Pritzker locks down more Illinois regions, again hitting struggling bars and restaurants
A “conservative” estimate predicted 20% of Illinois restaurants would not survive COVID-19 closure orders, but predictions ranged as high as 85%. Some are fighting back.
Chicago restaurants and bars will once again be forced to close their indoor spaces on Oct. 30, as Gov. J.B. Pritzker reimposes mitigation efforts on the region.
Meanwhile, bans on indoor service in regions covering all of northern Illinois, except two far northeast counties, and all of southern Illinois have already been put into effect. The decision to reimpose restrictions on restaurants and bars in Regions 1, 4, 5, 7, 8 and 10 threatens to put anywhere from 5,000 to 21,700 food service businesses out of business permanently.
According to the Illinois Restaurant Association’s “conservative” estimate, 20% of food establishments are expected to permanently close because of COVID-19-related economic fallout. If that estimate is correct, that means nearly 5,100 businesses will be gone. They also estimate that 120,000 jobs would be permanently eliminated.
While the 20% estimate is troubling, the closures could be far worse. Surveys show only 30% of businesses in the industry were expecting to be able to survive if the crisis lasted for four months, while only 15% expected to be able to survive if COVID persisted for six months. Business closures of this magnitude would mean that 17,800 to 21,700 Illinois restaurants would remain closed for good.
Kristan Vaughan’s family already gave up one and is trying to sell a second of their seven Irish pubs in the Chicago area. She is also exploring moving out of Illinois, but her inability to sell the restaurants for what is owed is keeping her here.
“I’m very disturbed the restaurant industry is being singled out. The evidence does not show we are the cause of the spread,” she said.
Out of her 160 employees, she said two tested positive for COVID-19 and neither got it at the restaurant or was in a position to spread it. She said she would never put anyone at risk, but restaurants follow sanitation protocols that curb the spread of any illnesses and there is no evidence that they are spreading the virus.
“I was just thinking we could ink our way through to April when it’s warm again, but I guess I let myself start to believe too soon.”
Illinois’ accommodation and food service sector is still down 111,800 jobs since February, before COVID-19 restrictions began. Now, that number can be expected to grow with many layoffs likely becoming permanent.
Lockdowns hurt, as the evidence suggests most small businesses have less than two months of cash on hand while the median small enterprise has more than $10,000 in monthly bills and less than one month of cash on hand.
Illinois’ small businesses create the majority of new Illinois jobs each year. Instead of a blanket ban on indoor dining service throughout much of the state, the Illinois Restaurant Association has urged the Pritzker administration to consider other mitigation efforts such as earlier curfews and reduced occupancy levels. They have also pointed out their industry has received virtually no help from state government and recommended the state provide grants, waive licensing and permitting fees and delay tax payments to provide businesses with relief.
Some have gone to court and won, with FoxFire steakhouse in Geneva, Illinois, allowed to remain open as their case progresses in court.
Vaughan said state lawmakers are shirking their responsibilities to pass laws if they are needed, allowing Pritzker to rule by mandate. She said she’s considered suing, because the government is denying her the use of her business without due process.
“Even if I won, I’d lose,” she said. “With all the permitting and regulations, they could always find something to close you down in retaliation.”
As bad as the mandates are for the Illinois economy, Pritzker is pushing voters to impose $3 billion in additional taxes Nov. 3. His “fair tax” would increase taxes up to 47% on more than 100,000 small businesses just as they are trying to recover from the COVID-19 economic damage, and those small businesses are responsible for the vast majority of new jobs in Illinois.
Economists argue against increasing taxes during a recession. Illinois voters need to consider how much damage they are willing to allow state leaders to do to struggling small businesses.