Gov. Ned Lamont outlined measures that his administration is taking to soften the economic impact of the Coronavirus outbreak in a Thursday afternoon conference call with business leaders. These steps include loans, an expansion of unemployment benefits and delayed payment deadlines.
“I came out of running a small business,” said Lamont. “I went through the 2008-2009 freefall, and this is worse.”
Lamont said the challenge facing businesses is a sudden drop in revenue without a drop in fixed costs like payroll, rent, debt, health insurance, and utilities.
“I’m doing everything I can to reduce those fixed costs and make it easier for you to stay in business,” he said.
Lamont said that more executive orders will be coming in the next few days, and that he “probably” would order the closing of nail salons and barbershops within the next day.
On Thursday afternoon, Uncas Health District and Ledge Light Health District announced the closing of licensed cosmetology businesses effective 10 p.m. March 19.
Lamont said that he was trying to coordinate with neighboring states, because “it doesn’t work for me to close a bar in Greenwich and then just have someone drive over to Port Chester.”
He has already ordered the closing of restaurants for all but takeout and delivery as well as the closing of bars, gyms, malls, bowling alleys, and amusement parks. He also ordered the closing of schools in Connecticut until at least March 31.
Asked later on the call if he expected to shut down all “nonessential businesses,” Lamont did not answer directly, but said instead that the most important thing at the moment is for anyone who can to stay home and to avoid groups.
“Sunday night our bars were packed,” he said. “Monday they were closed, and I know the hardship that means for small businesses, but it’s the most important thing we can do.”
A survey of the impact
Also on the call, Department of Economic and Community Development Commissioner David Lehman shared early results of a survey asking businesses how the virus and responses to the outbreak have affected them.
Lehman said the results so far have suggest that 50 percent of businesses in the state are operating at or near capacity, about 30 percent at reduced capacity, and 12 percent are closed.
Eighty percent of respondents said they expect reduced sales as a result of the virus, and 45 percent said they expect a disruption to their supply chain, said Lehman.
“We understand the unprecedented demand shock that’s been felt especially by small and medium-size businesses, and we are doing everything we can at the state level to ease that, he said.
The outbreak has led to an unprecedented spike in unemployment claims, they said. Typically the Connecticut Department of Labor receives about 5000 unemployment claims each week, and the state received 12,000 on Wednesday and about 10,000 each day immediately before that.
Lamont said that the Connecticut Department of Labor had expanded unemployment benefits to make them available to workers who have been furloughed, hourly workers, and those who are not currently seeking work. Employees who have had hours cut can also receive benefits.
Lamont said that Congress had passed a bill that would allow for paid medical and family leave, and he added that the Connecticut General Assembly is working on a package to provide additional loans to businesses that could be passed in about a week.
Businesses with loans from Connecticut’s Small Business Express program have received a three-month extension on payments, and other businesses with loans from state agencies could be eligible for deferments on a “case-by-case” basis, said Lehman.
Connecticut will also delay passthrough entity and corporation entity tax deadlines by three months, Lehman said.
Additional relief loans are also available to Connecticut businesses through a disaster program with the federal Small Business Administration.
Lamont said that his administration is asking banks, landlords, utilities, and health insurance providers for leniency on payments by customers.
The state’s Public Utilities Regulatory Authority (PURA) has also ordered a moratorium until May 1 on shutoffs of electricity, water, and gas for customers — businesses and individuals — unable to make payments, Lehman said.
The state is looking to relax regulations elsewhere to allow retired nurses and nursing students nearing graduation to work in some capacity, Lamont said.
The state also plans to relax regulations on daycares to support first responders, and Lehman said that as of yesterday restaurants were allowed to sell alcohol with takeout orders.
Later in the call, Lamont was asked if he was considering any more severe steps such as a statewide shutdown.
“I really hope not. At the local level people have responded. I didn’t say no parades. People say we’re not going to do our parades.”
Lamont said that he’s worked with mayors, school superintendents, and business leaders who have taken initiative at the local level before or without state mandates.
“The local response has been really good. I worry about the ‘invincibles’, the Millennials, the young folks, we saw what happened in Italy, and if we can’t get people to stay at home, work from home — walk around the park, but stay home — we may have to reconsider.”
“I hope it doesn’t require anything more draconian,” said Lamont.