How Tampa Bay lost billions of dollars from COVID-19 – Tampa Bay Times
November 2, 2021
The meter started running in March 2020, fueled by the passage of Americas largest economic stimulus package ever: the $2.2 trillion Coronavirus Aid, Relief and Economic Security Act, or CARES Act.
It spun right through December, when Donald Trump signed a booster bill that lacked a catchy name, but poured another $900 billion into the pot.
And it rolled into March with Joe Bidens American Rescue Plan, which pledged $1.9 trillion more in grants, checks and relief.
Approximate price tag on these and other pandemic packages: $5 trillion. About the gross domestic product of Japan.
For 19 months, that money has flowed to workers and businesses, schools and hospitals, cities and counties and states every cent meant, in some way, to alleviate the staggering cost of a pandemic thats killed 730,000 Americans.
Every number tied to COVID-19 jobs lost, businesses shuttered, cases, hospitalizations, deaths is hard to fathom. But the cost of the pandemic is as mind-boggling as any of them.
What did the coronavirus cost Tampa Bay? Can you put a financial price on what we lost?
We decided to try.
Tampa Bay Times reporters surveyed the eight counties of the Tampa Bay region: Hillsborough, Pinellas, Pasco, Hernando, Citrus, Polk, Manatee and Sarasota, home to 5 million people, about 23 percent of Floridas population. We combed through budgets, audits, disclosures and studies. We consulted more than 30 economists, policy advisers, public officials and affected residents. When possible, we tracked spending down to the address and penny.
Its rough math. No formula is capable of calculating economic impact on a scale this severe, largely because the numbers are still changing. But crunching the bigger numbers using that $5 trillion in aid as a guidestar got us in the ballpark.
And what a ballpark it is. Even with all that aid, untold Floridians still suffered. Those hit hardest included people who could least afford it, including minorities and those living paycheck to paycheck. But even those who fared well as relief rolled in, revenue models evolved and the housing and stock markets skyrocketed still felt the sting of a society shut down and that has a cost, too, even if it doesnt show up on a balance sheet. Even the rosiest estimates of this pandemics cost blow the mind.
Has the Tampa Bay area lost $10 billion? Absolutely.
$40 billion? Its entirely possible.
$150 billion? A total far greater than the state of Floridas annual budget?
The closer you break it all down, the higher the cost soars.
In a good year, Andresia Moseley might make $35,000. Shes an actress who performs on stage locally but earns most of her money on the road, about $800 to $1,200 per week
When the pandemic hit, Moseley had a role in Doubt, which was about to premiere at Tampas Jobsite Theatre. That would have paid about a third of Moseleys usual earnings, but she had higher-paying jobs lined up throughout 2020.
By April, Floridas freaking devastated, said Moseley, of Oldsmar. I realize that I dont have a way to earn any money.
She got stuck with a $2,000 car repair bill. She ate more. She became depressed. She contemplated leaving the arts.
Over the first year of the pandemic, between a few months of unemployment, three stimulus checks and eight weeks of actual work, Moseley estimates she brought in $12,000.
I dont know what all its cost me, to be honest, said Moseley, who resumed working this summer. I know the difference between $300 a week and $1,200. We can start there.
Moseleys story is not unique. Signs that local people and businesses got hammered by COVID-19 are all around us.
Restaurants closed. Friends lost jobs. Events got canceled. The Super Bowl wasnt quite as super, even with Tom Brady and the Bucs hosting and winning at home.
Its absolutely fair to say weve lost billions of dollars, said Rick Homans, former president and CEO of the Tampa Bay Partnership, a nonprofit coalition of business leaders. Our economy virtually shut down for months, many parts of it. You could head out on the streets and see it.
And thats on a macro scale. Zoom in, and the impact is more acute.
Take Crystal Foster, 38, who operates a one-woman hairdresser business in Wesley Chapel. Her husband co-owned a Zephyrhills used car lot, and together, the couple had built a sense of financial stability, including a rainy day fund.
