Restaurant, hotel businesses in free fall due to COVID-19 restrictions

Lynn Minges of the NC Restaurant and Lodging Association (Photo: NCRLA)

Nearly 400,000 jobs have been lost in North Carolina’s restaurant and hotel industries because of the COVID-19 pandemic, industry advocates told state lawmakers Tuesday.

The halting of most travel and closing of dine-in service at restaurants has devastated the state’s approximately 18,000 restaurants and 1,800 hotels, said Lynn Minges, president and CEO of the North Carolina Restaurant and Lodging Association. Businesses are asking for help from state lawmakers as they wait for federal emergency relief funds  and the Golden LEAF Foundation is offering bridge loans

In a presentation to the N.C. House Select Committee on COVID-19’s Economic Support working group, Minges said many restaurants closed entirely after March 17, when dine-in service ended to ensure proper social distancing. Those that remain open are “essentially on life support,” she said.

“Many of those restaurants are limping along, on limited capacity serving only though drive-through, carry out and delivery,” Minges said. “But that is really not a sustainable model for them to be able to maintain for very long.”

The abrupt closure left little time for most restaurants to plan, Minges said. Owners are cash-strapped as their businesses’ incomes have dropped to a fraction of pre-pandemic levels; they are being forced to lay off employees for whom they don’t have enough work, she said. Many are making their existing payroll through credit cards.

Hotels are also beginning to see an enormous impact as business and leisure travel, concerts and conventions and other major drivers of the industry have stopped.

Source: NC Restaurant and Lodging Association


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COVID-19, News

UNC System to reimburse students for unused dining, housing due to pandemic

The UNC System will reimburse students for unused housing and dining services, after universities shut down because of the COVID-19 pandemic.

Interim UNC System President Bill Roper announced the move Monday, when the UNC Board of Governors held a special session via teleconference.

“It is our commitment to all UNC System students and parents to get this done as quickly as possible,” Roper said. “It is also our obligation to get this done right. We hope to be able to announce specifics for processing and issuing refunds in the upcoming weeks.”

The reimbursements will be prorated, according to UNC System officials, refunding students for unused dining and time when campus housing was unavailable.

The UNC System has about 80,000 students living on the campuses of its 17 schools. The university stepped up efforts to get students out of the dorms earlier this month, requiring students who have no other housing or dining options to get approval from the school to stay. The move reduced the overall on-campus population by 90%, making proper social distancing procedures  easier.

COVID-19, News

UNC School of Government on statewide and local “Stay-at-Home” orders

Gov. Roy Cooper’s statewide “stay-at-home” order goes into effect at 5 p.m. Monday and will last 30 days.

But how is the order different from similar orders already put in place by local government around the state?

The UNC School of Government has put together a breakdown of the important questions surrounding the order that is worth your time today.

The piece compares local “stay-at-home” orders with Executive Order 121 and explains the differences between what local governments have ordered and are authorized to order as contrasted with the state.

It also gets into the difference between “stay-at-home” and “shelter-in-place” orders, why they are sometimes used interchangeably and why that can be confusing.


From the explainer:

Which is more restrictive – A local “stay-at-home” declaration or EO121?

It depends.  If a county or city has already imposed (or is still considering imposing) a local “stay-at-home” declaration, its businesses, residents, and others who might be traveling within its jurisdiction are legally subject to both the local declaration and EO121.  Piecing together local restrictions with those of EO121 to determine which is more restrictive may be complicated and confusing.  For example, if a local “stay-at-home” declaration defines an essential business or essential worker more broadly than EO121, the more restrictive definitions in EO121 control.  Conversely, if the local “stay-at-home” declaration defines essential businesses more narrowly, the local declaration will control.  Even if a county or city has not imposed a full set of “stay-at-home” restrictions, other restrictions such as limited entry or curfews (see discussion above), neither of which are imposed under EO121, would still be in effect at the local level.

Is documentation of essential business or essential employee status required?

EO121 does not require documentation for proof of essential business or essential employee status.  However, if a local “stay-at-home” declaration does require documentation for compliance with its local restrictions, those documentation requirements would remain in effect for purposes of enforcing local restrictions.  EO121 directs businesses to contact the NC Department of Revenue (NCDOR) to apply for essential business status; NCDOR does not have the jurisdiction to take applications from businesses seeking essential business status as defined (or not defined) in a local declaration, nor can NCDOR interpret the meaning of these or similar terms in local declarations.  Thus, counties and cities with local “stay-at-home” declarations must continue to provide guidance on terms like essential business and essential employee for purposes of enforcing restrictions imposed under their own local declarations.

