As COVID relief funding expires, what’s next?

DOVER — Friday marked the end of the third round of funding for businesses seeking COVID-related financial relief. Now, with previously allocated funding expiring at the end of the month, the ball is in Congress’ court.

Launched in August as a joint effort between the state and New Castle County, the DE Relief Grants program offered $150 million in federal funding to businesses throughout the state. The money comes from the CARES Act, legislation approved by Congress in March in response to the pandemic.

As of mid-November, 1,904 applicants had been approved for more than $61 million in funding, with another $31 million worth of relief under review.

Eligible small businesses and nonprofits were required to demonstrate a negative financial impact from COVID, with extra money going to some disproportionately impacted entities, such as restaurants.

Helpful as that and other assistance has been, it’s not enough, according to several people with knowledge of the situation. More money from the federal government is needed, which means Congress must come together and approve relief.

A thorough stimulus bill approved by the U.S. House of Representatives in May went nowhere in the Republican-controlled Senate, but last week a bipartisan group of senators announced a scaled-down version.

President-elect Joe Biden has called on Congress to approve something now, pledging to push for a larger package after he takes office in January.

The proposal, which totals $908 billion, includes $160 billion for local governments, $180 billion for unemployment insurance and $288 billion for small businesses.

So far, the measure has faced some opposition from both the left and the right: Members of the former object to the lack of direct stimulus payments to Americans and to protections against COVID lawsuits for businesses, while some Republicans believe the legislation is too expansive and costly.

Adding to the trouble is the fact Congress must approve a spending plan by Dec. 11 to avoid a government shutdown.

“I often say that if both sides don’t get everything that they want in a negotiation, then it was a probably a fair deal. The latest package being discussed is the result of bipartisan compromise, and it seems to be a good starting point,” Tom Carper, a Democrat serving as Delaware’s senior senator, said in a statement.

“It’s my hope that both sides will continue negotiating and find a way to get to yes because Delawareans can’t afford to wait longer. Rent is coming due. Families have bills to pay. And the holiday season is upon us, all as we see infections, hospitalizations and deaths trending in the wrong direction.

“We know that this winter will be particularly difficult, which is why we should be working overtime to find a principled compromise that brings real relief to Delawareans, helps to slow the spread of the coronavirus and ensures that our economy isn’t destabilized even further.”

According to Democratic Sen. Chris Coons’ office, Delawareans are seeking stimulus payments like the $1,200 checks sent to Americans this spring, additional unemployment benefits, forgiveness on late taxes and a continuation of the Paycheck Protection Program, which offered loans aimed at allowing small businesses to keep paying employees.

As of Nov. 27, Delaware had spent about $506 million of the $927 million it’s been allocated through the CARES Act, according to Auditor Kathy McGuiness’ office.

Plans are already underway to expend much of that remaining money, however: The Department of Health and Social Services, for instance, had spent barely 10% of the money earmarked for it, but applications for its $100 million Health Care Relief Fund are currently being reviewed, with payments set to be approved in the next few weeks.

According to Judy Diogo, president of the Central Delaware Chamber of Commerce, businesses need grants. Members of the chamber are unable to take on more debt, she said: “They just can’t. They’re not getting out of this and with the restrictions they don’t have any real hope of getting out of the situation right now.”

Grant funding will be needed until at least the end of 2021, she predicted, even if all COVID restrictions are lifted before then. So many entities are in the red thanks to the major drop in revenues and the corresponding “astronomical” debt they’ve had to take on to survive, Ms. Diogo said.

Of the chamber’s 830 members, about 27 have closed, with another 10 planning to shut their doors by the end of the year.

As hard as the hospitality industry has been hit, the crisis certainly is not limited to restaurants and similar businesses, Ms. Diogo noted.

In a statement, the National Restaurant Association described the $908 billion measure being considered by Congress as containing “some much-needed short-term stopgaps” and expressed hope legislators can work on “industry-specific solutions” after Christmas.

While businesses here remain under tight restrictions and a stay-at-home advisory will go into effect Dec. 14, she’s hoping residents will do what they can to support local companies in the meantime.

“We’re really asking, we are encouraging, we’re begging the residents at this juncture to help, help the businesses who have already been there for you, who have sponsored your kid’s little league and sponsored the Halloween parade,” she said.

Ms. Diogo and other business leaders are also urging state lawmakers not to approve measures like a higher minimum wage and paid family leave when the General Assembly convenes in January. Small businesses simply cannot bear the burden of these changes, Ms. Diogo emphasized.

Although Delaware’s unemployment rate has dropped from a staggering 15.9% in May to 5.6% in October, COVID cases are on the rise here, just as they are across the nation. Hospitalizations are at their highest level in almost seven months and the new daily positive cases are surpassing the prior highs from late April and early May, although testing has also become much more commonplace since then.

“A vaccine is on the way, but make no mistake, we are facing the most difficult few months of this crisis,” Gov. John Carney said in a statement announcing new restrictions last week. “I know we’re all tired of COVID-19 — but it’s not tired of us.
“We’re pleading with Delawareans to do the right thing. Wear a mask. It’s a simple sacrifice to protect others, and to make sure that Delaware’s children get an education. Do not gather with anyone outside your household. Wash or sanitize your hands frequently.”

Helpful Coronavirus links

Delaware Division of Health Coronavirus Page
CDC: About the Coronavirus Disease 2019
CDC: What to do if You Are Sick
Johns Hopkins Coronavirus Resource Center
AP News Coronavirus Coverage
Reopening Delaware: Resources for Businesses
Delaware Phase 2 guidance

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