved. The SBA was unable to say how many applicants had been notified to date. A spokesperson said the agency should have final data next week.
That the program would run out of cash within the priority window was a concern from the start, said Kennedy, who noted previously that through January, the U.S. restaurant industry had lost an estimated $250 billion, and more than 110,000 U.S. restaurants closed permanently. As such, he added: “We continue to urge policymakers in Washington–from the White House to Capitol Hill–to replenish the RRF to maximize relief for small independent and franchise restaurant operators.”
Biden Asks Republican Senators to Bring Him Reworked Infrastructure Proposal
President Biden asked a group of Republican senators to flesh out their $568 billion infrastructure proposal with additional details, including how they would pay for it, a step that could begin more substantive negotiations on the issue.
Sen. Shelley Moore Capito (R., W.Va.), a lead negotiator for the GOP on the package, said Thursday after an Oval Office meeting with Mr. Biden and five other Republican senators that the president “asked us to come back and rework an offer so he can then react to that and re-offer to us. So we’re very encouraged.” Biden said after the meeting that he was optimistic the group could reach a reasonable agreement and planned to discuss a more detailed offer from the Republican senators next week. The group had previously released a two-page plan that called for unspecified user fees to cover its cost.
President Biden has said he is open to a compromise on his $2.3 trillion infrastructure proposal, which calls for new spending on roads, bridges, broadband, and boosting electric vehicles and semiconductor manufacturing. He has held meetings this week with congressional leaders and centrist Democratic senators. Republicans have said they could support a narrower plan in the range of $600 to $800 billion but have rejected the president’s proposal to pay for it by raising taxes on companies.
Several of the Republican lawmakers at Thursday’s meeting said President Biden appeared to understand that any bipartisan deal wouldn’t include raising taxes on companies and high-income Americans. During a meeting Wednesday with Mr. Biden, Senate Minority Leader Mitch McConnell (R., Ky.) and House Minority Leader Kevin McCarthy (R., Calif.) said Republicans would oppose any tax increases to pay for infrastructure investments. “He said, ‘Well, Mitch was here yesterday and Mitch made the same point,’ and he said, ’I get it,’” said Sen. John Barrasso (R., Wyo.), a member of Republican leadership. He said Mr. Biden wanted to know how Republicans would propose paying for new spending. White House press secretary Jen Psaki, asked about GOP opposition to tax increases, said if “raising taxes on just 1% of Americans is not the way to do it, then we welcome what their alternatives are.”
The Republicans also said after the meeting that Mr. Biden seemed open to working with them on a narrower range of infrastructure issues and excluding some of the provisions in his $2.3 trillion plan. Mr. Biden has called things like expanding care for the elderly and supporting the American workforce necessary to compete with other countries. Republicans would prefer to focus on things like building roads, bridges, and airports.
U.S. Shoppers Continued Stimulus-Fueled Spending in April
Shoppers extended stimulus-induced spending in April, maintaining a level of retail sales from the prior month with increased expenditures on autos and dining out. Retail sales—a measure of purchases at stores, at restaurants and online—overall were unchanged last month from March, the Commerce Department reported Friday. That kept spending at the same pace set by March’s upwardly revised 10.7% advance, which was influenced by government-stimulus money for most households.
“Flat sales going from March to April is still pretty strong. The level of sales is much higher than before the pandemic,” said Scott Brown, chief economist at Raymond James Financial. “It’s still a sign that consumer spending is pretty healthy at this point.”
Sales were up 2.9% at auto and parts dealers, where shortages in available cars have driven up prices, and 3% at restaurants and bars, a positive sign for the hard-hit industry as the U.S. economy more fully opens. The leisure and hospitality sector, including restaurants, added 331,000 jobs in April, accounting for much of the country’s job creation last month. Commerce’s Friday report showed sales at restaurants and bars in April were just 2% lower than their levels in February 2020, just before the pandemic took hold in the U.S.
Shoppers otherwise last month cut spending across a range of retail categories, such as clothing and accessories, furniture, and sporting goods. Sales at general merchandise stores, such as big-box retailers, and online retailers also fell. Separately, industrial production in the U.S. expanded in April amid strong demand for goods, but the sector continued to be constrained by supply-chain bottlenecks.
Industrial production—a measure of factory, mining, and utility output—rose at a seasonally adjusted 0.7% in April compared with March, the Federal Reserve said Friday. That was broadly in line with economists’ expectations. Manufacturing output, the biggest component of industrial production, increased by 0.4% in April from the prior month. Motor vehicle and parts production weighed on the overall figure, falling by 4.3% on month, as the global shortage of semiconductor chips has led to plants running at less than full capacity.
The economy’s recovery continues to be uneven, however. Hiring unexpectedly slowed last month. Consumer prices also jumped, raising concerns that inflation may accelerate faster than the Federal Reserve anticipates. “Inflation is a big concern. As we know, as prices go up, that’s going to really erode consumers’ purchasing power,” said Lindsey Piegza, chief economist at Stifel.
