City council committees convened Aug. 3 for a hearing on rebuilding the city’s economy from the ravages of the coronavirus pandemic, where a consistent theme emerged: The new economy must be more equitable than the old.
The hearing, organized jointly by the council committees on Finance and Commerce & Economic Development, lasted more than three hours and saw testimony from city officials, councilmembers, and experts from the city’s business and economic development worlds.
Sylvie Gallier-Howard, acting director of the city Department of Commerce, testified at the hearing on the department’s plans to aid in the city’s recovery, which she said have so far included providing local businesses with personal protective equipment and practical advice, as well as direct monetary aid totaling around $15 million.
Gallier-Howard said during the hearing that of the funds the Department of Commerce have distributed, 66% have gone to minority-owned businesses and 83% went to businesses with less than $500,000 in revenue, stressing the outsize effect the pandemic has had on small businesses and minority communities.
“We’re only as strong as our weakest link,” she said. “When you have a lot of people that maybe weren’t close to poverty and now they’re slipping into poverty, or people that were in poverty that are in deeper poverty, it’s gonna really take a long time to dig ourselves out of that.”
Since the COVID-19 pandemic began overwhelming the United States in early March, the economic forecast for the city and surrounding area has deteriorated dramatically.
According to data from the Bureau of Labor Statistics, unemployment claims in the three-state area encompassing southeastern Pennsylvania, Delaware, and southern New Jersey rose from around 250,000 in early March to over five million in early July.
She said the PIDC was committed to measures that would “drive an equitable economic recovery” in the city, including a $3 million Restart Philadelphia loan fund to prioritize businesses in neighborhoods with high poverty rates and which are majority minority-owned.
“One of my colleagues I think put it really well when she said, ‘You know, I’ve been thinking a lot about the ways in which we’ve been able to sort of toss out the rule book, so to speak, in light of the COVID-19 pandemic. And so, why haven’t we been able to do that in light of systemic racism?’” Nevins said.
Funding for the initiatives of the Department of Commerce and the PIDC, which the Department of Commerce co-founded, has so far come primarily from the City. According to Gallier-Howard, federal funds have mostly been earmarked for new expenses explicitly related to coronavirus, limiting how the City can utilize the money.
The City is projecting a roughly $740 million budget shortfall for fiscal year 2021, representing a steep decline in tax revenue caused by the shortfall in business revenues for key industries including hospitality, transportation, and retail.
City Councilmember Derek Green, who co-hosted the hearing as the chair of the finance committee and also serves on the board of the National League of Cities, said his office was actively lobbying for more, and more flexible, federal dollars.
“We’re going to need as much as possible,” Green said. “Not only for us to recover lost revenue, but also so we can put more dollars into disadvantaged communities.”
Green stressed the importance of flexible federal Paycheck Protection Program funds which directly reimburse business owners for wage expenses to prevent layoffs, to the survival of smaller businesses in the city, especially those owned by people of color.
“PPP should not just go to your traditional big bank,” Green said. “We should also allow smaller institutions, like community development financial institutions, to have the ability to access those dollars, because they’re very connected to small businesses.”
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