When coronavirus cases started skyrocketing, she couldnt see clients. He closed the lot permanently after business dried up overnight.
The company that owns their house struggled, so it listed their rental on the market and raised the rent from $1,545 to $2,150. With everyone home more, their electric bill shot up. Fosters husband got less than $1,000 in unemployment; she got about $140 every two weeks. They got one months worth of financial assistance for rent and utilities from Pasco County, and additional aid for her husband to take classes at a truck-driving school. The family went on food stamps.
You lose a lot of confidence in yourself, because you get to a point like, is enough enough? Foster said.
When people lose income, they spend less. And many, many people lost income. In August 2021, the number of unemployed people in Tampa Bay remained up nearly 29 percent over August 2019.
How does that translate into loss?
A traditional measure of economic health is gross domestic product, or the combined worth of all goods and services produced in an area. About 70 percent of the U.S. GDP is tied to consumer spending.
Lets assume that without the pandemic, Tampa Bays consumer spending in 2020 would have at least equaled that of 2019, when it hit $221.7 billion, according to the U.S. Bureau of Economic Analysis. From just March to August 2020, the region lost out on approximately $7 billion in sales, according to the Florida Department of Revenue.
But that estimate is likely low, based on historical trends.
From 2015 to 2019, consumer spending in the Tampa Bay area grew about 3 percent each year. Applying those growth rates to each Tampa Bay county, its a reasonable estimate that local businesses actually lost around $10.8 billion worth of spending from March to August 2020.
With reduced spending comes reduced taxation.
Local government taxes in each county, such as fuel and tourist taxes, fell by $136.8 million from March 2020 to February 2021, compared to the same period a year earlier. From March through August 2020, sales tax revenue in the area was down $226 million from the same period in 2019. Had consumer spending grown in 2020 like it did in years prior, that gap would be even larger: $341 million.
Tampa Bay had been set up for what looked like a banner 2020. During the pandemics first months, the region lost major events that would have brought thousands of visitors to town, including a full slate of spring training, the PGAs Valspar Championship and WrestleMania. Those events alone might have brought $300 million in out-of-town spending, according to pre-pandemic estimates.
Despite those early losses, the region didnt take long to rebound. Consumer spending in Tampa Bay largely returned to normal in September 2020, and by July of this year had more than made up for the losses during the first wave of infections. Applying historical growth rates, Tampa Bay consumers spent $14 billion more than expected during that span, more than making up for the $10.8 billion lost from March to December 2020.
Sports, as it turns out, also played a role in the regions recovery. While spring training was canceled, the Tampa Bay area gained two temporary sports franchises in Torontos Raptors and Blue Jays, who decamped in Tampa and Dunedin, respectively, due to travel restrictions between the United States and Canada. Pro wrestling returned for residencies at Tropicana Field and the Yuengling Center, then to Raymond James for a two-night WrestleMania this year. Combined, the WWE events recouped at least 65 percent of the expected hotel stays from last years canceled WrestleMania, according to the Tampa Bay Sports Commission.
Still, between that initial, immediate drop in consumer spending and lost state and local tax revenue, Tampa Bay likely saw at least a $10 billion shortfall from what might otherwise have been expected. Homans called that estimate very conservative, given the size of our economy here.
Lets go back to the Super Bowl. Estimates of the Super Bowls economic benefits vary widely, with civic boosters claiming it can hit $500 million, but some economists saying its more like $30 million. Local tourism leaders havent analyzed this years windfall in depth but as it turns out, $30 million is about how much local hotels brought in during Super Bowl week, according to the Tampa Bay Sports Commission. Total spending was certainly higher thanks to food, travel and other expenses, but $30 million is a solid starting point.
Ten billion dollars equals 333 Super Bowls.
Now zoom closer.
Before the pandemic, LaTasha Manns calendar was packed for the year. Mann and her mother run Classy Chics Event Planning & Catering in Brandon.
