Grants to help Rockford-area restaurants handle high unemployment costs open for second round of funding

August 15, 2024|By Kevin Haas|In Rock River Current, 815 News, Rockford, Trending, Business, Restaurants

John Groh, president and CEO of the Rockford Area Convention & Visitors Bureau, and state Rep. Maurice West announce funding on Monday, May 6, 2024, for restaurants who saw unemployment insurance costs rise because of the COVID pandemic. (Photo by Kevin Haas/Rock River Current)

By Kevin Haas
Rock River Current
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ROCKFORD — Local restaurants hurt by spikes in unemployment costs because of shutdowns during the pandemic can now apply for a second round of funding intended to help them handle the hit on their bottom line.

The Rockford Area Convention & Visitors Bureau distributed 33 grants totaling $469,500 in May, but there is roughly $1 million left in state grant funding to help restaurants in Winnebago County recover from the added expenses. That will be doled out in two additional rounds of grants.

The deadline to apply for the latest round is 5 p.m. Aug. 30. Go HERE to apply.

“We want to support our independent, locally owned restaurants to the greatest extent possibly because they do help define in a positive way our community and our destination,” said John Groh, president and CEO of the Rockford Area Convention & Visitors Bureau. “If we can help, we want to do that.”

The issue stems back to layoffs local restaurants made in early 2021 in order to comply with business restrictions meant to curb the spread of the coronavirus.

State lawmakers had voided any increase in unemployment rates from March 15, 2020, to Jan. 2, 2021, to protect businesses from paying higher costs because of coronavirus restrictions. But indoor dining was not permitted in northern Illinois until late January that year, and even then capacity was limited to 25% per room.

The result: Local restaurants saw their unemployment insurance rates skyrocket, sometimes by a factor of seven. Several reported their rate going from the minimum to the maximum, costing thousands or tens of thousands of dollars depending on the size of their staff.

Restaurant owners spent months trying to get answers from the state Department of Employment Security before turning to local lawmakers to plead for help. State Rep. Maurice West ultimately secured $1.5 million in state funding to provide relief.

Local restaurant owners have said they’re grateful for the relief, but frustrated that the root cause of the issue went unfixed.

Groh said the rewards for this latest round of grants will be announced by Sept. 30.

In the first round, grants ranged from $298 to $80,010. The majority of the recipients, 25 of the 33 restaurants, received grants under $10,000.

The maximum award per the state’s rules is $100,000 for all three rounds.

“At this point nobody has maxed out, but I imagine that some might,” Groh said. “There are a couple that were at the upper end of the range last time around that should they apply they’ll get close to maxing out.”

Unemployment insurance rates are determined by a formula that accounts for total wages and unemployment claims, among other factors. In its simplest terms, businesses with more layoffs pay a higher rate. Those high rates remain inflated for three years before declining back to where they started.