A bill that would reimburse restaurants for the indoor dining false start in July has been vetoed by New Jersey Gov. Phil Murphy. The reason the bill was vetoed, said Murphy in a statement to the Senate, is because $35 million of CARES Act funding — which helps residents and businesses struggling because of the pandemic — had recently been allocated to resuscitate the foundering restaurant industry.
The New Jersey bill would have allowed $30 million from federal block grants given to the state from the CARES Act to be allocated to the Economic Development Authority (EDA). The EDA would then dole out money to restaurants through loans or grants. The bill was introduced to the Senate to reimburse restaurants for some of the money spent on food and supplies in the days before restaurants were supposed to be able to open for indoor dining in July. NJ restaurant owners were told by Murphy they would be allowed to begin serving customers indoors at 25% capacity on July 2.
In preparation for indoor service, many restaurant owners rushed to buy food, protective gear for employees, plexiglass barriers and cleaning supplies.
On June 29, three days before indoor dining was set to open, Murphy announced it would be postponed indefinitely. He cited overcrowding at outdoor dining areas and patrons not wearing masks as the reasons for the false start.
In late July, Senate President Steve Sweeney, D-Gloucester, and senators Vin Gopal, D-Monmouth, and Anthony Bucco, R-Boonton, sponsored the bill, which would also reimburse bars and catering companies for the money they spent to gear up for indoor dining.
“With respect to the business community, the impacts of the crisis have reached every industry in the world, but the pandemic’s impacts on the food establishments that drive the State’s hospitality industry have been particularly acute,” Murphy said in the statement.
“The bars and restaurants across our beach towns, villages, nature preserves, and urban centers are an indispensable component of the State’s economy, and I commend the bill’s sponsors for their efforts to assist these businesses during this extraordinarily challenging time.”
On Oct. 13, Murphy announced that $100 million in additional CARES Act funding would be dispensed to state businesses and residents affected by COVID-19. Of that money, $70 million will be distributed to restaurants and other small businesses through the EDA’s Small Business Emergency Assistance Grant Program.
More specifically, $35 million will be given to “Food Services and Drinking Places. “Following the recent announcement that an additional $100 million in CARES Act funding will be available to support New Jersey residents and businesses, including $35 million dedicated to food establishments, the goals of this bill have already been achieved,” the statement said.
Bucco, however, has criticized Murphy for vetoing the bill, which was unanimously voted for in both the House and Senate. According to Bucco, Murphy has mismanaged the CARES Act money and should approve the $30 million the bill allots for restaurants to supplement the $35 million that was recently designated for the state’s recovery.
“Based on Governor Murphy’s personal guidance, restaurants invested a significant amount of money, often on personal credit cards, to restock in anticipation of resuming indoor dining on July 2nd,” said Bucco in a statement. “When the governor reversed course at the last moment, those restaurants suffered steep losses that they could ill afford. It’s unbelievable that Governor Murphy would veto targeted relief funds to cover losses that restaurants incurred to comply with his changing executive orders. It’s a slap in the face to an industry that’s struggling to survive.”
Many Garden State legislators share the concerns of the state’s restaurant and foodservice operators. “The Governor’s announcement to allocate $35 million in aid to restaurants struggling to make ends meet will be crucial in providing valuable relief to our restaurant owners and food service workers,” said Senator Dawn Marie Addiego (D-Burlington/Atlantic/Camden). “Our food industry has been among the industries hit the hardest during this pandemic and while the aid cannot completely replace the revenue they have lost, it will hopefully be a source of great assistance.
“As we approach a cooler time of year, we must reconsider the current indoor dining standards that were created a month ago and put in place new procedures that will be instrumental in helping our restaurants survive through the winter,” she said. “The temperature is dropping quickly, leaving our restaurants litte time to plan on how to remain open and serve their customers once they are no longer able to rely upon outdoor dining.”
Senator Addiego noted that NJ restaurants complied with the stringent requirements that have been set in place over the last seven months, but it will be difficult for them financially to survive the winter months without an expansion of indoor dining capacity.