As the virus spread during 2020, Mann had to cancel events and refund customers. An April wedding: $5,146.35. Another in May: $9,298.52. Two graduation parties in June: $3,302.50 and $2,358.98. A birthday in October: $3,786.65. Another wedding in November: $7,598.60.
It was just God and our credit that allowed us to stay afloat, Mann said.
Mann eventually scored a job that paid well at a Fort Myers golf course, so she relocated. Shes since resumed booking a few local events, including a Tampa wedding in December, but is still behind where she thought shed be at this point in 2021.
In all, Mann estimated the pandemic directly cost her $40,000 worth of business all of it in Hillsborough County.
Ten billion dollars is 250,000 LaTasha Manns. Nearly the population of St. Petersburg.
Tracking every cent of pandemic relief and stimulus money flowing from Washington, D.C., is a Sisyphean task. The government hasnt done it yet, and neither can you. Thats because much of the money has not been allocated, spent or tabulated, and may not be for some time.
The governments official spending tracker, USAspending.gov, pegs appropriations thus far in the eight-county Tampa Bay region at $14.5 billion. Its far from complete. Reporting lags mean some awards arent fully tallied, and some massive expenditures arent listed.
The discrepancy between the tracker and reality is evident when you pull data straight from the awarding agencies. Tampa Bays three top federal pandemic relief sources, for instance, brought $29 billion into the region, which is twice the amount listed at USAspending.gov. They are:
Small business loans: The U.S. Small Business Administrations forgivable Paycheck Protection Program loans shepherded at least $10.1 billion into Tampa Bay businesses. (The Tampa Bay Times and related companies received a loan worth $8.5 million.) Another $3.4 billion came in through Economic Injury Disaster Loans.
Unemployment relief: Floridians have received nearly $24.5 billion in federal pandemic relief. While the state hasnt publicly separated that money by county, its official unemployment dashboard says the region accounts for more than a fifth of the states claims just like it accounts for more than a fifth of Floridas population. That makes a fifth of that federal haul, or $4.9 billion, a reasonable estimate.
Stimulus checks: Floridians have received 33 million economic impact payments worth $54.5 billion. Those payments, designed both as financial relief and to spur spending, arent publicly broken down past the state level, either. But a fifth of that Tampa Bays approximate share would be $10.9 billion.
The government also has doled out billions for Tampa Bays cities and counties ($2.2 billion), school and university systems ($3 billion) and health care providers and facilities ($1.4 billion). Add in federal contracts, transportation grants, housing relief programs, child tax credits and aid for restaurants and entertainment venues, and youre up to $38.7 billion. And that still may be conservative, given all the relief provisions yet to be parceled or tallied myriad tax benefits, mortgage relief programs, infrastructure, capital spending and so on.
The government hasnt tracked or even allocated every cent of pandemic relief and stimulus funding authorized by Congress. But the biggest sources of federal aid will deposit at least $38.7 billion into the Tampa Bay region.
Some of this money might not be spent for years. And because its non-recurring, sectors that are recovering but still have a ways to go like Floridas lifeblood of tourism and hospitality may feel pinched for some time.
Which begs the question: Is $38.7 billion enough to recoup all our losses?
Donna Maine Smith, 58, of Brooksville lost her job as a graphic designer days into the pandemic. She went from making $65,000 a year to $275 per week in state unemployment, cutting costs to keep her budget stable. Shes since applied for hundreds and hundreds of jobs, to no avail.
There hasnt been a day that has gone by since I was laid off and were talking weekends, too where I dont get up in the morning and go to work, either building a website, applying to jobs, working on artwork, whatever that may be, she said.
Federal unemployment aid helped with unexpected expenses like air conditioning and plumbing repairs. So did leaning on her fine arts background to earn income painting pet portraits. But when Gov. Ron DeSantis pulled the state out of a $300-per-week federal supplement this summer, arguing that it would spur more Floridians to get back to work, it was such a kick in the gut, Smith said.
