State lawmakers representing districts along the 16 mile-long route of the Purple Line are again pushing for legislation to provide financial relief for small businesses. Many of the businesses are minority- or immigrant-owned and have complained of customers staying away during construction of the light-rail system.
A bill sponsored by Del. Jheanelle Wilkins (D-Silver Spring) to authorize state-funded grants for businesses that can document a loss in revenue resulting from the construction work was heard by the House Ways and Means Committee in Annapolis on Thursday.
Wilkins’ bill is cosponsored by 13 of her colleagues, all but one representing either Montgomery County or Prince George’s County — including many from districts bisected by the Purple Line.
When completed in 2023, the Purple Line will provide service from Bethesda east to New Carrollton in Prince George’s County.
At the outset of a nearly hour-long hearing, Wilkins voiced sentiments later expressed by many of the affected business owners — who, while acknowledging the Purple Line will benefit them in the long run, said the construction is threatening their ability to remain in operation in the near-term.
Several spoke of how Purple Line construction work eliminated parking spaces and caused heavy traffic congestion, driving away customers who previously visited their businesses on a regular basis.
“It’s critical that we take swift action to ensure that small and micro-businesses — which are seeing a severe decrease in their revenue as a result of construction — are able to thrive and survive during and after the construction of the Purple Line,” Wilkins told the committee.
Appearing with Wilkins, Takoma Park City Manager Suzanne Ludlow added: “When our businesses knew the construction was coming, they thought the construction would be in front of their stores for three or four months. That’s not the case — and we were recently told that, in fact, the construction [and] utility work will stay right in front of their businesses for another year.”
“That is the kind of expense you cannot save up for,” contended Ludlow, who said small-business owners in the affected areas of Takoma Park have reported 30 to 40 percent decreases in revenue and have been forced to lay off employees.
In an interview before the hearing, Wilkins said there are about 100 businesses along the Purple Line corridor in Montgomery County, with about 50 to 60 of them falling into the category of small businesses.
“It’s not something where we’re looking to support a bank along the route that might be impacted,” Wilkins said. “It’s really our small, immigrant-owned businesses.”
An amendment to her bill submitted during Thursday would deem businesses with 14 or fewer employees eligible for state assistance, although Wilkins told committee members, “I want to double check with the businesses that are most impacted and make sure that’s a reasonable number.”
A half-dozen small-business owners, most of them immigrants, testified Thursday. Wilkins also showed a video with comments from several other business owners who could not be there.
Among those appearing before the committee was Dora Escobar, a Salvadoran immigrant and Washington-area entrepreneur who said she owns five restaurants and 14 check-cashing establishments — most of them along the Purple Line corridor in Montgomery and Prince George’s counties.
“Before, I used to be secure about my business dealings. But now, out of all my businesses, I have eight locations that are struggling,” said Escobar, who addressed the committee in Spanish, with Prince George’s County Council Member Deni Taveras translating.
Escobar added: “I don’t say this only for myself as a business owner, but I also say it for my workers, who are concerned about their jobs … because they’re not getting enough foot traffic coming through the businesses.”
Responding later to a question from a committee member, Del. Wayne Hartman (R-Eastern Shore), Wilkins said her understanding is that owners with multiple business holdings — such as Escobar — would qualify for relief if each of their individual businesses met the threshold of 14 employees or fewer.
But she said that decision would be up to state officials administering the grant program, for which Wilkins’ legislation would allocate $5 million over a four-year period starting in fiscal year 2021.
“That would be part of the regulations we’ve instructed [the Maryland Department of Commerce] to develop in terms of the process on how businesses would apply … especially how someone who owns multiple businesses would qualify,” Wilkins said.
She said her legislation currently foresees an individual business owner receiving one grant during the four-year period, but added, “I think that is something I’d be open to discussing.”
In addition to the $5 million for the grants themselves, a “fiscal note” analysis prepared by the state’s Department of Legislative Services estimates that another $1.44 million would be required for state agencies to administer the program over its four-year duration.
Prior to the amendments that Wilkins released Thursday, her bill as originally introduced called for affected business owners to receive credits against their state income tax payments and the state portion of their property tax bills. Under that plan, those determined by state officials to have suffered losses in excess of those tax levies would have received refundable payments.
But, in an interview before the hearing, Wilkins said she decided to amend the legislation to provide for state grants after talking with business owners along the Purple Line route. “The tax credit comes at the end of the year, and these businesses are seeing the impact right now,” Wilkins explained. “We definitely want to work as quickly as possible to get the financial support in their hands.”
Prior efforts to pass similar legislation in 2018 and 2019 failed to advance beyond a hearing in the Ways and Means Committee. Companion legislation, sponsored by Sen. Will Smith (D-Silver Spring), is due to be heard Wednesday in the Senate Budget and Taxation Committee, where a similar measure sponsored by Smith also died last year.
Del. Alonzo Washington (D-Prince George’s County), vice chair of the Ways and Means Committee and the lead sponsor of last year’s bill to provide relief to businesses along the Purple Line, alluded to one political stumbling block: the precedent of allowing those affected by construction of public transportation projects to seek state financial relief.
But Washington, in discussion with Wilkins at Thursday’s hearing, cited the large price tag for the Purple Line as justification. Recent projections put construction costs at upwards of $2.4 billion. That is part of a $5.6 billion contract the state has signed with a private consortium to build, operate and maintain the light-rail system over a 30-year period.
“There may be some people who say ‘We haven’t done this for any other transportation project or anything like that,’” Washington said of the prospect for aiding businesses that were harmed. “But this is the largest [transit] project for this state, and the largest investment that we’re making, so it is a very unique situation.”