Back on April 3, Chatham County had accumulated 19 positive COVID-19 diagnoses, counting toward the total of 2,093 cases in North Carolina and 245,646 in the United States.
Two weeks later, the growth was startling: Chatham had 85 of North Carolina’s 5,859 positive cases, while the U.S.’s total positive cases numbered 672,246. The next day, Chatham cracked the 100-positive count ceiling, and as of presstime Tuesday, the county registered 131 total positive tests.
The spread of the novel coronavirus and the resulting restrictions on businesses and travel and a growing number of unemployment benefit applications, has left government, health and business leaders on all levels facing difficult decisions: When is the right time to loosen restrictions and “re-open” America?
First, is “re-open” even the right term to use? Mike Walden, an economics professor with the N.C. State’s Poole College of Management, says the term is literal for approximately a quarter of businesses across the U.S. What’s not in question, he says, is how COVID-19 and accompanying orders and restrictions has impacted the American economy.
“The economy will lose several trillion dollars in activity over the next several months,” Walden said. “Jobs and incomes have been lost. It will likely take a year or longer for these losses to be recovered once ‘re-opening’ occurs.”
In his fortnightly “You Decide” column on April 10, Walden wrote that America is, at least with “little question among economists,” in “a coronavirus-induced recession,” meaning the economy has “take(n) steps backward rather than steps forward.”
So what does this mean for Chatham’s economy and the financial health of North Carolina and the U.S. while trying to slow down a pandemic that continues to claim lives and make people sick?
Evaluating local impact
Chatham Economic Development Corporation President Alyssa Byrd said the concern for the county’s economy is “pretty high” in her book.
“We do have a lot of service-based businesses, and tourism is a big driver in our economy,” she said. “If we continue further, we’re going to keep losing ground.”
One potentially illuminating measure of spending and the economy in Chatham County is the county’s annual sales tax collections.
While the calculations of sales tax alter over time, the number represents the county’s share of residents and non-residents’ tax payments on retail products and other eligible items. In fiscal year 2007-2008, before that decade’s recession fully took effect, the county’s sales tax receipts were around $12.4 million. The next fiscal year, with the recession under way, that figure dropped to $9.95 million, a 19.8 percent decrease. The 2008-2009 county budget document, established in the spring of 2018, had projected $11.63 million in sales tax receipts, a drop — by comparison — of only 1.1 percent.
The county collected $13.85 million in sales tax receipts in fiscal year 2017-2018, with the estimated number for last year — the actual number will be released in the upcoming budget document for FY 2020-2021 — at $14.32 million. A similar drop would bring the yearly sales tax revenue to $11.48 million, lower than pre-recession receipts. It’s not an exact calculation — Chatham is larger in population, and there are many more retail establishments in the county now than 12 years ago — but it shows the potential financial effects of any kind of recession.
What it actually would look like is anybody’s guess. County Manager Dan LaMontagne told the News + Record earlier this month that the county was already expecting sales tax revenues to fall over the last quarter of fiscal year 2020 — the months of April, May and June. Making an exact prediction now, he said, is difficult.
“This is all unprecedented,” he said. “So having a good idea of when the economy will bounce back from this, and how Chatham County would be different than the rest of the state, is still yet to be seen. I just don’t know. It’s a difficult crystal ball. It comes with really bad directions on how to use it right now.”
And when that comes to the county budget — where taxpayer dollars are used in various departments, including Chatham County Schools and the Chatham County Sheriff’s Office — it could mean no new spending other than what’s already planned, even with two new public schools about to come online and the sheriff’s office asking for more than 20 new staff members.
“Maybe we don’t look at expansion this coming budget because we wouldn’t have the revenue to support it,” LaMontagne said. “So those are decisions we’ve got to make yet. We’re still looking at these revenue projections.”
The schools will open because construction is already under way and funds for those items were already set aside. But other requests — increases to the county’s teacher supplement pay among them — could fall under that expansion, or lack thereof.
