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Patrick Connor: Swift action needed to save small businesses, state economy

By Patrick Connor of Independent Business

Monday’s pronouncement that the three West Coast governors are developing a “… shared vision for reopening their economies and controlling COVID-19 into the future,” was welcome news. It shows Gov. Jay Inslee and his Oregon and California counterparts are rethinking their approach toward business, beyond the expiration date of their latest stay home order.

But small businesses can’t wait much longer for governors to allow them to safely and responsibly restart operations. Too many are teetering on the precipice of closing permanently, eliminating jobs deemed “essential” by the workers who fill them and the families they support.

The National Federation of Independent Business has been monitoring the impact of state responses to the pandemic on small businesses. The data is deeply troubling.

As April began, 92 percent of small businesses reported being negatively impacted by the outbreak. Half say they can survive a shutdown for no more than two months. The May 4 expiration date for Washington’s most recent closure order puts most of them right at the breaking point – or will push them over it, if the order is extended again.

Federal assistance has been slow to reach small-business owners.

Although half have applied for an Economic Injury Disaster Loan and emergency grant from the Small Business Administration, only 4% of applications had been approved as of last week. Worse yet, not one small-business owner has received a loan or grant through this program.

Similarly, the disastrous rollout of the federal Paycheck Protection Program was a cruel April Fool’s joke on America’s leading job creators. Small-business owners filing applications on the April 3 launch date were told by most big banks that their paperwork wouldn’t be accepted unless the firm already had a loan or other existing business relationship with the institution.

While initial problems with the “PPP” have been ironed out, and some 70 percent of small-business owners have applied for these loans, the program was expected to run out of money on Tax Day, April 15. Partisan wrangling has blocked efforts to add $250 million to this crucial program.

Independent contractors and other self-employed small-business owners eligible for federal Pandemic Unemployment Assistance benefits are still waiting to hear when the state Employment Security Department will start accepting applications, let alone when it will begin sending payments.

We applauded Gov. Jay Inslee’s decision two weeks ago making $5 million in grants available to very small businesses. Rumor has it 6,000 applications were submitted immediately. Given the size of individual grants, we expect fewer than 1,000 will be awarded. It’s a good start, but many struggling small businesses will see their application denied. Moreover, checks aren’t expected to be issued until sometime next month.

So what are small-business owners to do?

First, if the current closure order must be extended, NFIB urges Gov. Inslee to borrow a page from Oregon Gov. Kate Brown. She issued a list of business types required to close because social distancing is impractical. Other businesses remain open, so long as social distancing and enhanced hygiene and cleaning protocols are implemented. That’s the opposite of Washington’s order closing all businesses except those deemed “essential.”

NFIB, in partnership with others, has asked Gov. Inslee to allow more retailers to resume operations – under those same enhanced safety conditions – before May 5. That approach should be swiftly extended to all business activities.

Next, we encourage the governor to focus any future stay-at-home order on individuals most at risk if exposed to COVID-19. Rather than keep businesses shuttered, regardless of their ability to safely and responsibly operate, the governor should order residents whose age or health status puts them in jeopardy to remain indoors until data indicate it is safe.

Finally, we know additional federal and state actions are necessary to address the looming economic disaster this pandemic has caused.

NFIB this week released a small-business recovery plan that would help Washington entrepreneurs reopen their doors to customers, bring employees back to work, and jump-start our state’s flailing economy.

Our plan includes short-term relief, such as postponing certain tax due dates, enacting limited tax holidays, increasing emergency grants to small businesses, and delaying new rules that will drive up payroll costs, as well as longer-term changes to better position us to handle this type of an emergency, including developing a safety net for self-employed individuals, and modifying the gross receipts tax.

Beyond just helping small businesses, our proposal would give working families more purchasing power and an incentive to shop – locally, we hope.

More important, it would help small businesses begin rehiring workers furloughed during this outbreak, because the best medicine for families and communities in the wake of this pandemic is a stable job.

Patrick Connor is Washington state director for the National Federation of Independent Business, the nation’s leading advocacy organization for small and independent business owners.