Fed officials have said the surge in prices is likely temporary and that the central bank has tools to combat inflation should it rise too much. Meanwhile, they have signaled their easy-money policies, including maintaining low interest rates, will remain in place until the labor market is more fully healed.
Comptroller Mendoza Suggests Illinois Due for Credit Upgrade
Illinois Comptroller Susana Mendoza is asking the nation’s three major credit rating agencies to reconsider the state’s credit rating with an eye toward a possible upgrade. In an April 28 letter to executives at Moody’s Investors Service, S&P Global Ratings and Fitch Ratings, Mendoza argued that Illinois has virtually eliminated its backlog of past-due bills while keeping current on its bond payments and pension obligations, all in the midst of a global pandemic.
“Please be assured that my office is doing everything possible in managing the current backlog of bills and addressing Illinois’ finances head on,” Mendoza wrote. “The Office of Comptroller urges your agencies to consider these positive factors and progress made paying down the backlog when evaluating Illinois’ credit worthiness.”
Illinois currently has the lowest investment-grade credit rating available from all three rating agencies, one notch above what is considered “junk bond” status. Mendoza wrote that letter on the same day her office announced that the state’s bill backlog – actually, the sum total of all outstanding vouchers waiting to be paid – had been decreased to just $3.5 billion.
According to the letter, the oldest outstanding commercial voucher at that time was just two days old. The backlog was within the 30-day billing cycle that is common in the business world, Mendoza’s office said. In fact, Mendoza said during an interview Tuesday that she believes the state now needs to come up with another word besides “backlog.”
“The key statistic here is that right now we are up to date with all of our commercial vouchers,” Mendoza said. “So there is no one waiting to get paid in my office. There could still potentially be some people that are waiting to get paid because their invoices might be at the agency level and they just haven’t sent them to us. But you’re talking about a minute group of people.”
Since Mendoza announced that the backlog had been paid down, the amount of outstanding vouchers has fluctuated daily, roughly between $3.5 and $4.5 billion. But she said the bulk of that is the result of interfund borrowing – when the state transfers money from other funds into the general revenue fund to meet short-term cash flow needs – as well as the normal “ebb and flow” of daily business in state government. Apart from those expenses, though, the state does have significant short-term obligations coming due, including roughly $3.2 billion the state borrowed from the Federal Reserve during the pandemic, plus another $400 million borrowed from the state treasurer’s office.
Both Mendoza and Gov. JB Pritzker had said in earlier interviews that they wanted to use a portion of the roughly $8 billion in federal relief funds that Illinois expects to receive through the recently passed American Rescue Plan to pay off the Federal Reserve loans. But new guidelines from the U.S. Treasury Department that were released on Tuesday specifically prohibit using those funds for “payment of interest or principal on outstanding debt instruments, including, for example, short-term revenue or tax anticipation notes, or other debt service costs.”
State Rep. Michael Zalewski, D-Riverside, who chairs the House Revenue Committee, said in an interview Wednesday that he does not believe the relief funds can be used to repay the Federal Reserve and that any repayment plan will have to be “part of a broader budget conversation.” But Mendoza said in a statement Wednesday that she believes there may be room to negotiate with Treasury on the use of those funds.
“The Dept. of the Treasury said it welcomes feedback to the interim guidance on permitted uses of the stimulus funds,” she said in an email statement. “(The Governor’s Office of Management and Budget) and our office will be seeking to clarify with the Treasury that guidance against using these funds to pay debts unrelated to COVID-19 does not prevent their use for paying debts accrued for spending related to COVID expenses. Our office has made clear that stimulus funds will not be used to pay legacy costs such as pensions.”
During a separate news conference Wednesday, Pritzker insisted the state is committed to repaying the Federal Reserve loans one way or another, but said he believes the state should be allowed to use the relief funds for that purpose. “Look, the federal government is sending us dollars and then telling us that we can’t then send those dollars back to the federal government to pay for the borrowing we took out last year. Clearly it doesn’t make a lot of sense and so we’ve talked to the Treasury Department about that,” he said.
States Rejecting Federal Unemployment Benefits
A series of Republican states around the country are turning away federal supplemental funding for unemployment benefits, saying it is hurting their state economies and encouraging potential workers to stay home rather than return to the workforce.
Georgia’s Republican Gov. Brian Kemp announced Thursday the state would no longer accept the $300 weekly federal unemployment payments, the latest state to reject the federal help and blame the additional benefits as a driving factor that is keeping Americans from going back to work. “What I’m seeing on the ground here is that every small business owner and the workers that are currently working, they need more people,” Kemp said when announcing the decision on Fox News. “It is hurting our productivity, not only in Georgia, but across the country. We’ve got to get more people into the workforce.”
So far, at least 13 states are taking steps to ween off the benefits. Tuesday, Iowa, and Tennessee joined the growing number of Republican-led states turning away the federal unemployment assistance. “Federal pandemic-related unemployment benefit programs initially provided displaced Iowans with crucial assistance when the pandemic began,” Iowa Republican Gov. Kim Reynolds said. “But now that our businesses and schools have reopened, these payments are discouraging people from returning to work.”
