A State Tries to Chart its Economic Rebound From a Pandemic

A man walks across Main Street Thursday, March 26, 2020, in Park City, Utah. After seeing a surge of coronavirus cases, Summit County issued an order for all residents to not leave their homes unless necessary.

A man walks across Main Street Thursday, March 26, 2020, in Park City, Utah. After seeing a surge of coronavirus cases, Summit County issued an order for all residents to not leave their homes unless necessary. (AP Photo/Rick Bowmer)

 

Connecting state and local government leaders

Utah has drafted a plan meant to serve as a road map for both public health and economic policies during the coronavirus crisis.

Looking beyond the immediate public health crisis the coronavirus is now causing, a pressing issue for many state governments across the U.S. is what they can do to help get their economies up to full speed again when the disease outbreak finally abates.

To this end, Utah last week released a three-stage plan that’s meant to serve as sort of a roadmap for economic recovery over the next six to nine months.

It begins with an eight to 12-week “urgent” phase that is focused heavily on stopping the disease from spreading. The plan then transitions into a new 10- to 14-week “stabilization” stage where the hope is that public health and economic relief measures take hold. Finally, there is an eight to 10-week “recovery” period, where the goal is to have the virus reined in and to see revived job growth.

The state is issuing the blueprint at a time when there is a huge degree of uncertainty over how the public health crisis will play out and how long it will cast a pall over the nation’s economy. In other words, even for the most adept planners, it’s a hard time to plan. 

But Val Hale, director of the Utah Governor’s Office of Economic Development, said Utah has a tradition of being “a little bit proactive” about doing something like crafting an economic recovery blueprint. 

"We wanted to be able to come through this by protecting the citizens’ health and at the same time protecting the economy,” Hale added.

To date, Utah has not seen the explosive case counts that some other states are enduring with Covid-19, the highly contagious respiratory illness that the new coronavirus causes. 

Figures the state issued for Tuesday show 887 cases in Utah, with 73 people hospitalized from Covid-19, and five deaths due to the disease. New York state, in contrast, has upwards of 75,000 cases and over 1,500 deaths. But while Utah so far may have been spared from the worst of the outbreak, it is still disrupting life there, as it is in much of America. 

Gov. Gary Herbert issued a directive on Friday calling on residents to stay home as much as possible, and to avoid non-essential travel. The state earlier in the month ordered restaurants and bars to stop dine-in service. Salt Lake County over the weekend instructed business such as movie theaters, gyms and performance venues to close.

Hale pointed out that with five marquee national parks, Utah is a major destination for outdoor enthusiasts and other travelers. Tourism, he said, generates about $9.5 billion of commerce in the state annually, along with roughly $1.3 billion in state and local tax revenue.

The tourism and hospitality sectors are among those in line to endure major blows as the coronavirus crisis causes people to postpone and call off their travel plans.

"That has just been decimated,” Hale said. “There are hotels out there with 10% occupancy, if even that.”

For Utah’s famous red rock country, with its desert climate, spring is a popular time for visitors.

But health authorities in southeast Utah in mid-March halted dine-in restaurant service and ordered other businesses to close across a three-county area that includes the city of Moab, a gateway to places like Canyonlands National Park and Arches National Park. The public health mandate also placed restrictions on overnight lodging, limiting bookings to certain essential visitors and residents.

“This is prime time for them. This is normally when they're booked solid,” Hale said, referring to the Moab area. “It's money that's not going to be recouped.”

Ski resorts across the state have also closed in response to the virus outbreak. Officials in Summit County, Utah, home to the ski mecca of Park City, issued a stay at home order last week for residents and asked visitors to leave as soon as possible. The county has become one of Utah's hotspots for the virus, with at least 172 cases.

The fallout for the tourism sector is just one example of the economic damage that the state is looking to mitigate and bounce back from with its recovery plan. Herbert appointed Salt Lake Chamber president and CEO Derek Miller to chair a task force that developed the plan. 

As described in a 16-page document, each stage features certain public health and economic “characteristics and practices,” as well as “public and private solutions” the state will pursue. 

Examples of public health characteristics and practices during the stabilization phase, which could begin in May or June, include people continuing to stay home if they fall into groups considered to be more vulnerable to the disease and softer limitations on group gatherings.

The economic section in that phase suggests, among other things, that many people could begin returning to offices. It projects that short-term layoffs and furloughs would continue, but at a slower pace.

As for the possible solutions the plan identifies for this stage: the most distressed industries will receive government aid and safety net programs provide a boost to those residents who need it. At the same time, state rainy day funds and other budget reserves flow to safety net initiatives and to “shovel-ready” infrastructure projects. 

The plan identifies measures for the Covid-19 transmission rate between people and job losses, or growth, as two metrics officials will track during each phase of the plan to see how the state is performing.

Hale said he and his staff would work to connect businesses with the funding and other resources that the federal government is making available under the massive relief packages that congressional lawmakers have approved in recent weeks. The state has a web page that’s designed to be a one-stop shop for businesses looking for help.

The economic development office on Monday announced the launch of a "bridge loan" program that will offer $5,000 to $20,000 loans with 0% interest to Utah-based small businesses with 50 or fewer employees that are struggling due to the Covid-19 pandemic.

"Most of our economy really rides on small businesses," Hale said. "We want to keep as many of those intact and functioning as we can."

“Our philosophy is that the economy in Utah was structurally sound beforehand,” he added. “If we can weather the storm for a few months, we’ll come back out on top again.”

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Bill Lucia is a senior reporter for Route Fifty and is based in Olympia, Washington.

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