Some – not all – see government assistance as path through pandemic

[quote_box_right]“It’s very important our local restaurants and businesses gain back the business as soon as possible. Hopefully by the end of April, the worst will have passed.” – Chris Scoggin, CPA[/quote_box_right]

Suzie Miller’s travel agency is taking a hit from coronavirus.

“The travel industry is pretty much shut down right now,” she said.

Miller is the owner and lone employee of Suz’s Cruises, which has made cruise and vacation plans for Maricopans for 14 years. She is a 30-year veteran of the travel industry.

Her website asks prospective clients “Where Have Your Dreams Taken You Lately?” but now they are asking one central question: how far out will they be able to travel? It’s all guesswork at this point, with talk of social distancing regulations perhaps lasting until early 2022 in lieu of a vaccine for the virus.

The cruise lines have been shut down for weeks. Celebrity Cruises has suspended operations until May 11, while Royal Caribbean announced Thursday that it was hoping to resume operations for most of its ships on May 12. But Carnival said its ships are docked until at least June 26, with some specific ships canceling sailings through the fall. (All resumption of service dates should be considered tentative.)

Meanwhile, Miller is helping clients research future trips, but revenues will stagnate until travel restrictions are lifted, bookings begin and cruises set sail again.

 

THE LITTLE GUYS

The travel industry is just one of many sunk by coronavirus and the social distancing prescribed to prevent its spread.

And while the federal government prepares a bailout for airlines and cruise ship operators, the little guys like Miller are left to seek financial relief in other ways.

[quote_box_left]“DES is doing everything it can to get Arizonans their benefits.” – Brett Bezio, Arizona Department of Economic Security[/quote_box_left]The CARES Act, signed into law March 27 to buttress the sagging economy, includes a provision for temporary Federal Pandemic Unemployment Compensation (FPUC) of $600 a week for any worker eligible for state or federal unemployment compensation (UC) benefits, for up to 39 weeks. That would be in addition to state unemployment compensation from the state of Arizona, where the average weekly benefit of $235 can be collected for 26 weeks, but that could be extended another 13 weeks under the CARES Act by the U.S. Department of Labor.

By early April, Miller had researched the CARES Act and knew that she was ineligible for federal loans because she has no employees. The legislation said self-employed and freelance workers may be eligible for the FPUC benefit, but she was still waiting for the Labor Department’s determination. In recent weeks, Miller has called the Department of Economic Security (DES) to seek information but was unable to get through.

Since Gov. Doug Ducey increased access to state unemployment benefits on March 20, the number of claims has risen sharply – by nearly 350,000 – as more businesses shut down temporarily. Fewer than 18,000 state residents were receiving benefits prior to the pandemic.

The surge represents an “unprecedented increase” in claims, according to Brett Bezio, deputy press secretary for the DES, that has overwhelmed customer service centers in recent weeks, with many callers getting a busy signal.

The agency has struggled to handle the unprecedented number of calls and has hired more staff in its call centers to meet the demand and get claims processed, Bezio said.

“DES is doing everything it can to get Arizonans their benefits,” he said.

‘PEOPLE HAVE A LOT OF QUESTIONS’

On a recent Monday, the CPAs at Chaston Taxes and Accounting in Maricopa had a Zoom meeting for existing clients and anybody who wanted more information on coronavirus-related aid for businesses and individuals.

More than 40 people joined the virtual session, most of them small-business owners from Maricopa, according to Chris Scoggin, a longtime Arizonan and CPA for 28 years who joined Chaston six months ago.

“Our phones for the past couple of weeks have been ringing off the hook,” Scoggin said. “People have a lot of questions … There’s been a tremendous amount of legislation in the past three weeks. It’s complex and somewhat confusing.”

The Zoom meeting was a way to share information about the CARES Act and other loan programs and tax benefits for businesses hurting from COVID-19 and the process to apply for those benefits, including unemployment benefits and the Payroll Protection Program (PPP) for businesses, according to Scoggin.

The PPP is a business loan that can be used for payroll, mortgage interest, rent or utilities over an eight-week period. At least 75% must go to payroll. As long as the money is spent on just those four items, the loan is forgiven, Scoggin explained. Proceeds spent in other areas will need to be paid back over a four-year period.

“They can use the benefits issued by the federal government to continue to pay employees or rehire them back, to stay viable,” he said.

How soon businesses in Maricopa are able to rebound will depend on a number of factors, including how much support they get from customers both now and when social distancing regulations are relaxed.

“Ultimately, it’s about the consumer and whether they are comfortable going back to the businesses they have frequented, Scoggin said. “It’s very important our local restaurants and businesses gain back the business as soon as possible. Hopefully by the end of April, the worst will have passed.”

Meanwhile, he encouraged residents to support their local businesspeople now, however they can.

‘WE’RE JUST GOING TO HUNKER DOWN’

Will Dunn is the owner of three small businesses in Maricopa: the Cotton Blossom Flower Shop, the Stagestop neighborhood U-haul and the Stagestop Marketplace, all operated at 44301 W. Maricopa-Casa Grande Highway.

The pandemic is affecting them all – but he won’t be asking the federal government any time soon for assistance in riding out the economic downturn.

A small-business owner in Maricopa since the early 2000s, Dunn said his U-haul dealership is considered an essential business. Every truck in and out gets disinfected to keep his customers safe, he said.

His flower shop , which employed eight contract employees before coronavirus, now operates with three contract employees and two of his college-age children, after a number of older employees elected not to work during the slowdown. Orders are taken online and delivery only.

(His daughter was attending university in hard-hit Italy and came home to Maricopa when the pandemic spread, Dunn said.)

“The mall is hurting,” he said, noting a number of businesses renting in the marketplace are shuttered. “We’re cutting back … and tightening up. We’re just going to hunker down.”

Still, he said he believes some will take the government aid whether they need it or not.

“That’s my biggest concern,” he added, “people taking advantage of these programs, when they don’t need it.”

For now, he doesn’t plan to take advantage of any governmental assistance, he said, acknowledging his current financial position is much different than, say, a mother working as a waitress with children at home. He said he understands somebody like that needing help.

But Suzie Miller said “people should be looking into taking advantage” of the financial assistance.

“This too shall end in the near future,” she said. “Meanwhile, it is important to help others who need it.”

The travel agent sees a silver lining in the gathering clouds of coronavirus.

“When this is over,” she said, “people will need to get away.”

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