A plan to ‘re-open’
After some waffling from President Donald Trump and the federal government on whether or not it was responsible for “re-opening” the country, governors are now on call for making those decisions for their states.
At an April 13 press conference, N.C. Gov. Roy Cooper said the spread of COVID-19 was continuing to “accelerate” through the state, “but at a much slower pace because of people following my executive orders on social distancing.”
“What we are doing is working,” he said. “We are saving lives. Our biggest enemy is complacency. The better we can be at staying home through April, the more likely we are able to ease restrictions.”
But that didn’t appease everyone. The next day, more than 100 protesters as part of ReopenNC — described by the Raleigh News & Observer as “a private Facebook group organized last week that wants people to make their own stay-at-home decisions to avoid exposure to COVID-19 as the worldwide pandemic continues” — rallied in downtown Raleigh, calling Cooper’s executive orders government overreach and seeking an end to the restrictions.
The day after that, Cooper presented an outline for his plan, saying the state needed to “make progress” in testing, tracing and trends before lifting any restrictions. The state would need to, under the plan, see “an increase in testing capabilities to identify, isolate and track new cases,” “boost the public health workforce and ability to trace contacts of new cases” and “understand how COVID-19 is impacting the state and impacting specific populations and regions of the state to determine when to strengthen or ease social distancing policies,” according to a press release.
“This virus is going to be with us until there is a vaccine, which may be a year or more away,” Cooper said. “That means that as we ease restrictions, we are going to enter a new normal. We want to get back to work while at the same time preventing a spike that will overwhelm our hospitals with COVID-19 cases.”
At the same time, Cooper and Dr. Mandy Cohen, the state’s Secretary of the Department of Health and Human Services, stressed the need to avoid complacency.
“Experts tell us it would be dangerous to lift our restrictions all at once,” Cooper said. “Rather than an on/off light switch, we are viewing this as a dimmer switch that can be adjusted incrementally.”
Cohen added, “We now need to look ahead at how we stay ahead of the curve. Widespread testing, aggressive contact tracing, and data-informed policy decisions are our best tools to keep our communities safe and protect our frontline workers.”
Keeping health forefront
Layton Long, Chatham’s public health director, said during an April 14 press briefing that he didn’t want to “minimize” the “bad situation economically” many find themselves in, but it wasn’t time to let up.
“If we take our foot off the gas too soon, as the saying goes, then we run the risk of a significant resurgence,” he said, “and with a resurgence comes not only increased costs that we might have forgone if we pressed on — sometimes the wrong thing is costly and it hurts — but we do find ourselves in a worse situation economically if we see a spike in resurgence of this.”
LaMontagne admitted the situation is “a big wet blanket on the economy right now,” but doesn’t want to give up on the restrictions yet either.
“The biggest fear I have is us letting up too early,” he said. “The mitigation strategies out in the public — everybody still needs to work on stay(ing) at home, staying away from people.”
Byrd said she’s seen some Chatham businesses that are “showing resiliency” and staying open in unique ways during this time, and credited the federal programs like the Payment Protection Program — “whether that met expectations or not, that’s a different question,” she said — for helping that.
“The best thing we can do is communicate to people how important it is to stay at home, work to mitigate risk of re-emergence through the summer, into the fall,” she said. “I think our essential businesses that are continuing to operate, we’ve got to make sure we’ve got best practices down so that risk factors are low.”
Byrd stressed the need for local businesses to “go back to business planning 101” — evaluating the customer base, figure out what media to target, “being very strategic and agile.” With stimulus checks beginning to hit bank accounts this week, she said local and regional economic development and business groups are collaborating on efforts to “get the word out on spending your dollars at local businesses.”
Long said the question of balancing economy and public health is a difficult one, with “no good answer.”
“People die with this infection,” he said. “How much value do you put on that as you make these considerations?”
But moving forward “too quickly,” the health director said, would put Chatham, North Carolina and the United States “in a far worse place moving forward.”
Reporter Zachary Horner can be reached at zhorner@chathamnr.com or on Twitter at @ZachHornerCNR.