U.S. stimulus relief checks expected to help, not stretch far
How long will it last and how far will it go?
That’s the $1,200 government check on the way to help most Arkansans, along with the rest of America, pay the bills as jobs wither away and the coronavirus spreads.
About 50 million checks were scheduled to go out across the nation last Thursday, with the remainder to follow shortly. Payments are not going out state-by-state so it’s difficult to know when you will receive a deposit. It will likely be this month, the Internal Revenue Service says.
The Federal Reserve’s St. Louis branch, which includes Arkansas, projects that the relief checks won’t go far.
“Though relief checks will provide much-needed assistance to financially distressed households, our simple calculation indicates that the money will not last very long, even for low-income households,” the report concluded.
Not very far means just a few weeks.
Payments vary by household size and income. Here are the basics: individuals making below $75,000 a year will receive $1,200, plus an additional $500 for each child. A joint-tax-filing couple with income of less than $150,000 can receive up to $2,400, and also get $500 for each child.
The Fed report predicts that the money will go fast, and will be barely enough to meet basic needs for about a month. And basic needs means just food, housing, health care and transportation. Those expenses average about $2,200 per month nationwide for a family of two.
Throw out transportation because we’re working from home and avoiding other humans, and that eliminates only about $300 per month in expenses, according to national averages.
Tons of studies, surveys and announcements are being issued outlining the economic disruptions that the coronavirus is delivering. We’ll do our best here to keep you aware of the latest every week.
Some important updates from last week:
Numbers on the jobs front are more distressing every week, and economists and economic development officials are projecting it will get worse in the coming weeks.
The state estimates that there are about 150,000 jobless Arkansans, based on filings for unemployment claims. That, however, does not include the self-employed or individual contractors who also may be out of work because of social-distancing recommendations.
By comparison, the high
est annual total of unemployment claims in Arkansas was 340,000 during the 2009 recession, which was driven by problems in the financial system. In that recession, statewide unemployment peaked at 8.5%.
Michael Pakko, an economist with the University of Arkansas at Little Rock, is expecting a recession this year and has updated his joblessness forecast to 9.4% for this year based on the continued increase in unemployment filings.
To encourage social distancing, state officials are asking Arkansans to avoid going to Workforce Services offices. The two best ways to file a claim are online and through the telephone hot line. File online at ezarc.adws.arkansas.gov or call (844) 908-2178.
On Wednesday, Gov. Asa Hutchinson announced that he would add another $1 million to the quick action loan fund he established to provide bridge loans to small businesses. The fund began last month with $4 million from the governor and another $3 million from Attorney General Leslie Rutledge.
So far, the state has approved 138 loans in 47 counties. Borrowers can gain funding with no interest and can defer payments for a year. More information can be found at www.arkansasedc.com/ covid19.
Arkansans are getting a seat at the table as federal officials, national bankers and economic development officials collaborate on getting coronavirus financial aid to local communities.
Southern Bancorp Chief Executive Officer Darrin Williams joined President Donald Trump, Treasury Secretary Steven Mnuchin and Small Business Administration chief Jovita Carranza in a round-table discussion Tuesday about federal aid to help small businesses survive the pandemic.
The panel included 10 other CEOs from the nation’s largest financial institutions and focused on the new Paycheck Protection Program. Williams shared his experience and perception of the program with the president.
“This program is bold, aggressive, and it’s just what is needed in our communities,” Williams said. “My bank and many others like it are working day and night to process applications from our customers, and we’re doing all we can to get small businesses the funding they need quickly.”
The Small Business Administration is working with local banks to hand out $349 billion in loans to small businesses, which can borrow up to $10 million and have the payroll portion of the loan forgiven. Go to sba.gov to learn more.
Looking ahead to this week, the Arkansas Association of Asian Businesses is sponsoring a multilingual webinar from 9:30-11 a.m. Tuesday to help small businesses navigate the loan process.
The webinar includes Clint O’Neal of the Arkansas Economic Development Commission, who can speak to the state bridge loan program, and Edward Haddock, Arkansas director for the Small Business Administration. More information on the webinar is available at bit.ly/2UTTv5F.
APPLICATIONS SOUGHT
Applications are due Thursday for the 10X Growth Accelerator cohort at The Conductor, a Conway entrepreneurial support organization.
The program offers a peer-driven entrepreneurship education curriculum, leadership coaching and support services, and access to capital.
About 20 companies will be selected to participate. The Conductor is offering the cohort in partnership with the Arkansas Economic Development Commission and Metova Inc.
“Over the past two years, we’ve enjoyed working with companies from all over Arkansas, seeing the impact the program has made, and watching our alumni companies grow,” said Jeff Standridge, managing director of The Conductor.
Since the 10X program started in 2018, more than 40 Arkansas-based businesses have graduated from the program.
Growth-oriented firms with average annual revenue of between $100,000 and $10 million can apply and must commit to having at least one C-level executive attend the accelerator meetings.
More information is available at arconductor.org.
SUPPORT FOR WOMEN
Applications are due Monday for women-owned small businesses that need financial support from the Women’s Foundation of Arkansas. The foundation has established a grant initiative to assist women-owned businesses with fewer than 50 employees.
The relief fund is starting with a $50,000 contribution from the women’s foundation and from the Winthrop Rockefeller Foundation.
The women’s foundation plans to raise a total of $100,000 and make grants of $5,000 to support small businesses.
“In the face of this unprecedented disruption to our economy, the WFA is prepared to champion some of our most vulnerable businesses,” said Anna Beth Gorman, executive director of the women’s foundation.
The organization announced that 75% of the funding will be dedicated to businesses owned at least 51% by a woman of color. Go to womens foundation arkansas.org to apply.
BIG MUDDY
Mississippi County has received the 2019 Big Muddy Cup awarded by Site Selection magazine. The NEA Town Courier in Blytheville announced the news last week.
The award is given to the top metropolitan or micropolitan area along the entire Mississippi River for total corporate facility projects per capita. Mississippi County was recognized because of the steel mills that contribute to the economic development and growth of the area.