The new federal stimulus package will bring relief to Johnson County residents and businesses hit hard by the pandemic, but some say it’s not enough.
The $920 billion stimulus package, which passed in late December, is much smaller than the March CARES Act, which provided a $2.2 trillion aid package to ease the burden of widespread business shutdowns.
Individual payments
The new stimulus package provides $600 individual payments to Americans who make less than $75,000, and $600 per dependent under age 17. Individuals who make more than $75,000 get reduced payments. This is compared to the CARES Act’s $1,200 stimulus checks and $500 payments per dependent child under age 17.
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A $600 stimulus check does not go far in Indiana or anywhere around the county, critics say. For example, the check is nearly $250 less than the average rent in Franklin, which is about $840.
And under both aid packages, working college and high school students cannot receive individual checks if their parents claimed them as dependents on their tax forms, nor do parents receive payments on behalf of adult dependent children.
Readers who shared their thoughts about the new stimulus were most concerned about individual payments, particularly the low amount and that it was given so late in the pandemic.
“Hush money is all it is. Pennies at that. It’s insulting to the people who lost their businesses and homes,” Stephanie Burks said in a Facebook comment.
Several readers were also upset that their working college students and high school seniors were left without a check.
“Evidently Congress thinks this entire age group of 17 (plus) doesn’t exist, even though they have been affected by being forced by (the) government to lose jobs as much as other people,” Kristen Elizabeth said in a Facebook comment.
Who receives the individual payment was determined by income data from 2019 tax returns, and Christian Wade wonders if the payments really went to the right people, considering how much change some have seen in their job situation this year. The payments are not enough for those who are really struggling and are basically another tax refund for those who aren’t, he said.
“We as a country found that there were gaping holes in our safety net where people abiding by the law were left behind,” Wade said. “(Such as) mandating eLearning, but then not financially supporting parents who are abiding by that mandate is wrong … Many politicians fail to see the issue with it or they simply don’t care.”
Some are still waiting on their check, as is the case for 13 million Americans whose checks were misdirected to the wrong bank accounts, according to an Internal Revenue Service statement. The checks were misdirected to accounts they no longer use that were connected to their old tax returns, the IRS said.
Unemployment benefits
After a pause in extra federal unemployment benefits, the stimulus bill revived the federal boost to state unemployment benefits. Now, unemployed individuals are receiving an additional $300 a week for 11 weeks on top of state government benefits.
This $300 boost is half of what was authorized in the CARES Act, and many argue it is not enough to support those left out of work amid the pandemic.
In November, the month for which the most recent unemployment data is available, the state was down to 5% unemployment, just two points higher than in March, when pandemic-related business closures began. Johnson County’s November unemployment rate was 3.7%, compared to 2.5% right before the pandemic hit.
Though the county’s unemployment numbers are nearly back to pre-pandemic levels, the business climate continues to be uncertain with much of the state in the “red,” according to the state’s color-coded metrics that are based on COVID-19 cases and positivity rates.
At this stage in the pandemic, most of the county’s workplaces are close to being fully staffed again. But the hospitality industry, including restaurants, hotels, tourism and retail are still hurting in many cases, said Christian Maslowski, president and CEO of Aspire Johnson County.
Some local businesses began working remotely again when the county’s case count and positivity rate began to escalate last month. That’s left some business leaders fearing the economy could get worse before it gets better, Maslowski said.
“Earlier this year, I was saying they are down but not out. That’s still the case,” he said. “The vaccine is giving them hope … But a lot of service-based industries know that the darkest days may be ahead.”
The hospitality industry continues to struggle because, with more people working remotely, there are fewer people out and about, or up for lunch with coworkers and friends or a post-work shopping trip, Maslowski said.
Particularly, remote work, coupled with a hesitancy to eat in restaurant dining rooms, are impacting restaurants, he said.
“Restaurants are at huge risk. Restaurants were able to lean on carry-out and outdoor seating. Now that we are in the winter months, they have lost outdoor dining,” Maslowski said. “The psychology is such that consumer habits have changed and they aren’t venturing out.”
Paycheck Protection Program
The best stimulus-related news for businesses is the additional $284 billion that is now available, Maslowski said.
The revamped Paycheck Protection Program, which reopened for applications Friday, allows small businesses to go back for more PPP funds, and gives businesses that never applied one more shot.
The second round of PPP loans is $368 billion smaller than the first, but changes to the program made with the second round are welcomed by local businesses, Maslowski said.
In the first round, businesses could only use PPP funds to pay employees, rent or utilities. Whereas the second round of monies can be used for expenses businesses have incurred to operate during the pandemic, such as personal protective equipment and purchases or renovations needed to create outdoor dining spaces, according to Small Business Administration guidelines.
Local business owners are glad to see the PPP program grow in scope because ongoing PPE expenses and surprise operation changes forced on them by the pandemic weren’t in their budgets, Maslowski said.
Businesses that got first-round payments can apply again if the business has 300 or fewer employees, will use all of its previous loan before the second round is disbursed and can prove a 25% loss in gross receipts for part of 2020 compared to 2019, according to SBA guidelines.
For the hardest-hit businesses, PPP will offer more money than last round, said Rob Henderson, Mutual Savings Bank’s chief lending officer. For “72 code” businesses, including restaurants, bars, hotels, campgrounds and casinos, the business owners can borrow 3.5 times their total payroll, compared to the 2.5 times for all other categories of business, he said.
“This means those hardest hit can pick up an extra month of payroll,” Henderson said.
New types of businesses can also take advantage of the program, including tourism, convention and visitors bureaus and 501(c)6 organizations such as local chambers of commerce, he said.
Henderson expects to see many of the same local businesses come back for more money, and hopes to help as many as possible. Mutual Savings — across the small, Franklin-based chain — gave out $8.6 million in loans, including $6.4 million for businesses in the county, according to bank data.
A few changes to the borrower experience, including a simplified online application, is expected to make the process easier this time around, Henderson said.
In addition to processing the new PPP loans, Mutual Savings and all other local lenders are working through forgiveness applications for the first round. So far, all but three local businesses who submitted forgiveness applications have been approved, which is a positive sign, he said.
“It is absolutely a help,” Maslowski said of the three-fold stimulus package. “It will help retain jobs for our residents while simultaneously providing direct financial assistance to residents. It will help keep businesses open and help some of those same people (who are struggling).”
