Myers’ Map: A New Way Forward – Help for Hoosier Small Businesses Amid the Coronavirus Economic Fallout

April 29, 2020

As of April 29, 2020: We’re approaching the end of the beginning of the COVID19 pandemic in Indiana. Although today cases and deaths are still increasing, they’re likely to peak soon. The strong temptation will be to release current restrictions and return life to “normal”. Understandably, many Hoosiers are anxious to return to work and for the economy to reopen. COVID-19, the illness caused by the novel coronavirus, has forever changed the world, nation, and state in ways never before imagined. While Hoosiers will overcome this and normalcy will eventually return, both will take some time, since there’s no clear path to our pre-coronavirus norms until we have a vaccine.

As a former Health Commissioner and successful small business owner, I have the experience and the will to lead Indiana out of this health and economic crisis. Our recovery will take an aggressive action plan that changes our approach to building a sustainable health care infrastructure and to stimulating and eventually growing the economy. We will need to think very differently about our state budget, both revenue and spending, and our safety net programs, both in solvency and reach. We will need collaboration from all sectors, all geographies, and all Hoosiers who, like me, love our state.

While I’ll continue to push the Holcomb Administration for massive new testing capabilities and an aggressive surveillance system, it’s time our state leaders address the economic damage done by coronavirus. Preparing to reopen our economy must involve a plan to help small businesses and Hoosier workers recover. That’s why I released my Hoosier Manufacturing in the Wake of Coronavirus Plan – a bold vision to boost manufacturing for medical equipment and create a medical supply chain here in Indiana to eliminate our dependence on foreign suppliers and create new jobs, but this is only the start. We need both plans, at a minimum, to jump-start our economy, with the full understanding that the crisis could worsen and our needs could increase.

Although Governor Holcomb acknowledges small businesses are our economic drivers, he’s done little to help them survive social distancing measures and forced closures other than informing them they’re eligible for federal assistance.1 Meanwhile his peers in other states, like Ohio Governor DeWine, Maryland Governor Hogan, and California Governor Newsom, are getting to work providing state-level responses to support their state’s respective small businesses overcome these difficult times, because that’s what leaders do.

The truth is Indiana wasn’t prepared for a health crisis of this magnitude or the financial fallout on Hoosier businesses and workers. According to a recent survey, about 70 percent of most small businesses expect to remain open by the end of the year when they’re told to expect a one-month crisis.2 However, when small businesses are told to expect a six-month crisis, the probability of remaining open by year’s end plummets to 38 percent for most industries, with even lower expectations for small businesses, including some restaurants.3 The longer lockdowns and closures extend beyond the one-month mark; the ability for small businesses to recover diminishes and job losses mount. We can’t allow them to fail. Indiana received just over $2.6 billion is federal coronavirus relief funds, with about $1.4 billion to state government and $1.2 billion to local governments and possibly more aid will follow. 4 We must maximize this federal support to help our small businesses recover.

The federal Paycheck Protection Program (PPP) meant to provide forgivable loans to eligible small businesses to cover payroll and operational expenses is well intended but has been challenged in execution. It simply isn’t enough to keep many of our struggling small businesses afloat even with a second round of funding. Our minority-, women-, veteran- and disability- owned businesses have largely missed out on federal aid, although they’re more vulnerable to economic damage, both because they tend to be in industries hardest hit by the pandemic and due to the lack of a financial cushion.5 According to the Indiana chapter of the National Federation of Independent Businesses, 80 percent of their members received nothing from the first round of PPP funds.6 Indiana small businesses need more than a stimulus. They need real help and they need it now and into the foreseeable future.

At the same time, the increased volume of unemployment insurance claims by Hoosiers is now jeopardizing the fund’s solvency due to chronic underfunding by Indiana’s string of Republican Governors, including Governor Holcomb. Indiana isn’t ‘remarkably prepared’ to handle this crisis, as Governor Holcomb said we were back on March 10, 2020. 7 It appears we’re woefully unprepared. Prior to the coronavirus pandemic, Indiana’s unemployment insurance fund was among the lowest rated in the nation for financial stability, and is in danger of running out of money.8 It’s projected that Indiana’s unemployment rate will climb close to 20 percent by this summer.9

As Governor, I’d immediately put in place the following financial protections to better protect our jobs and our lives.

