Think tank lays out blueprint for recovery for industries worst hit by coronavirus

A new study urges Congress and the Legislature to focus efforts to revive the economy on the industries that have most been impacted by the COVID-19 pandemic: restaurants, retail and tourism.

In a report released Wednesday by the Pioneer Institute, the Boston think tank calls on federal and state officials to consider consumption-based refundable tax credits for brick and mortar businesses and on the federal government to study the costs and benefits of suspending employer-side payroll taxes.

“A 2011 Congressional Budget Office study found that reducing employer payroll taxes has a larger effect on GDP (Gross Domestic Product) than reducing either employee payroll taxes or individual income taxes,” said Executive Director Jim Stergios.

The report, “Public Policy Guide for Economic Recovery from COVID-19 in the Retail and Hospitality Sectors,” urges state policymakers to give retailers the right to expand delivery options without state or local permission, and to explore whether an extended state sales tax holiday would stimulate long-term economic growth.

Jon B. Hurst, president of the Retailers Association of Massachusetts, said the latter recommendation in particular could help businesses.

“We need more sales and lower costs of operating,” Hurst said. “One of the disturbing things that COVID has done is get us into the rut of shopping online. A lot of those dollars leave the state.”

The retail sector was struggling before the pandemic hit, the authors note. Now, statewide retail sales are projected to fall by 10.5 percent, or about $2.8 billion.

Massachusetts accommodations and tourism receipts, meanwhile, are projected to fall by nearly 45 percent in 2020, a drop of nearly $11 billion. From February to May of this year alone, state employment in the sector dropped by 70 percent, according to the report.

Greg Sullivan, Pioneer’s research director and one of the study’s authors, suggested following the lead of Maine, which recently adopted a policy that allows out-of-state visitors who provide proof of a negative COVID-19 test to forgo the state’s 14-day quarantine requirement.

As for restaurants, 3,600, or 22.5 percent of all Bay State eateries, are not expected to survive the pandemic, according to the Massachusetts Restaurant Association.

The authors urge the state to shift control over the number and distribution of liquor licenses to the local level; allow restaurants to sell fresh produce, meats and other foods in addition to prepared foods; and investigate the possibility of providing immunity from COVID-related liability to restaurants that demonstrate compliance with testing, PPE and all other public health guidelines.

from Boston Herald https://ift.tt/2DgzLm8