Texas Restaurant Association Pushes Lawmakers to Replenish Revitalization Fund

Texas Restaurant Association is pushing Washington lawmakers to replenish the Restaurant Revitalization Fund

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The pandemic is far from over for the restaurant industry.

That's what the Texas Restaurant Association is warning, as more issues threaten businesses still trying to make up lost revenue from COVID-19.

Nearly two years into the COVID-19, restaurants are again at a tipping point because of inflation, supply shortages, supply disruptions, and staff issues.

“The data tells us that almost every restaurant in Texas is also struggling to survive in the toughest market they’ve ever seen your labor shortages, supply chain disruptions and of course increasing food costs,” said Emily Williams Knight, president and CEO of the Texas Restaurant Association. “I’ve heard restaurant operators refer to COVID-19 as a roller coaster that we can’t get off."

The National Restaurant Revitalization Fund was created to help restaurants after the pandemic shutdowns. That fund is now empty and some 12,000 Texas restaurants received no help and are hurting. Now there is a push to get more money where it's needed.

The omicron variant was another huge blow at the worst time.

“The omicron variant hit Texas during the most important season for restaurants – the holiday season,” said Williams Knight. “Things were looking up last fall but as we stand here today, I’m extremely worried."

In a press conference Wednesday, the TRA shared some data from their latest survey of restaurants in their membership across the state:

  • Even before the omicron variant, 78% of restaurants reported that they did not have enough employees to support existing customer demand.
  • 83% said their total labor costs as a percentage of sales were higher than they were prior to COVID-19
  • 93% said their total food cost as a percentage of sales were higher than they were prior to the COVID-19 outbreak
  • 96% of operators reported that they had experienced supply chain delays and shortages of key products and beverages over the last 90 days
  • Products are double or triple what restaurants are used to paying for key items like beef, poultry, flour and packaging supplies
  • 81% of Texas operators have reported a decline in customer demand for indoor on premise dining this month due to the increase in COVID-19 cases

“Unfortunately, looking at the data today for the first few weeks of January, things have not improved and they’ve actually gotten worse for restaurants here in Texas,” said Williams Knight. “I hear regularly from operators across our state who are trying to grow their to-go business, only to find that they can’t get straws, lids or even to-go containers. This is what it’s like for restaurants operating in the COVID-19 era.“

Businesses say the list of things they have to pivot to never seems to end.

"The pandemic has brought us all to our knees. If I hear someone say pivot one more time, I'm going to spit nails on somebody,” said Tracy Vaught, owner of H Town Restaurant Group, in Wednesday’s press conference. “I think it’s important for everybody to understand that many restaurants, most restaurants are barely hanging in there."

Vaught runs several restaurants in the Houston area that have been open long before the pandemic. However, her team took on the challenge of opening a new, fine dining restaurant during the pandemic.

"The lease was signed prior to the pandemic so we didn't know what was ahead of us," she said.

Vaught said this new restaurant relies on office workers in the downtown Houston area for business lunches and the lunch rush. But with many people still working from home, it's getting hit hard.

"Nobody's in their offices. In Houston right now, there's a 30% vacancy in leased offices. And of the 70% that are leased, only about 30% of the people are going to work," Vaught said. "So for fine dining lunches, you need office workers."

Push for Funding

According to the TRA, new data shows thousands of small restaurants and over 100,000 Texas jobs are at stake if Congress does not soon replenish the Restaurant Revitalization Fund, known as the RRF.

The fund was a grant program created by Congress to help small restaurants. The TRA said it worked well for those who got the money but believes the RRF was severely underfunded.

So much so, that 12,000 Texas eligible businesses applied for the funding but never got the money.

"I do hope that they'll replenish some of that and more restaurants really do need this," said Jon Bonnell, executive chef of Bonnell’s Restaurant Group in Fort Worth.

He said only one of his four restaurants was helped by the federal Restaurant Revitalization Fund.

"We had to shut down one of our restaurants an entire week just because we had too many staff that was testing positive and we couldn't staff the restaurant properly,” Bonnell said. “So, we aren't the only ones, there are restaurants all around having trouble."

That’s why right now, the TRA is in talks with federal lawmakers about a hefty request – $50 billion replenished into the RRF nationally.

“Federal funding expires February 18. So we know that Congress is going to have to work in some kind of bipartisan fashion to address spending. That gives us an opportunity to potentially tag this on and finally replenish the Restaurant Revitalization Fund,” said Kelsey Erickson Steufert, chief public affairs officer for the TRA.

It’s money they say is there from unspent initial COVID-19 relief funding and other sources.

“We know that there’s money there, whether they reallocate funds that haven’t been spent from initial COVID-19 relief,” said Williams Knight. “And if we do the math and scored appropriately, we’ve spent more than $5 trillion, maybe $7 trillion as a nation. So to us, to be quibbling over $50 billion – which is what’s needed right now – seems quite foolish in the long game of trying to save the industry.”

For the additional funding to move forward, it will need to start with the Senate. It will need the support of at least 10 senate Republicans.

“Even frankly conservative Republicans who are leery of spending more, they understand that you can’t create a program that helps a third of people who were all in the same boat. That’s just patently unfair on its face,” said Erickson Steufert.

The TRA said Senator John Cornyn and others have expressed support.

“Obviously, these things are always in relation to other types of spending. We know that February looks to be the month that they will get a spending package together. Similarly, we’re working on the house side and have picked up a lot of support on the house side,” said Williams Knight. "The total deficit right now is about $2.8 billion here in Texas and about $43 billion nationally. It's definitely not a small sum of money, but here in Texas that $2.8 billion would save a lot of restaurants."

The TRA said if the funding did not go through, another option would be organized fundraisers benefitting Texas restaurants, which they've been able to do with some success in the past.

There is an online push to get the RRF replenished. To learn more, click here.

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