July 30, 2020

Honorable Governor Gavin Newsom & All California Senators & Assemblymembers
Governor, State of California
State Capitol, 1st Floor
Sacramento, California 95814

Dear Governor Newsom and California Senators & Assemblymembers,

It’s time that each of you start listening to the people that elected you, and put your boots on the ground of reality. Governor, your administration’s lack of state regulatory and financial relief is fast becoming a mortal blow to California’s hundreds of thousands small business full- service restaurants and millions of jobs that support women, minority, and family owned operations. A high percentage of the workforce is women and persons of color, that are being clearly forgotten and at risk of bankruptcy and even homeless. This is No Joke!

Restaurant and Bar Stats>

• 97BN Restaurant Market Revenue
• 3BN Bars and Nightclub Market Revenue
• Over 90,000 businesses combined
• Over 1.9 Million direct jobs which includes servers, bartenders, cooks, dishwashers, bussers
  • Does not include vendors, distributors, growers, janitorial companies, linen companies, manufacturers of industry products, etc., which would put jobs losses at closer to Smillions jobs
  • 7BN tax revenue annually – the largest tax generator in the state of California

As a service industry we have been yo-yoed since early in the pandemic. First, we close, next allowed takeout service, then outdoor seating – and now an ominous sign you plan another shut down. The massive revenue losses to operators with limited financial aid and support along with costly protocols for openings has created incredible stress and anxiety on an entire industry. Leaving clientele terrified and sheepish, at best, to even come out. Yelp a practical window into our industry – estimates 53% of restaurants have close permanently since the start of the pandemic.

Forbes predicts 89% of independently owned restaurants will shutter permanently by the end of 2020. Leaving fast food chains and massive jobs losses, not a good combination as we see obesity and poor health, in particular, in poorer communities a nexus to increased hospitalizations and deaths due to Covid19. If this isn’t a wake-up call to how unhealthy our country is and how poor our medical system is, what is Governor Newsom and All California Senators and Assemblymembers? Your efforts should be on doing ALL that you can to back off of any new costly regulations and laws on the hospitality industry, and getting open the hospitality industry by mandating protocols(.)

Just as provoking: there is scant evidence restaurants and bars are anymore high-risk than big-box, groceries, home depos, pharmacies, tennis courts, and service stations. It’s those mask-less fools on beaches, attending family and fraternal gatherings, and our campgrounds run amuck, that are high risk. If you cannot control them, why punish an entire sinking economy and industry.

Why not let us open with strict adherence to CDC guidelines for operators, staff, and patrons. Most owners/operators have life-savings invested in locations, employees, equipment, mortgagee, leases, and debt service. You doubt we will police our establishments??!!!

Here are three recommendations to mitigate our losses and mounting debt:

1. Relax consumption hours of operation to past 2 A.M., which will allow for gradual dispersing of crowds and less stress on fire, life, safety and our communities as well as offsetting revenue losses due to venues operating at 50% or less capacity for social distancing

2. Authorize local mayors to close (temporally) adjacent parking lots, parking spaces and even streets in dining districts for outdoor seating

3. Impose Tip Wage Credits for restaurants and bars not in collective bargaining agreement

a. $12 Cash Wage with $3 Tip Wage
b. Allow Employer to deduct 3% on credit card tips from worker’s tips
c. Allow Employer to take a tax credit equaling the Employer’s portion of taxes paid on a workers Tips

4. FORGIVE collections of state and local fines, fees, and forfeitures on our businesses. Especially with regards to CDTFA fraud penalties and interest, and mandate negotiation of original findings asap! Stop all CDTFA and Workers Comp audits in progress and lay-off such audits for at least three years! It strikes us as ironic that you prevent landlords from collecting rents while imposing no such restrictions on CDTFA, ABC, Banks and a sundry of other government fee-fed agents

5. STOP allowing malicious and frivolous lawsuits as a way of life in California! Meritless lawsuits have become the norm and continually destroyed small businesses in this state and set the dirty standard for the nation. Allow defendants to collect ALL reasonable attorney’s fees, expert fees and court fees if a plaintiff loses!

Most full-service restaurants presently are operating at one-third normal capacity. Fewer patrons require fewer skilled full and part-time workers, more debt and creditors, and far less tax income to the government.

As Governor, there is NOTHING you can do to compel this President and U.S. Senator to assist. But you can immediately act to put people back to work, create lost tax revenues, and forestall while we heal or even avoid what we believe is inevitable: the collapse of the largest small business sector in the state and the 5th Largest Economy in the world.

We have run out of time for anymore nonsense and lack of action from our leaders and regulatory agencies. It’s time to take immediate action to open our small businesses and get our workers back to work in California.

Sincerely,

Tricia La Belle, President &
Cedd Moses, Vice President

cc: All 120 Senators & Assemblymembers