Houston restaurants need your help, and they need it NOW (like literally, today).
Since the Harris County mandate on Monday to close all bars and end dine-in service for restaurants through April 3 in an effort to increase social distancing to help slow the spread of coronavirus, many restaurants are scrambling to transition to take out services. But for many, the sharp decrease in overall customers foreshadows disaster.
Bobby Heugel, James Beard-nominated leading owner in the Houston bar and restaurant scene, breaks down "Restaurant and Bar Survival Math" on his Instagram.
"33 percent of [the pie] is already allocated to wages for our staff for the past two weeks of work. 25 percent of [the pie] is allocated to next month's rent. 25 percent of [the pie] is allocated to the upcoming liquor and sales tax bills due THIS FRIDAY. The remaining 15 percent needs to pay vendors who also have employees and other costs. Whatever is leftover goes to paying off the massive amount of debt it took to open X restaurant."
His point: there isn't an extra cushion to pay employees without sales.
"We rely on weekly financial injections," said Heugel on his Instagram. "To-go sales aren't the answer.” (Though to be clear, every little bit helps and you should absolutely support the industry’s takeout efforts.)
If to-go efforts are just a drop in the bucket, what is the real answer? Heugel lays it out in the below form letter, but essentially one short-term solution is temporary government tax relief.
Heugel acknowledged that some may be skeptical about why restaurant and bar owners are asking for tax relief.
“I don’t know a single restaurant or bar owner who’s trying to do anything else beyond pass it to their employees,” said Heugel. “The sense of urgency is about trying to pay people we work with every day who mean so much to us. This immediate change allows us to keep people on payroll.
“I don’t know anyone who hasn’t furloughed employees—for a lot of us, that’s the only option we have. 100 percent of the tax relief that I receive from the state will go to my employees and nowhere else.”
Justin Turner, owner of Bernie’s Burger Bus, says he's already furloughed 94 out of his 107 employees with no clear answer to when he'll be able to bring them back onboard.
"I grew this company from one school bus to four brick-and-mortar restaurants. We were trying to figure out ways to keep our long-term staff who have been with us from the beginning, but it was super important to make a decision as quickly as I could because the most important thing to me is to pay people for the hours they've worked," said Turner. "This is the hardest thing I've done in 41 years on this planet."
He said sales have dropped 85 percent since last week. Take out and delivery sales only comprise around 10 percent of their normal business.
"Nine years ago, I had an incident that completely shut me down. Everyone thought I wouldn't be able to come back from that. If there's anything I know I can do, I can dig myself out of a hole," said Turner. "But I've been talking to the community, and I'd estimate 70-80 percent of restaurants are not going to be able to bounce back from this. We're all looking for jobs."
What can you do to help? Take two minutes to copy and fill out the letter below, then email it to Governor Abbot at gov.texas.gov/contact (or use this form) and then follow up with a phone call to 1-800-843-5789. Tax payments are due Friday, March 20, so it's crucial to act as soon as possible.
Here's the letter:
March 18, 2020
Governor Greg Abbott,
P.O. Box 12428
Austin, Texas 78711
RE: Waiving of Sales and Liquor Tax Payments & Other Support for Restaurants and Bars
Dear Governor Abbott,
My name is (your first and last name) and I am a (restaurant or bar owner/
bartender/cook/busser/bartender/barista/etc.) who is solely dependent upon Texas’ hospitality industry that has been extremely hard hit by the necessary closures to our business in this unprecedented pandemic.
The sudden onset of the COVID-19 Coronavirus leaves Texas restaurants and bars financially crippled and in dire need of State action to help them survive. As our governor, you are the only person capable of providing the relief that this industry needs. We are desperate for you to waive tax payments due this Friday for February sales and mixed beverage taxes. By giving employers more payroll options and supporting hospitality businesses, we have a greater chance of surviving this crisis together with the possibility of returning to our jobs afterwards, but we need your immediate action now.
Additionally, please consider assisting both hospitality landlords and tenants in negotiating mortgage and rent relief so that restaurants and bars can focus on staff welfare, maintaining employment, and preserving their businesses. Both parties need government action on this issue so that they can maintain mutually beneficial relationships vital to our economy and Texas’ cultural fabric. Working in the hospitality industry is a career choice with a unique skill set we have refined and relied on throughout our lives, we need to be able to return to our jobs so we can continue to use our professional skills to support our families and ourselves.
Restaurants and bars are the backbone of Texan communities. From beloved, family-owned Tex-Mex restaurants to the white table-clothed dining rooms where we celebrate the most important moments in life, our businesses are Texans’ second homes, and our communities will not be the same without them. Small business owners and employees of these businesses will be unable to continue these long-standing traditions of service without your immediate action. Please consider your unique position to save this vital industry by taking action today and know that I support the below requests from the Texas Restaurant Association.
SIGN YOUR NAME
Print Your Name
City, State, Zip Code
TEXAS RESTAURANT ASSOCIATION REQUESTS FOR RELIEF:
Direct Aid to Restaurants and Employees:
- State/Federal grants to small businesses; ensure that such support is not limited to restaurants that have closed but to any that can easily demonstrate significant hardship.
- Tax credits with expedited processing for retaining employees during the COVID-19 crisis.
- Regulatory relief for restaurants regarding unemployment claims.
Taxes and Fees:
- Suspend meals taxes indefinitely or allow restaurants to keep meals tax revenue. If a government maintains a meals tax, money should be used to promote restaurant industry to residents within its taxing jurisdiction once the crisis is over.
- Delay sales tax remittance for restaurants, such as a 90 day extension for remittance.
- Suspend indefinitely business improvement and other hospitality fees/taxes.
- Suspend or defer property, estimated income, and franchise taxes (in effect providing a loan).
- Quickly refund overpayment of estimated taxes.
- Prohibit landlords from evicting restaurants for non-payment of rent during the COVID-19 crisis. Allow restaurants to pay back rent over a series of months after the crisis abates.
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- Prohibit utilities from shutting off services to restaurants during the COVID-19 crisis due to lack of payment.
- Extend the window for restaurants to make payments on COVID-19 related expenditures.
- Suspend any government mandates set to come into effect in the next two months.