Lt. Gov. Daniel J. McKee is proposing using a portion of Rhode Island’s $1.25 billion in federal COVID-19 relief funds to create grant and loan programs for struggling small businesses, but the proposal doesn’t appear to be garnering much support from other state leaders.
McKee’s plan calls for the state to issue grants monthly to businesses with fewer than 50 employees that are still closed or only partially open. The plan also proposes the creation of a state-guaranteed loan program that would allow those businesses to borrow at no interest and with deferred payments.
“We don’t want any small businesses that were healthy before the health crisis not to be healthy after the crisis has been resolved,” McKee said.
The proposal comes as McKee has been critical of Gov. Gina M. Raimondo’s handling of the state’s $1.25 billion allocation from the $2 trillion Coronavirus Aid, Relief, and Economic Security Act.
McKee, who serves as the chairman of Rhode Island’s Small Business Advocacy Council, said most small businesses have enough cash on hand to survive for 27 days, on average, without revenue. “We’ve already gone well past 27 days,” he said. “Not having a plan to use a portion of those dollars to help small businesses stay alive indicates that it’s not a priority.”
Raimondo has acknowledged holding back funds in part because of the uncertainty surrounding a projected $800 million state budget shortfall.
“I’m hoping the federal government is going to do the right thing and send states another stimulus,” she said during a news briefing on May 28. “If I got that, I would spend the $1.25 billion [that’s already been allocated] tomorrow.
‘It would be premature to commit this aid.’
Dominick J. Ruggerio, R.I. Senate president
“Putting political pressure on me, though, I don’t think is helpful,” she added.
So far, McKee’s plan hasn’t gotten support from legislative leaders.
“I am open to all ideas to help businesses get back on their feet,” R.I. Senate President Dominick J. Ruggerio said in a statement. “However, it would be premature to commit this aid until we know what additional federal assistance may be forthcoming.”
The Greater Providence Chamber of Commerce is taking a wait-and-see stance, too.
“We will continue to assess this proposal as the state’s budget planning process and the prospects for further federal relief come into clearer focus in the days ahead,” said Janet Raymond, the Chamber’s senior vice president of economic development and operations.
McKee, a Democrat, said he went public with his proposal because he felt Raimondo, a fellow Democrat, wasn’t being asked about the $1.25 billion federal COVID-19 allocation and how it could be used to help small businesses that have been badly hurt by the pandemic.
The unusual move of a lieutenant governor criticizing the decision-making of a governor in the same political party is an indication of the “frustration” McKee is feeling about the lack of power of his office, according to June Speakman, Roger Williams University political science professor and Democratic state representative for Warren and Bristol.
McKee has complained publicly that he has been left off Raimondo’s team dealing with the coronavirus crisis.
“[Raimondo] has no constitutional or legal obligation to work with the lieutenant governor or to employ his skills in any way,” Speakman said. “She is perfectly free to do what she’s doing.”
Alexa Gagosz is a PBN staff writer. Contact her at Gagosz@PBN.com.
