Yesterday, in the Revenue Forecast Committee meeting, when asked how many restaurants are closing, the State Economist admitted: “We have to rely on Yelp and other sources.”
In other words, the Mills Administration hasn’t made it a priority to track the number of businesses that have permanently closed during the COVID pandemic.
Governor Janet Mills has not required that a department gather this information and share it with the State Economist, although she has issued many other executive orders during the state of emergency she has declared.
The State of Maine collects a lot of data, and it is collecting a lot of new information related to COVID.
Business closures isn’t something the various agencies specifically track, although, over time, different bits and pieces of information about a closure will get submitted on tax filings or unemployment claims, among other reports.
Businesses don’t have to report to the state that they have closed. In normal times, this may not be an issue. These are not normal times.
Since they asked the question about closures during the meeting yesterday, at least some government officials thought knowing the number of business closures was important—they are trying to determine how much money Governor Mills will have to spend when she proposes her budget in January.
We know businesses are closing. Economists at the University of Chicago’s Booth School of Business have written in a paper published just last week: “Close to one-quarter of firms that shut down in March have never reopened, and a similar fraction of firms that did reopen have since closed again.”
Some businesses file for bankruptcy; we’ll see those in the courts soon. Small businesses simply sell everything and close the doors. We’re already seeing vacancy signs where salons, gift shops, bars, and restaurants used to be.
Sole proprietors or freelancers who have been shut down by the gathering limits, like wedding planners or musicians, might try to get a temporary or permanent job doing something else.
Without having a handle on how many businesses have closed, the Mills Administration is guestimating what is happening in Maine’s economy.
For example, the state’s tax analysts are guessing that restaurant sales will fall this winter by 25 percent due to travel restrictions, gathering limits, curfews, and the cold weather limiting people’s desire to dine outdoors.
Many Maine businesses are entering this winter in survival mode. Maine should be doing everything possible to identify businesses in trouble and help them make it through this winter and the pandemic.
Maine can’t afford to lose any business.