Loans – Time to behave on reduction for companies, workers
If there’s any widespread floor to be discovered amid COVID-19, it is the settlement that financially struggling companies — and their laid-off workers — need assistance.
Officers on each side of the aisle agree extra must be finished. However the will to really get there appears to be lacking. Michigan officers are urging Congress and President Donald Trump to behave; Congress is at a stalemate over a second stimulus bundle, and negotiations have but to restart.
All of which provides to an ideal storm because the state once more restricts enterprise exercise to stem a second wave of coronavirus bearing down on Michigan.
This time, there aren’t any extra $1,200 stimulus checks, no paycheck-protection loans, and no extra expanded unemployment advantages.
The state’s most up-to-date public well being order focusing on eating places, theaters and casinos will imply “catastrophic failure” for a lot of small companies, in keeping with Brian Calley, president of the Small Enterprise Affiliation of Michigan.
“They’re simply in no situation to climate some of these situations, given the truth that a few of them have been required to be closed for 5 or 6 months earlier this yr,” Calley instructed Crain’s earlier this week, urging Congress and the president to behave.
Gov. Gretchen Whitmer has acknowledged the blow to enterprise and in addition urged federal officers to enact a reduction legislation. However there are methods each the federal and state authorities may assist.
Congress ought to:
- Resume negotiating an extension of the CARES Act, the large COVID reduction invoice handed by Congress in March. The act, which expires Dec. 31, prolonged unemployment advantages to 39 weeks as an alternative of the everyday 26 weeks established by the states. Additionally expiring is a vital provision permitting unbiased contractors and self-employed “gig” workers to obtain weekly assist much like different unemployed employees.
- Supply one other spherical of PPP (Paycheck Safety Program) loans and supply extra streamlined steerage to banks and companies on how one can get present loans forgiven. This system itself was a hit — greater than $16 billion in PPP funds have been supplied in Michigan to 128,159 companies, in keeping with S(BA) information by means of Aug. 8. However confusion over how one can get the loans forgiven stays a serious ache level.
State lawmakers ought to:
- Make everlasting a legislation Whitmer signed in October extending unemployment advantages for jobless Michigan employees from 20 to 26 weeks. The invoice, despatched to the Democratic governor by the GOP-controlled Legislature, was a brief extension that expires at yr’s finish. Making the extension everlasting, Whitmer has argued, is important for state advantages to be coupled with federally funded extensions for the long-term unemployed.
- Within the absence of any extra assist, even small measures of reduction deserve consideration. As Crain’s senior editor Chad Livengood reported final week, some companies house owners need lawmakers to lighten their property tax payments to no less than partially compensate for his or her losses.
Sen. Peter MacGregor, R-Rockford, proposed extending tax reduction on penalties and pursuits for companies that by no means reopened, equivalent to skilled sports activities stadiums and music venues.
“Quite a lot of these locations simply want extra time” to pay tax payments, MacGregor stated.
It isn’t an thought more likely to get a lot traction within the lame-duck Legislature, nevertheless. In July, Whitmer vetoed laws that may have let companies delay paying gross sales, use and revenue taxes. She contended such a measure would “push many native budgets over the precipice into fiscal disaster.”
However the governor is ignoring a rising actuality: Small companies shuttered by her administration’s orders to guard public well being are actually on the sting of collapse. That may trigger defaults on actual property leases, result in empty storefronts and depressed property values that may in the end harm the monetary backside line of municipalities and faculties. And it’ll result in job losses, leading to misplaced revenue tax for the state and extra pressure on an already strained welfare system.
The spring shutdown harm the economic system, however the CARES Act helped see companies and people by means of and led to a surprisingly robust rebound by means of the summer time. With out comparable assist now to bridge the nation to widespread vaccination, it will be a really lengthy winter.