Sales tax data: Restaurants, bars battered by COVID-19 rules

Lindsey O'Laughlin
York Dispatch

Sales tax revenue collected from bars and restaurants in Pennsylvania plummeted by $107.8 million in April, May and June compared with the same three months in 2019, said officials with the state Department of Revenue on Tuesday.

The difference amounts to a nearly 44% drop year-over-year in the second quarter, from about $247 million collected in 2019 to about $139 million collected in 2020.

The plunge in sales tax revenue provides the first concrete glimpse into the financial battering that Pennsylvania bars and restaurants took following mandatory closures and limits on occupancy.

Gov. Tom Wolf's mitigation efforts — which included widespread lockdowns beginning in March — had drastic effects on the economy as a whole, state reports show, with overall sales tax figures dropping to $974.2 million in June, a 5.8% dip compared with estimated projections of $1.03 billion.

The data's release came the same day the Pennsylvania House Majority Policy Committee heard testimony from bar, restaurant and social club owners across the state.

Jim DeLisio, owner of the Racehorse Tavern near Thomasville, was one of the panelists at the hearing.

"We're spending thousands of dollars on food that people aren't even eating," he said.

DeLisio, who's also the president of the York County chapter of the Pennsylvania Licensed Beverage and Tavern Association, was referring to Wolf's recent mandate that alcohol may only be served if customers order a meal with their drinks.

Wolf has said the purpose of the rule is to prevent people from going to bars and congregating in close quarters.

Robert Curry fries potatoes at Railside Family Diner in Hanover Thursday, July 23, 2020. He started the restaurant 35 years ago and has run it with his wife Jill for 27 years. Robert said he and his wife are working every day, taking a limited paycheck, to get by during the pandemic restrictions. Bill Kalina photo

He announced the new order July 15 in response to a spike in COVID-19 cases. 

Days later, Wolf demanded that Congress provide additional relief to ailing bars and restaurants. 

"Not only are we (having) spoilage in the food that we can't sell," DeLisio told the House committee, "we have food that's prepared that we can't even give to anybody because people are just ordering it to satisfy a mandate so they can come in and have a beer after work."

In addition to the restrictions on alcohol service, the governor's most recent order prohibited all bar service inside restaurants, limited indoor gatherings to a maximum of 25 people and reduced the indoor dining capacity from 50% of the maximum occupancy to 25%, including staff.

Robert Curry opened the Hanover Railside Family Diner 35 years ago, and he said it's his loyal customer base that's allowed him to stay open through the pandemic.

But it hasn't been easy to make ends meet, he said.

Curry had to lay off about 20 employees, and he and his wife, Jill, both in their 60s, have been working every day and taking only enough earnings to pay their mortgage and utilities, he said.

Server Kristi Carter checks on diners at The Sherwood Inn in New Salem Wednesday, July 29, 2020. The Pennsylvania Department of Revenue reported that bars and restaurants in the state plummeted nearly 44% in April, May and June compared to the same three months in 2019.  Bill Kalina photo

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"I do understand that it’s a big place where people gather," Curry said, "but the restaurant industry on the whole is more of a clean operation on a normal basis, you know, with the (state) Department of Agriculture rules."

Curry's point about restaurants already having stringent health regulations was a common refrain among panelists at the House GOP committee hearing Tuesday.

John Longstreet, president and CEO of the Pennsylvania Restaurant & Lodging Association, told the committee that next to hospitals, restaurants might be the most highly trained and regulated industry with regard to safety.

Longstreet said most restaurants have complied with the governor's orders and that many have invested in extra safety measures for their staff and customers.

At the Railside diner, all orders are prepared as take-out, but Curry set up a few tables inside and out on the patio for customers who still want to eat on-site.

Even when restaurants were allowed to open at 50% indoor dining capacity, Curry said he didn't bring back table service because he knew he couldn't turn a profit at that rate.

Sean Arnold, chef and co-owner of The Left Bank Restaurant and Bar in York City, said Wednesday he thinks customer demand for sit-down dining would be diminished regardless of Wolf's mitigation orders, because of concern over the virus.

“They (customers) just don’t feel comfortable being in an enclosed environment for so long with so many people,” Arnold said.

About a week after Wolf's latest crackdown announcement, the White Rose Restaurant Group announced they would cease most of their operations in an effort to preserve enough capital to eventually be able to reopen.

The family-owned operating group oversees the White Rose Bar & Grill, Rockfish Public House and Valencia Ballroom in York City and the White Rose at Bridgewater in York Township.

The Sherwood Inn owner Shawn Miller holds a COVID-commemorative T-shirt the New Salem tavern was selling Wednesday, July 29, 2020. The Pennsylvania Department of Revenue reported that bars and restaurants in the state plummeted nearly 44% in April, May and June compared to the same three months in 2019. Bill Kalina photo

Contact tracing: At Tuesday's hearing, one panelist told the committee about his experience dealing with the state after a staff member tested positive for COVID-19 about six weeks ago.

Arnold Ivey is the executive chef at IronRock Taphouse in Westmoreland County.

He told the House committee there were no clear guidelines from the state Department of Health or the Department of Agriculture about how the restaurant was supposed to proceed after learning about the infected staff member.

Owner Greg Cammarata said there were about 75 employees at that point in the pandemic, down from the usual 100.

When the contract tracers began getting in touch with other staff members, Ivey said, all employees received letters from the state Department of Health stating that if they didn't self-quarantine for 14 days, they could be arrested and detained at a hospital or other location at the Health Department's discretion.

Along with his testimony, Ivey submitted a copy of the letter, which he said frightened some of the employees.

This is the last page of a letter sent to the employees of IronRock Taphouse in Westmoreland County after a staff member tested positive for COVID-19, said owner Greg Cammerata, who added that the rest of his employees were afraid to return to work.

Bar and restaurant owners weren't the only panelists to address the committee Tuesday.

Representatives from the Pennsylvania Federation of Fraternal and Social Organizations and from the Mechanicsburg Club and the American Legion in Cumberland County explained that social clubs had been hit just as hard as bars and restaurants, but they hadn't been included in any of the relief bills.

Health Secretary Dr. Rachel Levine did not attend the hearing, but she did submit written testimony.