Plan would help small businesses
Gov. Mike DeWine last week proposed, as part of the state’s two-year budget plan, to spend about $1 billion to help Ohio businesses and communities recover from the COVID-19 pandemic.
The one-time allocation is targeted particularly at helping small businesses in the entertainment and hospitality industries.
DeWine does not propose using any funds from the state’s $2.7 billion rainy day fund, but rather says Ohio could fund the plan with savings from Ohio’s previous budget cuts, coupled with federal funding of other programs, including Medicaid. That would cover all but $150 million of the proposed package that will come from direct federal coronavirus relief dollars.
It’s no secret that small businesses have been hit hard by this pandemic.
Consider this: U.S. Bureau of Labor Statistics reports that generally about 20 percent of U.S. small businesses fail within the first year. By the end of their fifth year, roughly 50 percent have faltered. After 10 years, only about one-third of businesses have survived. And these figures are during what many would call “normal” years.
Small business survival rates are expected to be much more grave during this pandemic.
Yelp, the business listing and review site, noted in June that 41 percent of all business closures noted on their site since March — startups and established businesses — were permanent. The National Restaurant Association has reported that COVID-19 has triggered restaurant sales last spring to fall to their lowest level in more than 35 years.
Indeed, small businesses need help, and if our economy is to continue to depend on the large number of small businesses in our Valley and all over Ohio, the governor’s plan makes sense.
But a question of timing exists. Small businesses are suffering now, so will these funds be available in a timely enough manner, before it’s too late for many of them?
We are pleased he believes this fiscal help can come with no tax increase.
Frankly, we long have believed the state’s rainy day fund never should have been allowed to burgeon to this level, because, really, a rainy day fund amounts to Ohioans having been taxed $2.7 billion more than what has been needed to run the government.
Now, if ever there was a rainy day in Ohio, this is it. If the cuts in spending and the federal funds do not provide enough finances to fund grants and small business loans during this pandemic, we urge the governor and state legislators to consider putting the rainy day fund to use in this way. But if not, then this might be the right time to consider refunding some of it to those who paid taxes last year. That’s just one more way to help those suffering financially from this pandemic.
DeWine hopes his ideas get a favorable reception from the Ohio General Assembly. We do, as well. Legislators in Columbus, particularly those in the majority party who have been at odds with DeWine for his handling of the pandemic, must work with DeWine to hammer out a logical recovery budget.
And we hope elected officials in Columbus — both DeWine and those in the state Legislature — focus their attention and energy on developing an expansive strategy to help the state recover.