Tourism advocates push for changes to payroll loans

Cultural groups fear money will be gone before they can apply

Tourism advocates across Connecticut and legislators from the southeastern part of the state on Wednesday pushed for changes to the Paycheck Protection Program to allow more flexibility for arts and cultural organizations shuttered for the indefinite future.

The PPP is a Small Business Administration loan program put in place because of the coronavirus pandemic, in which the SBA will forgive loans if employees are kept on the payroll for eight weeks. Business owners must spend 75% of the loan on payroll.

PPP concerns came up in a virtual roundtable that U.S. Sen. Richard Blumenthal, D-Conn., hosted with the 5-year-old Connecticut Tourism Coalition on Wednesday afternoon.

Wendy Bury, executive director of the Southeastern Connecticut Cultural Coalition, noted that most arts and cultural organizations weren’t able to reopen in phase one and will not be able to reopen in phase two, and “the PPP will be long gone by then, so we need help extending that.”

She said capacity limits will make it not worth it for some places to open in phase two, especially historic buildings where it’s “logistically impossible to meet some of the social distancing requirements,” and ticket refund requests are becoming a bigger burden as some organizations cancel their entire 2020 season.

Blumenthal noted that the Paycheck Protection Program Flexibility Act, the result of a bipartisan compromise in the U.S. Senate, is now in the House. He said it would extend the date to apply for funds, lengthen the time required for repayment and forgiveness, and eliminate the requirement that 75% be spent on payroll, allowing businesses and nonprofits to spend the money on safety measures and capital improvements.

Small businesses need “a clear outline of what the forgiveness terms are going to be, because I’m afraid that people are going to get caught in a small-print trap there, as these parameters keep changing,” said state Sen. Paul Formica, R-East Lyme.

Many are left wondering what to do when the eightweek PPP period is over.

State Rep. Holly Cheeseman, R-East Lyme, who is executive director of the Children’s Museum of Southeastern Connecticut, said she has been able to keep staff on but is now “faced with trying to keep those people on with no income in sight.” She’s been given a possible reopening date of June 20 but questioned if that’s set in stone.

With additional cleaning supplies and measures, Cheeseman is “looking at increased costs just to operate at a really reduced level, 50% capacity, whatever.”

Scott Dolch, executive director of the Connecticut Restaurant Association, said his urgency is to get the U.S. House to pass the bill in the next five or six days. He commented that restaurants are spending money “to keep people safe with plexiglass, masks, cleaning supplies, all things that aren’t on our normal budget.”

Another issue is that the state’s tourism fund is funded by the lodging tax, which isn’t exactly providing much revenue right now. State Sen. Cathy Osten, D-Sprague, said the amount of money going into the tourism fund will be at least cut in half over the next year.

She expressed concern about funding a tourism marketing plan for Connecticut, and also hopes Blumenthal can help get some money for the Mashantucket Pequot and Mohegan tribes.

Some of the conversation Wednesday focused on how to increase consumer confidence.

“We are going to have to turn the tide on this disease before people will feel secure and safe coming back to retail or hotels or other venues, and that’s beginning to happen,” Blumenthal said. He added, “We’re not going to have a vaccine for a year, and in the meantime, we need to get people back into your places, and spending money.”

Bury said one hurdle is that the audience for many cultural organizations is older and may therefore be resistant to leaving their homes.