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Texas restaurants will continue to close without a bailout from Governor Abbott and the legislature

Even though we are almost nine months after the start of the COVID-19 pandemic, it feels like Texas is starting from scratch. Last week, the state became the first in the country to exceed one million diagnosed cases, and the number of new cases across Texas continues to rise.

Also last week, Harris County Judge Lina Hidalgo hinted that these trends could mean another “shutdown” is underway. No one looks forward to the prospect of restaurants and other businesses being forced to shut down again, but it seems to be inevitable at this point. And because restaurants have been identified as particularly dangerous places in terms of the spread of COVID, it’s likely that restaurateurs who have already dealt with so much in 2020 will have even more months of lost revenue to come.

This is exactly why it is time for Governor Greg Abbott and the Texas Legislature, who have done so little to stem the spread of the coronavirus and support those who have been financially affected by the crisis, to dip into the fund for rainy days to bail out restaurants. These establishments have been disproportionately affected by the pandemic, and many will not be able to wait for the economic recovery until next year.

For those who don’t know, The Texas Rainy Day Fund is just that – a huge amount of money that stays in an account until needed for emergencies like natural disasters. At present, the fund is estimated to exceed $ 10 billion, although some funds have already been allocated for other purposes. Also known as the Economic Stabilization Fund, the Rainy Day Fund was established in the 1980s after Texas experienced economic uncertainty due to collapsing oil prices, which had a disproportionate impact on businesses. from Houston.

Throughout his tenure as governor, Abbott has been criticized for not dipping into the rainy day fund during major crises, like Hurricane Harvey in 2017. He cannot access the fund himself – the Texas legislature must allow any use of his funds – but he can absolutely make it a political priority when the 87th Texas Legislature sits on Jan. 12, 2021. Or, better yet, Abbott can stop procrastinating now and call a special session of the Legislature, as he has done several times before. , to get the Texans money in time for the end of the year.

Right now, the best hope for legislative relief for restaurants is at the federal level. Called the RESTAURANTS Act, the bill would allocate $ 120 billion to provide direct financial assistance to bars and restaurants that have lost money in the past nine months. Despite the support of renowned restaurateurs across the country, including Chris Shepherd of Houston, the bill has failed to gain momentum in this current Congress.

Restaurants simply don’t have the time to sit back and wait for lengthy legislative appropriation processes that will take even longer to administer at agencies like the Small Business Administration. These establishments need help right now, and that is exactly why the rainy day fund is perfect for this crisis – the money is there, and it can be accessed quickly by lawmakers if there is. even a minimum of political will on the part of those who hold the scholarships.

Restaurants are trying to make it work with take out, but it’s not enough
Xinhua / via Getty Images

To be sure, accessing the Texas rainy day fund is the definition of a hot issue. Republican state leaders generally oppose the use of fund money, even during major disasters like Hurricane Harvey. But according to the Texas Tribune, even the most tax-conservative Republican lawmakers are likely to plan to dip into the rainy days fund in the next legislative session – but there is a lot of debate about how the money will be used.

And because Texas’ social safety net is virtually nonexistent, there are a lot of holes to fill. Rural hospitals need money to add beds and buy new equipment, for example, and schools need to figure out how to implement distance learning in a way that works for both students and teachers. – two things that will (hopefully) be addressed in the new budget. But it’s important to remember that restaurants, which seem to be a frivolity among these most pressing concerns, are also in desperate need of help.

In other states and municipalities, lawmakers have taken action to help restaurants during the COVID-19 pandemic. In New York, the city council adopted a measure which prevents landlords from preying on the personal property of restaurateurs who cannot pay their rent, among other measures such as capping third-party delivery charges and eliminating licensing fees for sidewalk decks. NYC has also implemented a moratorium on commercial evictions, which prevented restaurants in difficulty from being evicted from their spaces.

Texas has done next to nothing for restaurants. This has allowed them to sell take-out cocktails, which has certainly provided additional income for some establishments, but it is not enough. Neither authorizes the temporary transition of certain bars to restaurants thanks to a waiver issued by the Texas Alcoholic Beverage Commission. Texas restaurants need real tax relief to stay viable and pay their employees, and they need it now.

It’s easy to forget how much restaurants contribute to the economy. In Houston alone, known as the city of 10,000 restaurants, thousands of people are employed in the industry. When the first business closures took place in March, their tenuous understanding of economic stability was revealed as cars lined up for hours to pick up food donations and restaurants used their leftover food to prepare. meals for their now unemployed staff. As a result, nonprofits were left to take over. The Southern Smoke Foundation, which provides financial assistance to hospitality workers in need, responded to tens of thousands of requests for direct cash assistance from former waiters and cooks who were unable to pay their bills.

Of course, $ 10 billion won’t solve all of the problems Texas restaurants face today; but it would make a big dent for so many independent restaurateurs trying to figure out how to keep their heads above water until the meal situation normalizes. It could also discourage restaurant and bar owners from operating in dangerous ways just to make ends meet. More support is badly needed, but tapping into the rainy day fund would be a great start.

As many have speculated, the second wave of COVID-19 is likely to be worse than the first. Whether or not additional forced shutdowns are occurring (Eater has contacted Governor Abbott to see if he is considering further measures to stem the spread of the virus; an Abbott representative did not respond), fear of contracting COVID-19 still prevents people from entering restaurants.

This fear probably won’t go away anytime soon, and it probably won’t be until there is a viable and accessible vaccine. What’s more likely: Without swift intervention from the Texas legislature, many of the state’s best restaurants won’t make it until then.

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