Establish a state stimulus program to infuse more money into our small businesses, including those hard-hit minority-, women- veteran-, and disability-owned businesses for payroll, operational expenses, and working capital to help bail out our biggest job creators. 3

•Establish a state stimulus program to infuse more money into our small businesses, including those hard-hit minority-, women- veteran-, and disability-owned businesses for payroll, operational expenses, and working capital to help bail out our biggest job creators. 3

• Develop a Financial Assistance Tracking System to monitor where government aid goes in Indiana to ensure all Hoosier businesses have equal access to funding.

• Form a Small Business Recovery Task Force, like Ohio’s 2020 Economic Recovery Task Force10, to help get Hoosier businesses back up and running and to identify and remove legislative obstacles now in their way.

• Create a robust Buy Indiana First campaign to encourage Hoosiers to buy from Indiana small businesses.

• Establish an incentive program to support Hoosier manufacturers producing protective medical equipment for Indiana medical professionals and first-responders, like Maryland11 has done.

• Delegate small business navigators to help small business owners, and in particular those in our minority communities, sort through loan and grant programs and apply for financial assistance.

• Create a state subsidized meals program to make meals for Hoosier homebound seniors prepared by local restaurants and to the fullest extent possible using food grown by Hoosier farmers to support our restaurant industry, create jobs, and generate sales tax revenue for local governments, while also providing an important public service, similar to a program recently announced by California Governor Newsom. 12

• Supplement existing programs providing relief from tax payments and rent obligations; not just for the next three months but the next nine months.

• Work with the mortgage industry to remove mortgage defaults, related to the coronavirus, from credit reports to ensure small businesses can continue to secure loans.

• Double our unemployment claim processing capacity to handle increased volume to get money into the hands of Hoosiers who need it most faster.

• Exclude small businesses, with fewer than 100 employees, from obligations to pay higher unemployment insurance premium rates for at least one year.

• Call on Indiana’s Congressional Delegation to support legislation to provide grants for operational costs to small businesses for each month of compliance with a statewide closure of nonessential businesses.

Conclusion 

The coronavirus health threat will challenge our resilience in ways we haven’t fully realized yet. Hoosiers are strong and we’ll rise above the health and economic crises even stronger if we act cautiously and allow science to determine our future. If we want Hoosier businesses to survive and then to thrive, it can never again be “business as usual”. We have to become stronger than ever and to fight harder than ever to win.

 


  1. Gov. Holcomb Announces Small Business Assistance in Response to COVID-19, March 19, 2020 press release
  2. How Are Small Businesses Adjusting to COVID-19? Early Evidence from a Survey?” The National Bureau of Economic Research, April 2020
  3. Ibid.
  4. Estimated Allocation of Coronavirus Relief Fund ($ in millions), NCSL
  5. “COVID-19 could devastate minority-owned businesses, amid fears they’ll also miss out on aid,” Washington Post, April 2020
  6. “No relief loans feels like ‘punch in the gut’ for Indiana small businesses,” Fox 59, April 2020
  7. “Governor says Indiana is ‘remarkably prepared’ for COVID-19,” 13 WTHR, March 2020
  8. “Indiana’s unemployment funds will likely run out, experts say,” April 2020, South Bend Tribune
  9. “Unemployment: These are every state’s claims since the coronavirus shut the economy down,” USA Today, April 2020
  10. “Ohio 2020 Economic Recovery Task Force aims to help small businesses recover and reopen,” News 5 Cleveland, April 2020
  11. “Here is how Maryland’s $175 million small business coronavirus relief program will work,” Baltimore Sun, March 2020
  12. WATCH: Taxpayers will pay restaurants to feed seniors in California, governor says, PBS, April 2020

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