More state grants to aid vulnerable businesses amid new pandemic restrictions

Feature New State Grants To Businesses Panel

With positive COVID-19 test results on the rise in Wisconsin and federal stimulus negotiations stalled, the state of Wisconsin has announced more than $100 million in grants to small businesses in the Badger State.

The announcement was made the same day that Gov. Tony Evers, responding to the recent spike in COVID cases, issued a new statewide emergency order further limiting public gatherings to 25% of building capacity through Nov. 6. The order doesn’t have much impact for Dane County restaurants, which have been operating under a 25% restriction since July 1, but the impact could be profound statewide.

While business interests, including the Wisconsin Restaurant Association, criticized the order as economically devastating, the grant funding is designed to help small businesses and support tourism, entertainment, and cultural venues impacted by COVID-19.

News of the grants also came as negotiations between the Trump administration and Congressional Democrats on additional federal stimulus broke down.

The new state funding includes $50 million in “We’re All In” grants, an economic development program launched over the summer by the Wisconsin Economic Development Corp. They will go to small businesses that have suffered the most in the face of the pandemic, including restaurants, bars, hair and nail salons and barber shops, and entertainment venues. Like the $65 million in Phase 1 grants, funding for the second phase comes from the Coronavirus Aid, Relief, and Economic Security (CARES) Act, which is part of an earlier round of federal stimulus.

Missy Hughes, secretary and CEO of the WEDC, says the larger Phase 2 grants — $5,000 compared to $2,500 in Phase 1 — are designed to help vulnerable businesses make it through the winter. According to Hughes, businesses are telling WEDC that while they survived the first six months of pandemic restrictions, another six months of restrictions will challenge their survivability, and that’s why the state is making Phase 2 grants available now.

“It is with the intention to help businesses as much as we can to get through the coming winter months, whether they are facing rent or need additional PPE, and trying to meet those expenses as they get through the next couple of months,” she says. “We are looking at $5,000 each to 10,000 businesses all over the state.”

The recent rise in positive COVID tests was thought to be confined to communities with college campuses, but now other private gatherings are suspected of causing the rise in cases. “What we’re facing is community spread,” Hughes says. “The reality is that in April and May, Wisconsin did a great job of flattening the curve. Through the course of the summer, while everybody was outside, we were doing OK, but as we saw folks come inside with a more relaxed attitude to the virus, we’re starting to see increased numbers.

“The campuses have something to do with it,” she adds, “but the relaxed attitude around bars, restaurants, and gatherings is why you see the governor’s order today. COVID-19 is a continuing threat.”

That’s an order
The governor’s new emergency order restricts public gatherings to no more than 25% of a room or building’s total occupancy. The directive, which will remain in effect until Nov. 6, applies to any gatherings at locations that are open to the public such as stores, restaurants, other businesses that allow public entry, and spaces with ticketed events.

Business interests were swift in their criticism of the order. Kurt Bauer, president and CEO of Wisconsin Manufacturers & Commerce, notes that from the onset of the pandemic, Wisconsin businesses have taken countless steps to protect employees, customers, and the public, and he suggests businesses are being punished for the failure of others to comply with COVID-related public health guidelines.

“Medical professionals have said the recent spikes are because individuals are not following the same strict safety guidelines that businesses have implemented,” Bauer says. “Unfortunately, Gov. Evers’ order will cause even more harm to already-suffering businesses while failing to actually slow the spread of COVID-19 in Wisconsin. Our state’s employers have been true leaders when it comes to health and safety, and this order will just serve to economically punish them when they can least afford it.”

Bill Smith, state director of the National Federation of Independent Businesses, also says the order punishes small businesses. “The governor’s mandate will have a devastating impact on the financial stability of thousands of small businesses,” Smith says. “The overreaching order will not only result in a loss of jobs for those employed by small business but set Wisconsin’s economy backwards. We cannot afford to punish small business right now.”

Wisconsin Restaurant Association President and CEO Kristine Hillmer characterized the order as devastating and she expressed particular concern for Milwaukee restaurants, which were required to submit safety plans to the city before being allowed to reopen. As of Oct. 2, 850 Milwaukee restaurants had submitted safety plans and 315 were approved.

“It’s going to be truly brutal to anybody who is in the business,” Hillmer said in a report on WDJT, the CBS television affiliate in Milwaukee.

Hillmer also told the station that she now expects half of Wisconsin restaurants to fail if there is no additional help.

Hughes disagrees with the assertion that the governor’s new emergency order is a setback for the state’s overall recovery plan, Wisconsin Tomorrow. “In the Wisconsin Tomorrow report, we focus first and foremost on the connection between public health and economic health,” she states. “While this feels like a setback, this [COVID spike] could be really problematic, and that’s why it’s important for us to continue to tie public health and economic health together.”

Madison restaurateurs have been operating under a 25% capacity restriction since July 1. One Madison restaurateur, Caitlyn Suemnicht, chief operating officer of Food Fight Restaurant Group, expressed support for the new statewide emergency order. “It’s good that other restaurants in our state will have to abide by this,” she states. “Although it’s difficult, it’s going to help us get the virus under control, and that will be good in the long term for everyone.”

Taken for granted

The new round of state grants will help small businesses with the costs of business interruption or for health and safety improvements, wages and salaries, rent, mortgages, and inventory. Grant recipients become We’re All In businesses by pledging to observe health safety best practices in their facilities, and industry-specific safety guidelines can be found at wedc.org/reopen-guidelines.

In addition to the We’re All In grants, the new funding round allocates $20 million for the Wisconsin lodging industry, $15 million for live music and performance venues, $10 million to support privately owned movie theaters, $10 million in additional support for nonprofit cultural venues, and $4 million in additional investments for destination marketing organizations and tourism drivers. 

The program will be administered by the Wisconsin Department of Revenue in partnership with WEDC. For more information and to apply for program, business operators can visit the Department of Revenue website at revenue.wi.gov. The DOR will begin accepting online applications for the Phase 2 program on Oct. 19, and applications will be accepted through on Monday, Nov. 2. Grants will be issued on Dec. 4.

WEDC also is also currently sponsoring the We’re All Innovating contest, which will provide $3 million in grants to businesses finding new ways to respond to the pandemic, and the We’re All In Creative Workforce program with Arts Wisconsin to provide assistance to creative workers and arts projects.

In addition, WEDC has targeted microbusinesses through the Small Business 20/20 program and allocated $2.5 million in Ethnic Minority Emergency Grants to ethnically diverse microbusinesses.

Hughes also cited CARES Act funding deployed for broadband expansion. “With the Wisconsin Tomorrow report, our intention was that it would endure, recognizing that the virus wasn’t going away,” she states. “So, what are those things that we could focus on that would help us recover quicker?”

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