ACEDC to seek federal loan amid uncertainty over county’s economic recovery | La Sentinelle: News


The Cumberland County Economic Development Agency plans to apply for its own federal pandemic loan as significantly lower hotel tax revenues threaten the agency’s budget.

Cumberland County Commissioners last week approved a resolution authorizing the Cumberland Area Economic Development Corp. to apply for a Small Business Administration loan under the Paycheck Protection Program, the federal small business bailout that has paid out more than $ 515 billion since April.

CAEDC is the county’s non-profit development agency sponsored by county commissioners through a 3% hotel occupancy tax.

According to COO Shireen Farr, this tax typically brings in around $ 190,000 a month for CAEDC, but since the start of the COVID-19 pandemic, that flow has slowed to almost zero. CAEDC is requesting PPP funding of $ 213,475.

“It gives us a month’s cushion, if you want, if we need it,” Farr told commissioners at the last county finance meeting. “From my point of view, it’s waiting and seeing what happens in the fall. We are waiting to see how quickly the occupancy rate of our hotels can start to rebound.

The PPP request window ends on June 30. Farr said CAEDC waited to make sure funding was still available because it didn’t want to compete with other companies.

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“We didn’t want to compete with the many needy businesses in our community, which we support,” said Farr.

CAEDC is responsible for a number of business development programs in the county, including tourism promotion, workforce development and vocational training, etc.

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As of June 20, $ 515 billion in PPP loans had been approved, out of a total of $ 669 billion in available funding authorized by Congress under the CARES Act, according to SBA data.

A total of 160,452 PPP loans were made in Pennsylvania, with a total value of over $ 20.5 billion.

The program also appears to be popular locally, with CAEDC CEO Jamie Keener saying the agency’s latest survey of county businesses showed about 40% had applied for the loans.

PPP loans are issued through SBA partner banks, but the loans are guaranteed by the federal government and in most cases function more like grants.

Any portion of the loan used on payroll or certain overhead costs, such as rent and utilities, is fully forgivable. The intention is for the federal government to pay to keep employees on companies’ payrolls, even if those employees and companies are unable to actually work due to COVID-19 closures.

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Farr said the CAEDC loan application is entirely for staff costs and should be 100% repayable.

Hotel occupancy rates have seen an increase thanks to the recent Spring Carlisle auto show, Farr said, a sign that things may bounce back in the near term.

But other economic indicators point to a longer path to a full recovery across the board.

Pennsylvanians filed 49,197 initial jobless claims in the week ending June 13, more new claims than those seen in the previous two weeks, according to data from the Federal Labor Department, indicating that losses of Jobs continue at a steady pace even though most of the state has entered the least – restrictive “green phase” of Governor Tom Wolf’s pandemic mitigation plan.

These claim levels are well below the 404,677 new claims filed in Pennsylvania during the last week of March, but well above the initial claim levels before the pandemic, which were just above 12,000 per week for most of the month. early 2020.

Pennsylvanians do not come out of unemployment particularly quickly either. Continuing claims for the week ending June 13 were 913,810, down slightly from a high of over 1.2 million ongoing claims in early May, but still about seven times the sustained unemployment level as Pennsylvania reported before the pandemic.

The Harrisburg-Carlisle metropolitan area, which includes all of Cumberland, Dauphin and Perry counties, recorded an unemployment rate of 13.4% in April, up from 3% a year earlier, according to the Federal Bureau of Labor Statistics .

Pennsylvania’s overall unemployment in April 2020 is 16.1%, according to the BLS, but fell to 13.1% in May.

Part of this reduction in unemployment may be due to PPP loans, as employers reinstate previously laid-off employees using PPP products, and thus exclude them from unemployment.

Email Zack at [email protected].

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