Rayno: A Whole Lot Of CARES Act Money — But Way More NH Need

From InDepth NH:

By Garry Rayno, InDepthNH.org

CONCORD, NH — The state is taking steps to reopen, but a return to normalcy is a pipe dream likely to last for years, not months.

Surviving the pandemic intact is everyone’s goal — individuals and businesses — but no more realistic than a quick return to normalcy. There are industries that will be forever changed by the pandemic and the measures employed taken to slow its spread.

Many ate frequently in restaurants crowded with tables and traveled regularly by air. Frequent trips to grocery stores were as routine as visits to coffee shops.

Malls were hangouts and retail bonanzas. You can find almost anything you need at mammoth department stores like Target and Walmart if you dare go there now.

Some business sectors have been hard hit by the economic shutdown as the growing ranks of the unemployed attest in New Hampshire and nationally. Perhaps the retail, service and hospitality industries are experiencing the greatest disruption.

Hospitals, a core defense against the COVID-19 epidemic, experienced significant financial losses and furloughed thousands of workers in New Hampshire as they ended lucrative elective procedures to prepare for the onslaught of infected patients.

The nonprofit sector, which encompasses a broad array of organizations from the health and social service providers the state government depends on, to concert halls, playhouses and museums, has felt the staggering impact of the pandemic.

Service and social agencies struggled to maintain staff as the demand for services increased and changes in the work environment meant greater costs to protect clients and workers.

Concert halls and museums have been closed since the middle of March. A return to theater seating will not happen any time soon under social distancing requirements.

In the economic devastation brought on by the virus, many feel the pain, from business owners, to clients to workers.

In the early days of the pandemic, Washington focused first on providing money for federal and state agencies needed to fight and contain the virus, then on helping the millions of people in financial peril from job losses, small businesses closures or who were infected by the disease. The blow was made a little softer by paid family leave, sick days, and school and senior food programs.

Unemployment benefits and eligibility were expanded, moratoriums on evictions and foreclosures implemented, as schools and nonessential businesses were shuttered.

CARES

Then came the CARES Act spending more than $2.6 trillion in relief and stimulus. The federal legislation was drafted by U.S. Senate Republicans, but later modified to garner enough Democratic votes to pass.

The CARES Act was heavy on help for businesses, yes every taxpayer making less than $100,000 received or was supposed to receive $1,200, but that cost was minimal compared to the money available for businesses large and small.

The cash payments cost $300 billion, but large businesses received $500 million, small businesses $380 billion and business tax breaks total $280 billion.

The problems with forgivable loans for small businesses through the Payroll Protection Program are legendary as large businesses went to the front of the line and drained the fund. Congress added additional money and is expected to make other changes to the program to correct the problems.

Flexibility

The CARES Act gives states flexibility in spending the money with a few exceptions, one of which is government — state or local — cannot use the money to backfill weak revenue streams another casualty of the virus.

Gov. Chris Sununu unveiled his plan May 15 allocating $595 million of the $1.25 billion federal CARES Act money for the state on top of the $250 million he had previously spent, leaving about $450 million for future use.

The largest segment of the money is $400 million for the Main Street Relief Fund for businesses with revenues below $20 million annually run through the Department of Revenue Administration and the Governor’s Office for Emergency Relief and Recovery. He also included another $30 million for businesses through the Business Finance Authority.

He allocated the money three days after the Legislative Advisory Committee submitted its $345 million proposal and four days before the Stakeholder Advisory Committee finalized its recommendations.

Business Tilt

Of the money the governor has allocated, businesses would receive more than half, but that is not the whole picture.

The CARES Act’s Payroll Protection Program has provided $2.6 billion to New Hampshire businesses in forgivable loans if they maintain payrolls for a certain period of time.

Together with the $400 million in Main Street aid, that is $3 billion in relief for state businesses hit by the economic shutdown.

Will that cover all the losses? Probably not, but that is still a lot of money injected into the New Hampshire economy.

Businesses employ people and pay taxes, and if the money is used to address tax liability on the state and local level, that will help.

But nothing in the state or federal aid guidance says property taxes have to be paid with the money.

With about one-fifth of the state’s workforce receiving unemployment benefits and businesses suffering, there will be a lot of delinquent property tax payments July 1.

You have to wonder how many of the small businesses who did or will receive aid survive through the end of the year.

One group has not received any aid to date from the state’s CARES funds and that is those out of work or economically strapped. Money is going to those on the front lines of the health crisis such as workers providing Medicaid paid services at long term care facilities or through home care, and those on the front lines like police, fire, emergency medical workers and state liquor store employees.

If you are unemployed, there is nothing to date for you in what has been distributed from the CARES Act.

Renters will need aid once the eviction moratorium ends, and financially struggling homeowners will need help when the foreclosure moratorium ends.

Without help many low-income earners and those on unemployment will have no place to live in the tight rental market.

There are other areas that need attention as well.

Hospitals

New Hampshire hospitals received over $300 million in federal relief money, but the head of the New Hampshire Hospital Association Steve Ahnen said that covers about one-third of their losses.

Hospitals are slowly returning to performing time sensitive procedures which will help the bottom line, but Ahnen and members of the legislative advisory committee were concerned about cash flow problems in the next month or two.

The legislative committee recommended the state use $100 million to help the hospitals for some larger hospitals.

Sununu established the $50 million Health System Emergency Relief Fund as loans to hospitals and other health care providers early in the state’s response and added another $50 million last week. Sununu said the loans may actually be grants but broadened who is eligible for help beyond hospitals and allocated $30 million of the money for long-term care providers.

Nonprofits

The Community Development Finance Authority, the New Hampshire Charitable Foundation and the Center for Nonprofits presented a $125 million proposal to help the broad range of organizations under the nonprofit umbrella.

The legislative committee proposed $30 million with the expectation of revisiting the sector in a month or two, while Sununu’s proposal allocates $60 million for the nonprofits.

Childcare

The governor and the legislative committee agreed on spending $25 million for critical childcare services, but allocated the money differently.

Lawmakers suggested the fund be available to facilities to use as they reopen to provide childcare for workers going back to work, while Sununu allocated it through a joint program between the departments of health and human services and education working to improve the childcare system.

The unmet needs today are much greater than the $400 million left in the state’s CARES Act fund.

Without additional federal aid, many people and businesses will find a very rough path “to the other side” of the COVID-19 pandemic.

Garry Rayno may be reached at garry.rayno@yahoo.com.

Distant Dome by veteran journalist Garry Rayno explores a broader perspective on the State House and state happenings for InDepthNH.org. Over his three-decade career, Rayno covered the NH State House for the New Hampshire Union Leader and Foster’s Daily Democrat. During his career, his coverage spanned the news spectrum, from local planning, school and select boards, to national issues such as electric industry deregulation and Presidential primaries. Rayno lives with his wife Carolyn in New London.

InDepthNH.org is New Hampshire’s only nonprofit, online news outlet dedicated to reporting ethical, unbiased news and diverse opinions and columns.

This story was originally published by InDepth NH.