Apr 25, 2020 4 min read

The COVID-19 pandemic has had a devastating impact on all of us across the commonwealth. In the midst of this crisis, it has been inspiring to see so many front-line defenders step up to confront this threat every day – our doctors, nurses, first responders, and all others in public health who have put their own safety at risk for others.

But, just as these heroic efforts are carrying us through the public health crisis, we face an economic emergency on the other side. Our businesses – and our workforce – need more help. As local companies have been forced to shut their doors for weeks, their futures are uncertain. Among the hardest-hit industries across Pennsylvania has been the hospitality sector – particularly the restaurants we all know and love.

Pennsylvania’s food service industry has been decimated by the outbreak and the mitigation measures taken to thwart its spread. According to National Restaurant Association data, 96% of Pennsylvania restaurant owners have had to lay off or furlough workers since the beginning of March. The group estimates more than 332,000 Pennsylvania restaurant employees have lost jobs since the coronavirus began – roughly 81% of the entire workforce. While some restaurants have shifted operations to adapt, offering take-out or delivery options, many businesses are unable to make the transition.

Just this week, my office received a letter from David Lamatrice, president of the PIPA Group which owns Bistecca Steakhouse in Washington and The Clark Bar & Grill in Pittsburgh. Lamatrice explained how unique and dire the situation has become – that its employees cannot simply work from home. Despite applying for multiple loans through the federal government’s rescue legislation, it is nowhere near enough to stop the inevitability of layoffs for his employees who are just trying to survive and raise families. Michael Passalacqua, owner of Angelo’s in Washington, wrote, too, expressing in detail the impact the stay-at-home orders have had on his restaurant, concerned at the unlikelihood that any restaurant forced to close will be back at full strength any time soon.

These are just two examples, but there are countless more. Without additional help, the damage to this critical industry employing 10% of our entire workforce will be irreparable. The federal government’s $2 trillion CARES Act was meant to rescue our national economy. However, without additional measures, Pennsylvania’s restaurants will sink deeper into hardship, making their eventual revitalization less and less likely.

Thankfully, much-needed fixes are under consideration. The Pennsylvania Restaurant and Lodging Association (PRLA) has proposed a number of recommendations for future stimulus bills that confront these challenges- and I urge Congress to consider them right away.

Among their recommendations, the PRLA suggests the government make loan restrictions far more flexible. For instance, the U.S. Treasury mandated 75% of Paycheck Protection Program (PPP) loans be spent on payroll. That is simply not workable for an industry that operates with skeleton staffs and would essentially restrict the benefit to owners only. At this point, Congress needs to free up loan funds to be used for lease or mortgage obligations which are often a restaurant owner’s biggest monthly expense.

Flexibility on timing to use the loans, too, is critical for restaurants to have enough runway to rebuild operations before the loans expire. Right now, restaurants have eight weeks, but in reality, they may need months for a true ramp-up period to get back to anything resembling normal business. It is also imperative we increase and extend the actual PPP funding itself – which would assist so many businesses that may not have applied before the first round of funding ran out.

The reality is, true recovery for our restaurant industry will take much longer than the Treasury’s two-year loan maturity term suggests. Congress should ensure that any loan terms reflect that reality, and that those terms match congressional intent. Removing barriers and improving access to Economic Injury Disaster Loans will also be necessary given the disaster-level economic consequences facing the industry in Pennsylvania and throughout the country.

The CARES Act was certainly a great achievement. But it was flawed in ways that actually hurt some of Pennsylvania’s most cherished businesses – our restaurants. It’s critical that Congress stand up for these small businesses and expand the relief effort.

Camera Bartolotta is a state senator representing Pennsylvania’s 46th senatorial district.