Oregon and COVID-19: Businesses need dramatic help - right now
At the urging of local elected officials and health care leaders, Gov. Kate Brown took an unprecedented step Monday to protect Oregon lives from COVID-19 by issuing a stricter stay-at-home order.
Now the governor and many of those same regional and other elected leaders need to take further, aggressive — and yes, unprecedented — actions to prevent an Oregon economic collapse.
Government officials at all levels — city, county, regional, state and federal — must recognize that thousands of Oregon businesses will not survive this economic calamity unless they, and their employees, receive immediate assistance. This is not like past recessions, when the economic downturn came slowly and layoffs continued for months. The solutions now must be faster, broader and more creative than before.
Think of the places in your community you love to frequent — the restaurants, cafes, bookstores, salons and boutiques — and imagine what life will be like without them. It's a plain fact that many of these businesses, and the people they employ, will not make it back without a lifeline.
Most small businesses operate from month to month. They don't have the luxury of building up cash reserves the way government agencies can. If no one is shopping, there is no money to pay employees, the landlord or the tax bill.
That's why government leaders must go far, far beyond anything they've done before to make sure businesses have a least a shot at survival. Here are a few starting points:
• The state must eliminate the one-week waiting period for unemployment benefits. The suddenness of these layoffs and shutdowns means people, including some small business owners and managers, are in immediate need of cash. They shouldn't have to skip a week without pay.
• Along the same lines, the state must temporarily lift the requirement that people receiving unemployment be actively searching for work.
• The state should suspend — again temporarily — payroll taxes for small businesses.
• The state must allow businesses to defer payment of the new corporate activities tax, which is levied against a business's revenues, not its profits. Delaying these payments, or suspending the tax until the crisis is over, will help the cash flow for all businesses and allow them to keep more people on their payrolls.
There are many more measures the state must consider, some of which have been outlined by a coalition of Oregon businesses and industry report.
But local governments also have a big role to play. The city of Gresham has led the way with real examples of how municipalities can help businesses. Among other things, the city has:
• Placed a moratorium on commercial lease terminations if a business is unable to make its rent payments.
• Identified $400,000 in funding — using urban renewal dollars and Community Development Block Grant money, among other sources — to create a grant program for qualifying local businesses. This program started with restaurants and coffee shops, which were the first ordered to close. These businesses can obtain up to $10,000 in grant money to meet urgent cash needs, with one-third of that required to go to their landlords.
• Redeployed city planners, managers and other employees to form an emergency business-assistance team. These city employees are learning everything they can about Small Business Administration programs and other resources available to help local businesses. They are connecting business owners to those resources and helping them with paperwork and with navigating bureaucracy to get access to the assistance they need.
Other local governments can learn from these ideas and also should share what they are doing. Regional economic cooperation is a necessity right now, which brings us to two final points:
• All proposed tax increases must be placed on hold until the length and severity of the economic crisis is more fully understood. With the federal and state governments working to put money in people's pockets, it is irrational and counter-productive to take some of those dollars away with new taxes. If anything, local governments should be finding ways to relieve the tax burden right now.
• The Metro regional government, whose mission allows it to address issues of regional concern, must recognize that saving the local economy, while also preserving people's health, is of utmost regional importance. Metro currently has millions of dollars of general fund undesignated reserves. Metro councilors should discuss how they can use some of that money to match dollars spent by municipalities to help businesses.
If businesses do not receive immediate relief during this health-care crisis, then Oregon and its communities will never look the same again.
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