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Virus afflicts Grand Island economy

Virus afflicts Grand Island economy

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Grand Island’s economy started out slowly in 2019 but rebounded as the year closed despite the disruptions caused by natural disasters and a depressed agricultural economy.

But with the spread of the coronavirus COVID-19, government officials are encouraging social distancing and limiting the number of people who can gather for an event. They are also urging people, especially those more vulnerable to the worse effects of the virus, to stay home. That has caused a major disruption in many areas of the local economy, especially the service industry, such as motels, restaurants and other service venues.

“We started slower in taxable sales last year than in 2018; however, the end of the year showed a bit of a rebound, said Cindy Johnson, president of the Grand Island Chamber of Commerce. “Motor vehicle sales were much stronger at the end of the year. That suggested that people were comfortable spending their money.” She also said that, unfortunately, with COVID-19 impacting all businesses, “I believe discretionary purchases will be impacted.”

Taxable sales in Grand Island last year were $1.043 billion, up from $1.026 billion in 2018. Motor vehicle sales also increased last year ($134.1 million) over the previous year ($129.7 million) in the city.

Johnson said people are already pulling back, uncertain whether they will see a reduction in work hours or even a temporary layoff or shutdown.

The Grand Island Chamber of Commerce has more than 700 members, many of whom own small businesses. The economic impact of COVID-19 is hitting them especially hard on them.

“Small businesses, many of whom operate on a very small profit margin, have no room for massive reductions in revenue,” Johnson said.

She said she has talked with many business owners throughout the Grand Island economy, especially the ones impacted by the effects of social distancing, including those who provide services and small restaurant owners.

“One restaurateur I talked to was in tears,” Johnson said. “The services are drastically cutting hours and staff. One intends to lay all employees as for all practical purposes, no revenue coming in,” she said. “This will have the unfortunate result of reducing discretionary income even more; it’s a vicious cycle.”

Johnson said one business owner she talked with was trying to figure out how to reallocate staff so that when business picks back up, he has staff.

“His fear is that if he lays off staff, they won’t be available when his business picks back up and he will be in dire straits,” she said.

Nebraska Commissioner of Labor John H. Albin is encouraging workers and businesses to utilize resources available through the Nebraska Department of Labor as they respond to COVID-19.

“We understand this is a time of uncertainty for all Nebraskans, and we are here to support workers and employers as they navigate this challenging situation,” Albin said.

Those resources include:

n Any worker in a nonpaid status due to COVID-19 may file a claim for unemployment insurance benefits. Unemployment claims in Nebraska are filed online at NEworks.nebraska.gov. The NEworks mobile app is available to download for free.

n Earlier this week, Nebraska Gov. Pete Ricketts announced that from March 22 through May 2, NDOL would be waiving the requirement to search for work, as well as the requirement to serve an unpaid waiting week once eligibility is determined. Employers whose workers file claims tied to COVID-19 will also not be charged for those benefits. Nebraska’s Unemployment Insurance Trust Fund will instead be used.

n If employers are laying off a large number of workers, they can file claims in NEworks on behalf of their workers. Instructions are found on the NDOL website dol.nebraska.gov/UIBenefits.

n In addition to regular unemployment insurance benefits, employers also have the option of using Short-Time Compensation. The program helps prevent layoffs by allowing employers to uniformly reduce affected employees’ hours by 10% to 60% while permitting the employees to receive a prorated unemployment benefit. For more information, see dol.nebraska.gov/stc.

n Due to high call volume, unemployment insurance questions should be emailed to ndol.nichelp@nebraska.gov and should include contact information. Live chat assistance is available on NEworks.nebraska.gov.

n Questions specific to short-time compensation should be sent to NDOL.STCLegal@nebraska.gov

n There is no requirement to visit a job center to access the benefit programs. The job centers are adhering to social distancing guidance to protect the health of customers and the NDOL team.

Ricketts, this week, also issued an executive order to provide relief to restaurants and bars as they continue to serve Nebraskans during the pandemic.

In keeping with federal guidelines, Nebraska has issued guidance that restaurants and bars are limited to 10 patrons as part of a nationwide social distancing effort to slow the spread of COVID-19.

The executive order will permit restaurants and bars statewide greater flexibility to serve customers during the current public health emergency.

n Liquor licensing — Establishments such as pizza parlors (Class A license holders) will be able to sell beer to customers on take-out or delivery orders. Restaurants (Class I license holders) will be able to sell beer, wine and spirits to customers placing take-out or delivery orders.

n Alcohol sales — To encourage social distancing, restaurants and bars will be permitted to sell alcohol on drive-thru or curbside orders without customers having to exit their motor vehicles.

n Temporary operating permits will be extended from 90 to 180 days.

n Waiver of excise tax penalties — Excise tax payees still have the duty to file and pay the excise tax, according to statute. However, the executive order waives penalties for late payments.

n Payment of wine and spirit deliveries — Under normal circumstances, wine and spirits deliveries must be paid within 30 days. The executive order will give restaurants and bars 90 days to pay for deliveries during the COVID-19 emergency. Beer still must be paid for upon delivery.

On Friday, Ricketts said the Small Business Administration has issued a statewide economic injury declaration for Nebraska. Small businesses can apply for SBA disaster assistance loans.

“As Nebraska steps up its efforts to combat coronavirus, we’ve limited the size of public gatherings and asked people to stay home when possible,” Ricketts said. “These temporary measures are vitally important to public health, but they present challenges for the day-to-day operations of many small businesses. Nebraska is grateful to the SBA and Administrator (Jovita) Carranza for offering much-needed financial assistance to our hard-working store owners and entrepreneurs at this time.”

Tony Goins, director of the state Department of Economic Development, said, “SBA loans will give small businesses the needed financial resources to weather the current pandemic and will set them up to thrive throughout the rest of 2020.”

SBA Economic Injury Disaster Loans offer low interest rates and long-term repayment options. Terms are determined on a case-by-case basis.

Small businesses and private nonprofit organizations can apply for an SBA Economic Injury Disaster Loan at disasterloan.sba.gov/ela. Applicants may also call SBA’s customer service center at (800) 659-2955 or email disastercustomerservice@sba.gov.

The Department of Economic Development has teammates available to assist businesses with their questions. Contact information for the department’s regional development team can be found at opportunity.nebraska.gov/nded-covid19, which also has information on SBA resources.

The federal government is also working on a economic relief package to help workers and businesses through the quarantine period of COVID-19.

“The federal legislation under consideration also has the potential to provide assistance, not only to individuals but to business and industry as well,” Johnson said. “It is so critical that we remember the importance of businesses staying in business so when COVID-19 has run its course and done its damage, people have jobs to come back to.”

As more and more businesses experience customer slowdowns, “more and more employees are impacted,” she said. “These are challenging times.”

Johnson urges the public to check gichamber.com to find out how businesses are continuing to provide services and products as the COVID-19 situation continues to evolve.

“We will share this information as it is updated,” she said.

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