In other words, the Governor interprets and provides guidance on compliance with his Executive Orders; counties and cities interpret and provide guidance on compliance with their local declarations.

Should counties and cities keep local restrictions in place?

Whether a county or city should keep in place a local “stay-at-home” declaration (or for that matter, any other local restrictions or prohibitions) is a decision best left to that jurisdiction’s officials based on their judgment of what continues to be reasonably necessary to protect the health and safety of their communities.  Ultimately, such decisions would be acted upon by the county or city official authorized by ordinance to declare a state of emergency and impose restrictions or prohibitions under that declaration.  This author offers no opinion, nor should this blog be construed as doing so, on what those local decisions should be.  The Governor himself recognized in Section 4 of EO121 that “the impact of COVID-19 has been and will likely continue to be different in different parts of North Carolina,” and specifically preserved the authority of county and city officials to impose more restrictive measures than those of EO121 if they determine such measures are reasonably necessary to mitigate against the spread of COVID-19 and to the extent authorized under North Carolina law.

Nonetheless, should county or city officials determine the restrictions imposed under EO121 are sufficient to address the COVID-19 threat within their individual jurisdictions, they have the authority to rescind or modify their local restrictions in the same manner those local restrictions were imposed.  Doing so would in no way effect whether EO121 applies within their jurisdictions.  The Order is effective statewide regardless of any action taken – or not taken – by county and city officials.

Should county and city officials wish to reconsider their local restrictions in light of EO121, they could choose to modify their local declarations in such a way as to keep in place (or add) restrictions not already imposed under EO121 such as limited entry or curfews (see discussion above).  Again, modifying or rescinding local restrictions in no way effects the application of EO121 within that county or city.

How would a county or city modify or rescind its local emergency restrictions?

Local restrictions and prohibitions are modified and rescinded in the same manner they are imposed.  The county or city official authorized by ordinance to declare a state of emergency may take action to modify or rescind any restrictions or prohibitions previously imposed under that declaration (see this blog for more discussion of local declaration authorities).  If the ordinance does not delegate this authority to an individual official, such as the Board Chair or Mayor, such actions must be taken by the governing board itself (G.S. 166A-19.22(a)), which it can do only in a lawfully convened public meeting.  However, if the ordinance does delegate authority to an individual official, that official may act without consent of the governing board.  That official may choose to poll the board, but no action by the board itself is legally required.  Should a county or city governing board wish to amend its local ordinance to delegate this authority to its Board Chair or Mayor (assuming authority is not already delegated), the board may do so only in a lawfully convened public meeting.  There is no authority, even during a declared state of emergency, to amend a local ordinance by any other means.

Does a county or city need to take any action for EO121 to apply and be enforceable within its jurisdiction?

No.  As discussed above, the emergency authorities of the Governor under Chapter 166A are independent of those granted to counties and cities.  EO121 applies in every county and city statewide regardless of any actions (or absence of actions) taken by local officials.  There is no need for counties and cities to amend their local emergency ordinances, declare a local state of emergency, or modify an existing local state of emergency declaration for EO121 to be in effect and enforceable within their local jurisdictions.

Read the full breakdown here.

COVID-19, News

Medical professionals share challenges, urgent needs with lawmakers as COVID-19 cases rise

Medical professionals shared concerns about the lack of protective equipment, the potential for hospitals to be overwhelmed with patients and the need for a statewide stay at home order, at the first meeting of the NC House Select Committee on COVID-19 Healthcare work group Thursday morning.

They also encouraged lawmakers to hold a special session earlier than their scheduled return on April 28. House Speaker Tim Moore (R-Cleveland) has said he is open to that and lawmakers are trying to figure out how to do that safely and within the law.

“This is the first time we’ve conducted meetings like this,” Moore said of Thursday’s committee meeting, which all members attended via teleconference or video conference. “The constitution didn’t envision participating remotely.”

Donald Gintzig, President and CEO of WakeMed

North Carolina needs Gov. Roy Cooper to issue a statewide stay at home order as has already been done in Mecklenburg, Wake, Guilford, Durham and Forsyth counties,  said Donald Gintzig, president and CEO of WakeMed Health and Hospitals.

“We’re at that point, maybe a few days past,” Gintzig said.

As of 11 a.m. Thursday there were 636 confirmed cases of COVID-19 in North Carolina, according to the North Carolina Department of Health and Human Services. There have been 12,910 completed tests. This week the state reported its first two deaths related to the disease.

