The eyes of independent restaurant owners and passionate members of the dining public turned to Washington this week as Congress returned to session. One challenge facing lawmakers in the coming weeks: the future of independent restaurants.
The coronavirus pandemic has crippled the independent restaurant industry in Texas and across the country over the past four months. Fearful for the survival of an industry that provides millions in tax revenue and employment for hundreds of thousands of workers while operating on tight margins, a group of chefs and restaurant owners formed the Independent Restaurant Coalition this spring in an effort to lobby Congress for assistance.
The group believes that without more government aid, up to 75% of independent restaurants will close due to the pandemic. The coalition’s leadership, which includes Austin chef Kevin Fink of Emmer & Rye and Hestia, has been pushing for more public awareness and legislation.
Sen. Roger Wicker, R-Mississippi, and Rep. Earl Blumenauer, D-Oregon, introduced legislation in June that would create a $120 billion fund for independent restaurants to help them recover from the economic devastation of the pandemic.
The RESTAURANTS Act — the acronym stands for "Real Economic Support That Acknowledges Unique Restaurant Assistance Needed To Survive" — would provide grants to independently owned restaurants that bring in $1.5 million or less in revenue and operate fewer than 20 locations. The money would be allocated for the purposes of rent, food, payroll, benefits and other associated operational costs not covered by the Paycheck Protection Program created in March.
Fink said the grants, which in the proposed legislation would not have to be paid back, could give restaurant operators some breathing room and a chance to make sound business decisions.
"If you’re fighting for your life and shelter and survival every single day, you’re not making decisions based on proper longevity; you’re making decisions based on pure survival," Fink said, adding that the bill could help ameliorate the pain brought to an industry that public officials and media reports labeled as uniquely unsafe when the pandemic hit.
Texas restaurants generated $66 billion in sales in 2018, according to the Texas Restaurant Association, and accounted for about 10% of employment and sales tax in the state. The Independent Restaurant Coalition estimates that the RESTAURANTS Act would put more than 370,000 Texans back to work and save the state $2.7 billion in unemployment benefits and insurance taxes. Beyond its employees, the restaurant industry affects the lives of people throughout the food supply chain, from fishermen to truckers, ranchers to textile makers.
"It’s the second-largest industry in the country, and it deserves to have some form of respect, and it deserves a voice, and it deserves a lot of championing," Fink said. "You have the ability through your voice to step out in front of your friends and your community and your family and say, ‘I thought through this; I’ve read this; and I think this is a viable solution to help a particularly affected industry that deserves some form of support.’ "
Rep. Lloyd Doggett, a Democrat whose district includes part of Austin and stretches down to San Antonio, lives in the state capital and recently saw one of his neighborhood favorites close, Blue Dahlia on East 11th Street. He agrees with the coalition that independent restaurants are uniquely vulnerable to the economic pain inflicted by the pandemic.
"It’s clear that what is always a competitive struggle has just become an incredible mountain to climb for many of these places," Doggett told the American-Statesman last week.
Doggett said he signed on as one of about 80 co-sponsors of the legislation as a way of expressing his support for independent restaurants, though he expressed concern about industry-specific bills and inconsistencies that could arise when industries are singled out for help.
"I’m hopeful out of the negotiations that something will either specify restaurants or will provide them more of the kind of relief they are seeking," Doggett said. "It’s less likely that this specific bill, which has not yet come out of committee in the House, is likely to pass by itself. But it may have the effect of accomplishing what they want to see accomplished."
Doggett believes that the kind of independent restaurants noted in the proposed legislation should receive priority in terms of financial assistance, adding that large, corporate restaurant chains have other public markets, federal funding and access to capital that the smaller operators do not.
A staffer for Sen. John Cornyn of Texas told the Statesman via email that the senator supports the bill but expressed concern that it will not help restaurants with more than 20 locations.
Cornyn plans to introduce a bill that his office said would protect Texas jobs at restaurant chains ineligible for other coronavirus relief programs. According to a spokesperson, the SNACK Act would provide federally backed, low-interest U.S. Treasury loans to restaurants that are publicly traded or have more than 20 locations.
Cornyn and Sen. Chris Murphy of Connecticut last month also introduced the State Emergency Restaurant and Vendor Enhancement and COVID-19 Anti-hunger Restaurant Relief for You acts, which would funnel money to participating restaurants that contract with states to provide meals for low-income and at-risk populations.
Doggett said legislation of any kind will have a limited effect on the future of restaurants until there is a greater emphasis on the health care crisis brought on by the pandemic.
"I just think, overall, the price being paid for what I view as (President Donald) Trump’s incompetence and (Gov. Greg) Abbott’s interference is a really big one," Doggett said. "There are no bills we can do up here to protect independent restaurants or other small businesses until we resolve the health care aspects of this crisis. And at the moment, if anything, we’re moving in the wrong direction."
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