State legislators told hospitality industry ‘on life support’

Published 12:00 am Wednesday, April 1, 2020

By Liz Moomey

SALISBURY — N.C. Restaurant and Lodging Association President Lynn Minges on Tuesday had a message for the state representatives in the COVID-19 Economic Working Group: “We really need some help immediately.”

Minges said Gov. Roy Cooper’s March 17 executive order that limited the sale of food and beverages to carry-out, drive-thru and delivery has the hospitality industry reeling. She said the state’s 18,000 restaurants and food service establishments were “essentially shuttered” after no longer serving prepared meals to dine-in customers inside their restaurants. Many are limping along on limited capacity.

“That is really not a sustainable model for them to be able to maintain very long,” Minges said. “They are essentially on life support.”

She said restaurants employ 13% of the state’s workforce and bring in $23.5 billion in sales annually. The effects of COVID-19 pandemic has brought on “tremendous job loss and loss of revenue into our state.” The association estimates 70% of restaurant employees were sent home last week and that job losses are expected to continue with a stay-at-home mandate in place. In the hotel industry, about 23,000 jobs have been lost across the state. That industry usually employs 80,000 people, Minges said.

Across the state, there have been 305,000 initial unemployment claims since March 16, with nearly nine in 10 being virus-related.

“We’re facing unprecedented challenges,” Minges said.

Minges said the businesses owners are cash-strapped, with some making payroll payments on credit cards. They don’t have money to pay other bills, like rent, equipment leases and vendor payments.

“They need cash in their pockets today,” Minges said. “They cannot make their payments today. They cannot make payroll today. They are really struggling and trying to find their way, reaching out for a lifeline.”

Rep. Billy Richardson, D-44, replied that legislators need to intervene. To that, Minges said the association would “welcome” legislative action.

Rep. Harry Warren, R-76, asked if help is being requested for owners “across the board” or just a specific number of entities.

Minges’ answer to the Rowan County legislator’s question was that several owners are struggling with displacement of their workers, and “in many of these cases, these teams have been together as families serving together in restaurants and hotels for 20 years.”

Meanwhile, Andy Ellen, president and general counsel of the N.C. Retail Merchants Association, listed the industry’s concerns and suggestions, which included one set of rules for the entire state, allowing employers to COVID-19-relacted unemployment claims for their employees related and using funds for Job Development Investment Grants to keep so-called Main Street businesses alive.

Rep. Julia Howard, R-77, who is a co-chair of the working group, said Ellen’s requests are among the items addressed in the legislature’s draft COVID-19 Response Act.

A bit of cold comfort from those already reeling, the state Revenue Department on Tuesday announced some changes sought by businesses. The agency won’t impose monetary penalties on late filings or payments of sales, witholding and other taxes due since March 15 as long as they’re turned in by July 15. The April 15 income tax filing deadline already was pushed back by three months.

General Assembly leaders and Cooper said in a statement released by House Speaker Tim Moore later Tuesday that they were committed to passing a law waiving the interest accrued on these tax payments that otherwise aren’t turned in by the original deadlines. The General Assembly session is supposed to convene April 28. Some want legislators to gather earlier.

This story contains content from the Associated Press.