All of those numbers are on track to increase dramatically.

“We haven’t experienced anything like this in our lifetime,” Gintzig said of the COVID-19 pandemic. “There hasn’t been anything like this since 1918. This isn’t your usual flu situation or even MERS. This one spreads very fast which is why we need extraordinary measures to slow the spread, buy us time.”

The number of infected people is doubling every 2.5 days, Gintzig said — and those are the best numbers we have, given the availability of testing.

“It doesn’t take long to see where we will be in 10, 20, 30 days,” Gintzig said. “If we can get it to double every 4.5 days, if we can get it to double every 6.5 days that gives us the bandwidth to deal with what we face.”

“Shelter in place is very important,” Gintzig said. “One infected person infects four. The value of a shelter in place is slowing that spread. If we can get it from one to four, to one to two, we can start to flatten the curve.”

One of the biggest challenges medical professionals face on the front lines of the pandemic is a lack of personal protective equipment (or PPE) like face masks  gloves, gloves, gowns and shoe covers.  Without them, medical providers are risking their own health and that of their families as they try to test and treat people.

Leah Burns

Dentists and other non-frontline medical professionals who have that equipment have been donating it, said Leah Burns, senior director for Government Relations for the North Carolina Healthcare Association. But the the need is overwhelming, and supplies from the federal government are going first to areas of the country that are experiencing earlier and greater spikes in cases, like New York and Washington state.

“Right now the state has a stockpile and is able to fulfill about 30 percent of PPE requests,” Burns said.

Burns’s report to the committee also detailed how hospitals across the state are restricting visitors and postponing non-emergency surgeries to both preserve needed protective equipment and limit possible exposure to the virus. Unfortunately, Burns told the committee, the loss of payments from those non-emergency surgeries is creating a cash flow problem for hospitals and private practices that are stretched thin by the demands of the pandemic.

“We’re talking about thousands, hundreds of thousands of surgeries being put off across the state,” Burns said.

Shortages of supplies have also kept medical and nursing students from being able to complete their clinical hours at a time when they are badly needed in the workforce, Burns said.

Shortages also include the swabs needed to perform COVID-19 tests, Burns said.

The Atrium, Duke and UNC health systems are performing their own tests, Burns said.

The average wait time for test results through the UNC health system is four to six hours, Burns said. Wait times at the state lab are now at one to two days, she said, while private lab wait times are closer to a week.

Chip Baggett, director of legislative relations for the North Carolina Medical Society, said the legislature needs to act before April 28.

Bagget’s report to the committee detailed the steps being taken in the state and the impact they are projected to have on the number of cases and overwhelming of hospitals.

“I have had more calls in the last two weeks from NCMS members than I’ve ever had in my career,” Baggett said. “They are desperate. They’re saying ‘I can’t get through the normal channels to get to PPE.’ They are furloughing and laying off critical staff.”

“Members are saying, ‘Even if I do have the PPE I need, should I go home to my family? Stay in the garage?'” Baggett said. “What if I’m told I have one mask for five days? Am I jeopardizing the health and safety of my family?'”

Lawmakers assured the medical professionals that they will act swiftly and decisively.

“It is our intention to put together legislation and needs so we’re ready for either a special session of the NCGA or the short session at the end of April,” said Rep. Josh Dobson (R-McDowell), co-chair of the committee.

Co-Chair Rep. Carla Cunningham (D-Forsyth) expressed her gratitude to all the medical providers and essential workers, organizations and individuals who are volunteering to help those struggling during the pandemic.

“I believe in each of you,” Cunningham said. “I believe each of you has something to contribute during this difficult time. I believe we will get through this together because I believe in the resiliency of the people of North Carolina.”

Co-Chair Rep. Donny Lambeth (R-Forsyth) agreed. “In North Carolina we are a resilient group,” Lambeth said. “We routinely deal with tragedies from deadly hurricanes, floods, wildfires, ravaging tornadoes — and we recover. We bond together. We put our boots on and go to work.

“By golly, we’re going to work together and we’re going to get through this,” Lambeth.said. “We need to not panic. We need to reassure our kids that they’re going to be okay and will get to see their classmates and teachers again. We have to reassure our businesses and those who have lost their jobs we are here to listen and help. To our doctors and essential healthcare and protective services we say, ‘Thank you.’ We owe you a huge debt of gratitude. We are here to listen and support you. We are fortunate in North Carolina to have some of the very best medical professionals in the world.”

