Even though we’re almost nine months into the COVID-19 pandemic, it feels like Texas is starting all over again. Last week, the state became the first in the country to surpass one million diagnosed cases, and new case numbers across Texas continue to spike.
Also last week, Harris County judge Lina Hidalgo hinted that these trends could mean that another “shutdown” is on the way. No one is exactly looking forward to the prospect of restaurants and other businesses being forced to close their doors once again, but it seems like an inevitability at this point. And because restaurants have been identified as particularly dangerous places in terms of COVID spread, it’s likely that restaurateurs who have already dealt with so much in 2020 have even more months of lost revenue to come.
Which is exactly why it’s time for Governor Greg Abbott and the Texas Legislature, who have done so little to stem the spread of coronavirus and support those who have been financially impacted by the crisis, to tap into the rainy day fund to bail out restaurants. These establishments have been disproportionately impacted by the pandemic, and many won’t be able to wait for economic stimulus until next year.
For those who are unfamiliar, Texas’s rainy day fund is just that — a massive sum of money that sits in an account until it’s needed for emergencies like natural disasters. Right now, it’s estimated that the fund tops $10 billion, though some funds have already been earmarked for other purposes. Also known as an economic stabilization fund, the rainy day fund was created in the 1980s after Texas experienced economic uncertainty due to a collapse in oil prices, which had a disproportionate impact on businesses in Houston.
Throughout his time as governor, Abbott has been criticized for not tapping into the rainy day fund during major crises, like Hurricane Harvey in 2017. He can’t access the fund himself — the Texas Legislature has to authorize any use of funds from it — but he can absolutely make it a policy priority when the 87th Texas Legislature is seated on January 12, 2021. Or, even better, Abbott can stop dithering right now and call a special session of the legislature, as he has many times before, to get money to Texans in time for the end of the year.
At present, the best hope for legislative relief for restaurants is sitting at the federal level. Called the RESTAURANTS Act, the bill would appropriate $120 billion to provide direct financial assistance to bars and restaurants that have been hemorrhaging money over the past nine months. Despite support from high-profile restaurateurs across the country, including Houston’s own Chris Shepherd, the bill has failed to pick up steam in this current Congress.
Restaurants just don’t have time to sit around and wait for lengthy legislative appropriations processes that will take even longer for agencies like the Small Business Administration to administer. These establishments need assistance right now, and that’s exactly why the rainy day fund is perfect for this crisis — the money is there, and it can be accessed quickly by the legislature if there were even a modicum of political will from those who hold the pursestrings.
To be sure, accessing Texas’s rainy day fund is the definition of a hot-button issue. Republican leaders in the state generally oppose using money from the fund, even during major disasters like Hurricane Harvey. But according to the Texas Tribune, it’s likely that even the most fiscally conservative Republican lawmakers have plans to tap into the rainy day fund during the next legislative session — but there’s a lot of debate over how the money will be used.
And because Texas’s social safety net is basically nonexistent, there are a lot of holes that need to be filled. Rural hospitals need money to add beds and buy new equipment, for example, and schools have to figure out how to set up remote learning in a way that works for both students and teachers — both things that will (hopefully) be sorted out in the new budget. But it’s important to remember that restaurants, which seem like frivolity among these more pressing concerns, are also in desperate need of assistance.
In other states and municipalities, lawmakers have taken action to help restaurants during the COVID-19 pandemic. In New York City, the City Council enacted a measure that prevents landlords from going after the personal assets of restaurant owners who can’t pay their rent, among other measures like capping third-party delivery fees and eliminated licensing costs for sidewalk patios. NYC also implemented a moratorium on commercial evictions, which prevented struggling restaurants from being kicked out of their spaces.
Texas has done virtually nothing for restaurants. It has allowed them to sell cocktails to-go, which has certainly provided additional revenue for some establishments, but it isn’t enough. Neither is allowing some bars to temporarily transition into restaurants thanks to a waiver issued by the Texas Alcoholic Beverage Commission. Texas restaurants need real fiscal relief to stay viable and pay their people, and they need it right now.
It’s easy to forget just how much restaurants contribute to the economy. In Houston alone, known as the city of 10,000 restaurants, thousands of people are employed in the industry. When the initial business closures happened in March, their tenuous grasp on economic stability was revealed as cars lined up for hours to pick up food donations and restaurants used their remaining food to cook meals for their now-unemployed staff. As a result, nonprofit organizations have been left to pick up the slack. The Southern Smoke Foundation, which provides financial assistance to hospitality workers in need, has fielded tens of thousands of applications for direct cash assistance from former servers and cooks who have been unable to pay their bills.
Sure, $10 billion isn’t going to solve all the problems that Texas restaurants face right now; but it would make a significant dent for so many independent restaurateurs who are trying to figure out how to keep their heads above water until the dining situation normalizes. It could also discourage restaurant and bar owners from operating unsafely just to make ends meet. More support is absolutely needed, but tapping into the rainy day fund would be an excellent start.
As many have speculated, it’s likely that the second wave of COVID-19 is going to be worse than the first. Whether or not any additional forced closures actually happen (Eater has reached out to Gov. Abbott for more information on whether he is considering new measures to stem the spread of the virus; a rep for Abbott did not respond), the fear of contracting COVID-19 is still keeping people out of restaurants.
That fear isn’t likely to go away soon, and it probably won’t until there is a viable, accessible vaccine. What’s more likely: Without swift intervention from the Texas Legislature, many of the state’s best restaurants won’t make it until then.