Restaurants hope new round of federal aid will serve up good things for them amid the pandemic

Proposal to Help Restaurants
Patrons at a local restaurant.
Patrons at a local restaurant. (Source: WVUE)

NEW ORLEANS, La. (WVUE) - As the number of COVID-19 cases continues an upward trajectory the suffering goes on for restaurants, so the industry is counting on the next stimulus package from Congress to provide additional assistance.

Tommy Cvitanovich and his family own Dragos, a popular restaurant with various locations.

“Restaurants are not designed to be 25 or 50 percent occupied. Restaurants are designed to be 75 percent, 100 percent occupied,” said Cvitanovich.

He said they are faring better than many smaller restaurants as occupancy restrictions remain in place amid the pandemic.

“We’re fortunate, we’ve got a relatively big restaurant, so that 50 percent kind of works with us a little bit more than other restaurants but I’m going to tell you this right now that if Drago’s is struggling, other smaller restaurants are really, really struggling; my heart goes out to those people,” said Cvitanovich.

On Capitol Hill, Senate Republicans’ latest pandemic-related aid proposal contains provisions to help restaurants that are struggling.

U.S. Sen. Bill Cassidy, a Republican from Louisiana, discussed some of the help he says the proposal provides for the restaurant industry.

“We need to support those employers; those restaurants, they’re part of the fabric of society,” Cassidy said.

One provision the GOP’s $1 trillion proposed Heals Act provides a 100 percent deduction for business meals until the end of 2020.

“When you read about K-Paul’s [restaurant] permanently shuttering its doors, an iconic New Orleans restaurant shuttering its doors, that tells you that for those sit-down, the higher-end places that this has been a really difficult time,” said Cassidy.

The Louisiana Restaurant Association says while it supports the Heals Act’s expansion of business meal deductibility from 50 percent to 100 percent the legislation’s Employee Retention Tax Credit provides a far greater benefit to restaurants during the pandemic.

The LRA’s CEO Stan Harris said having the proposed expansion of the meal deductibility expire at the end of the year will have little impact on driving business to restaurants.

Meanwhile, he says LRA is supportive of the RESTAURANTS Act, which is bi-partisan legislation that sets up a fund with over $120 billion for restaurant revitalization and recovery.

Cvitanovich says restaurants would welcome any help given the current situation.

“Whatever kind of help we can get is going to be greatly appreciated whether it’s a tax cut, whether it’s payroll tax cuts,” he said.

Cvitanovich says his business received federal Paycheck Protection Program funds.

“All of our money that we received is going toward payroll, a hundred percent is going to payroll. We’re not using any of it for rent or utilities,” Cvitanovich stated.

And he is urging Congress to do more related to forgivable loans.

“What they have to do is find some more money and handle it the same way, let it go toward a certain amount, a certain percentage of your payroll, you know, let it be limited to, you know, small and medium-size businesses whether it’s a hundred employees or less or 200 employees or less, you know the previous PPP was 500 employees or less.” Cvitanovich stated.

Because he says small restaurants are really feeling the pain.

"We're famous for our restaurants, especially our family-run restaurants and they're struggling today, they need help."

The restaurant industry also wants the PPP loans to be tax-deductible, so that small businesses can deduct eligible expenses paid with a forgiven PPP loan and eliminate the tax liability a lot of businesses may face for taking out the loans.

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