“We are not giving in to this virus,” Lambeth said. “We will beat you.”

The work group’s next scheduled meeting is next Thursday. Policy Watch will continue to cover these work groups as they meet.

COVID-19, News

House COVID-19 committee economic support work group weighs challenges, responses

The NC House Select Committee on COVID-19’s Economic Support working group held its first meeting Wednesday as the state saw a record number of unemployment applications and lawmakers scrambled to find solutions for people and businesses financially devastated by the pandemic.

More than 166,000 unemployment claims have been since March 16, lawmakers heard in a report from the North Carolina Division of Employment Security — including 26,822 in the last 24 hours.

“We considered 2009 the high water mark and we took 100,000 claims a month in 2009,” said Lockhart Taylor, assistant secretary for Employment Security for the North Carolina Department of Commerce.

House Speaker Tim Moore (R-Cleveland), who chairs the select committee, appeared in person at the Legislative Building Wednesday morning. Most lawmakers attended via teleconference or video conference.

“This is an unprecedented time in our state and it’s an unprecedented time here at the legislature,” Moore told the working group.

The legislature is not scheduled to return to session until April 28. However, Moore said there have been discussions about how to return earlier under current social distancing protocols to begin passing much-needed legislation to deal with the crisis and to ensure North Carolina can take full advantage of federal aid packages now moving closer to passage in Washington.

Legislators need to be involved sooner rather than later though, Moore, said, and so a series of working groups has been formed.

“We have Republican and Democrat chairs of every single one of these committees,” Moore said. “That was intentional on my part because I wanted to be sure that every thing we do is approached in the spirit of bipartisanship and working together. There’s no doubt that people attending these meetings and people around the state have different opinions on different issues. But there are times, situations like this, that remind us that w are all first Americans and North Carolinians. At those times we have to put aside whatever differences we may have and focus on what we need to do to help the people who sent us here.”

Moore gave a rundown of what he said were robust emergency funds and savings that the state can use as much of the economy slows or shuts down due to the pandemic.

“Because we have budgeted wisely, we are in a good financial position,” Moore said. “As I’m speaking to you today we have $3.9 billion in our unemployment insurance trust fund. That gives us in a great position, particularly compared to a lot of other states, to deal with the needs of our citizens. We have $1.1 billion of savings reserve for rainy days and disasters. I certainly think what we’re dealing with today qualifies under both of those.

“We have roughly $2.2 billion in cash on hand or unappropriated funds that can be used. We have $184 million in the Medicaid contingency reserve — no doubt, though, we’re going to see those funds drained in short order I suspect as we see more and more people needing treatment and those rolls growing by virtue of current laws in place. We have $74 million remaining in disaster relief funds. So we are well suited, financially, as a state.”

Some of those numbers depend on projections and could change based on changes in tax revenue — both the amount and when the state receives it. Moore emphasized that the working group will be looking at tax relief in the form of extensions — postponing the state’s tax deadline to July 15 and changing statutes that would eliminate interest accruing on payments due on the original April 15 date. Gov. Roy Cooper can’t change those provisions through executive order.

Shifting tax due dates could shift as much as $2 billion from this fiscal year to the next, lawmakers heard in a report.

The working group will also need examine regulatory reform, Moore said, for example, delaying deadlines on driver’s license renewals to avoid creating lines at Division of Motor Vehicles offices. Those deadlines need to be pushed back up to 90 days or more, Moore said.

The work group discussed several issues, including reports of difficulties with applying for unemployment online, and details of small business loans from the federal government and nonprofits, with the help of the state. Lawmakers also discussed the possibility of delaying state collections actions and tax audits.

The teleconference audio cut out and made some remarks inaudible throughout the meeting, leading several of the lawmakers to ask that answers to their questions be e-mailed because they could not understand important details.

Committee members agreed the legislature needs to meet as soon as possible. Meanwhile, the working groups need to focus on the state’s critical economic needs, as well as possible legislation so that needed bills can be drafted and passed as quickly as possible.

“The sooner we can meet, the better,” said Rep. Michael Wray (D-Northampton), co-chair of the working group. “But nothing happens overnight. To have 166K unemployment claims in one week — people need their money and we thank our state employees on the front line helping to get that done.”

The committee’s working groups on Health Care and Education will meet tomorrow at 10 a.m. and 1 p.m., respectively.

The public can  listen to a live audio stream of both meetings, which can be accessed via the General Assembly website by choosing audio for Room 1228.