by Jon Sanders
Research Editor and Senior Fellow, Regulatory Studies, John Locke Foundation
On Friday, Donna Martinez posted a devastating post with audio so you can listen to small business owners testify on House Bill 334, which would let business owners to deduct expenses related to the federal Paycheck Protection Program (PPP), as they can in other states. As Martinez noted, PPP was “a lifeline to keeping them afloat and their employees on the payroll.”
But their testimonies also showed just how devastated their industries were. They represented breweries, gyms, fitness centers, and restaurants — all of which are among the businesses that Cooper made especial point to shutter and whose business models he took pains to dismantle. His shameful string of vetoes made it seem as if he was collecting the pelts of any small businesses he couldn’t give incentives to.
As Martinez described it, “their livelihoods had been rocked.”
One of the testimonies was from Jason Smith, who owns with his wife Harvest 18 restaurant in Durham and Cantina 18 in Raleigh. Smith testified that before PPP, even with curbside takeout and only 15 percent of his staff working, “we were still losing over $2,000 a day.” Even now, as the restaurant industry experiences an upswing, he said, “It will take me at least another year to get back to where I was prior to the pandemic.”
Does losing over $2,000 a day sound unbelievable? It tracks, unfortunately. When one of my favorite restaurants finally reopened in Raleigh, I spoke with the owner about how things were going now that they were back up and running. He told me that with all the restrictions and the partial opening, he was losing $10,000 per week. Businesses don’t simply recover from such sustained losses.
For those of us in the possession of a memory, Cantina 18 may sound familiar. Here’s why, from Cooper’s twitter feed on March 22, 2020, days after shutting down bars and dine-in restaurants and one day before shutting down hosts of other business:
Ironically, Cooper is one of the lucky patrons whose favorite place hasn’t been totally destroyed by Cooper’s orders. But it’s one thing to come out on the other side; it’s yet another to manage the next few years having such deep losses forced on your business. Or even just the next year — a CNBC survey of small business owners in late February found that only a little more than half of them (55 percent) thought their businesses could stay open for more than a year.
That proportion has fallen as restrictions like Cooper’s have been continued. Back in the summer of 2020 and even the fall, two-thirds of small business owners thought they could last more than a year.