Arizona, Arkansas, Alabama, Mississippi, Missouri, Montana, North Dakota, Idaho, South Carolina, and Wyoming have announced they will stop accepting some measure of federal unemployment benefits. The states vary on what date they will transition. “Wyoming needs workers, our businesses are raring to go,” Wyoming Gov. Mark Gordon said. “I recognize the challenges facing Wyoming employers, and I believe it’s critical for us to do what we can to encourage more hiring. Federal unemployment programs have provided short-term relief for displaced and vulnerable workers at a tough time, but are now hindering the pace of our recovery. People want to work, and work is available. Incentivizing people not to work is just plain un-American.”
More governors withdrew from the federal funding after economic data released last week showed a spike in unemployment. The Bureau of Labor Statistics released data showing unemployment spiked to 6.1% last month. The economy created 266,000 nonfarm jobs in April, far fewer than the 1 million jobs economists predicted. Critics say the ongoing stimulus payments and beefed up unemployment benefits are to blame, incentivizing Americans not to look for work.
“What was intended to be a short-term financial assistance for the vulnerable and displaced during the height of the pandemic has turned into a dangerous federal entitlement, incentivizing and paying workers to stay at home rather than encouraging them to return to the workplace,” South Carolina Republican Gov. Henry McMaster wrote in a letter to the state’s Department of Employment and Workforce.
While Georgia is the latest state to turn away the federal funds, many experts expect it won’t be the last. Tennessee Gov. Bill Lee did the same Tuesday, announcing the plan would be done in Tennessee before Independence Day. “We will no longer participate in federal pandemic unemployment programs because Tennesseans have access to more than 250,000 jobs in our state,” Lee said. “Families, businesses and our economy thrive when we focus on meaningful employment and move on from short-term, federal fixes.”
The White House has pushed back against the claim the federal unemployment benefits are to blame for increased unemployment. “We’re not seeing this as the root cause, driver of people not seeking work,” White House Press Secretary Jen Psaki told reporters. “Of course, we’re going to see anecdotal examples. We certainly recognize that.” But some critics disagree, saying the program has disincentivized many Americans from going back to work.
Program Notices & Reminders – Expanded Information
Small Business Administration Restaurant Revitalization Fund
SBA began accepting applications via the application portal Monday 5/3 at 11 AM. The application portal will remain open to any eligible establishment until all funds are exhausted.
In preparation, qualifying applicants should familiarize themselves with the application process in advance to ensure a smooth and efficient application. Follow the steps below.
- If you haven’t already, register for an account on the application portal at restaurants.sba.gov. If you are working with Square or Toast, you do not need to register.
- Review the sample application, program guide and cross-program eligibility chart on SBA COVID-19 relief options. SBA also added screenshots of the application portal that are available here.
- Applications must be submitted in English or Spanish. SBA has documents in additional languages to help you understand eligibility requirements, fill out applications, and answer frequently asked questions. See the additional languages and materials here.
- If you were unable to attend one of the webinars held last week which covered program details and a demonstration of the application portal, you can watch the recording here.
For more information, visit sba.gov/restaurants.
As the SBA builds and prepares to roll out the program, this dedicated SBA website is the best source for up-to-date information for eligible restaurants interested in the RRF.
Small Business Administration Shuttered Venue Operators Grant Program
The SBA has completed rigorous testing and the Shuttered Venue Operators Grant application portal reopened on Saturday, April 24 at 12:30pm ET. Updated guidance documents have been posted below. Applicants may continue to register for an application portal account.
- FAQ regarding Shuttered Venue Operators Grant
- SVOG preliminary application checklist
- Cross-program eligibility on SBA COVID-19 relief options
- SVOG-specific version of IRS Form 4506-T
- SVOG applicant user guide
Small Business Administration Paycheck Protection Program
As of May 6, 2021, funding for the Paycheck Protection Program has been exhausted. The SBA will continue funding outstanding approved PPP applications, but new qualifying applications will only be funded through Community Financial Institution, financial lenders who serve underserved communities
Finally, Congresswoman Lauren Underwood and her team want to check in with you, our members to hear about your experience during COVID-19 and federal relief programs. Her office has developed a short survey to allow businesses in the 14th District of Illinois to provide feedback to Congresswoman Underwood about their experience with COVID-19 federal relief programs for businesses including PPP, EIDL, Shuttered Venue, and Restaurant Revitalization Fund; how federal relief programs have benefitted the local small business community; and what assistance they continue to need going forward. The survey can be found here.
We know that a great majority of you do not fit into the 14th District, but there is a sliver and I’m sure they won’t mind the extra feedback even from those out of district since they’ve asked. The survey deadline is May 26 by 6:00 p.m. CT.
Joliet Region Chamber of Commerce & Industry Staff and Board of Directors
Vice President – Government Affairs
Joliet Region Chamber of Commerce & Industry