The minute you say youve received unemployment, youre immediately labeled lazy, she said. It is so demoralizing. It is so humiliating. The entire process makes you feel like youre worthless.
John and Walinda Greens Brandon business, Kingdom Transportation Services, caters to corporate clients and tourists. When the economy shut down, so did Kingdom. Because they live with an older relative who has health issues, John, 57, played it safe and didnt resume taking passengers until this May.
The Greens got about $20,000 in loans and grants to cover costs like insurance, which John said gets me across the line for 2021. But thats a fraction of the $100,000-plus he estimates theyve lost throughout the pandemic. Hes gone from driving 20 to 30 clients per week to about two to four, and sometimes, none at all.
I still havent fully recovered, he said. If we just can maintain that (business) and reduce the activities that we do, then well be okay.
Much larger companies also took huge hits not only through losses but unrealized earnings.
Prior to the pandemic, Tampa-based restaurant chain Metro Diner had nearly 4,500 employees at 69 locations. It had revenues of $145 million in 2019, with new openings planned and a projected growth rate of about 20 percent per year. Within a few years, said chairperson Hugh Connerty, the company would have explored going public.
Almost immediately in March 2020, the company laid off 4,000 workers, pivoting to takeout and shrinking its menu to maximize cost efficiency. Eleven locations closed. The company lost more than $1 million a month, much of it getting out of leases for restaurants that had yet to open.
Over the next year, corporations tied to Metro Diners around the country received at least 37 Paycheck Protection Program loans worth $25.5 million. That helped the company survive, Connerty said, but it barely dented the overall picture. Metro Diner basically broke even in 2020, a far cry from the exponential growth it had expected. Last year, the difference between the companys projected and actual revenues was about $63 million. This year, that gap projects to be even wider.
Metro Diner is now a much healthier company, financially, Connerty said, with 2,400 employees and plans to open new restaurants by late next year. Individual diners are back to operating at 2019 margins, thanks largely to reduced expenses.
But when you consider the growth that Metro Diner missed out on and the years it will take the company to get that growth back that $25.5 million in federal aid looks a lot smaller.
In terms of revenue losses, people unemployed and things like that in our industry and the country, Ive never seen anything like it, said Metro Diner partner Chris Sullivan.
So if the aid pumped into Tampa Bay thus far stands at $38.7 billion with some saying that doesnt come close to capturing the full loss it makes you wonder what the real upper limit might be. Especially for those losses that can never be recovered.
Theres a statistic used by the U.S. government that isnt mentioned in any COVID-19 relief bill. Its called value of a statistical life, or VSL.
The idea, popularized by Nobel-winning economist Thomas Schelling, is not to calculate what a human life is literally worth, or how much one person would pay to save a life, including their own. Its a tool to help calculate the relationship between money and risk.
We all the time, as individuals and as a society, make trade-offs between income and health, said Harvard economist David Cutler. We decide whether to buy a slightly safer car, or a slightly less safe car, given that it involves more money. We decide whether to take jobs that are safer, over riskier jobs that pay more money.
Governments and corporations do this, too. A practical example comes from the movie Fight Club. Edward Norton plays a recall coordinator for an auto manufacturer; its his job to determine whether recalling unsafe cars makes financial sense for the company. Heres how his character describes it:
Take the number of vehicles in the field, A. Multiply it by the probable rate of failure, B. Then multiply the result by the average out-of-court settlement, C. A times B times C equals X. If X is less than the cost of a recall, we dont do one.
In other words, the company must determine if paying more to save drivers lives is better or worse (for shareholders, anyway) than doing nothing. And value of a statistical life represented here by C is central to the formula.
This math, slightly tweaked, is at the heart of the debate over COVID-19 and the economy.
Nobody, least of all elected officials, likes admitting theres a trade-off between preventing harm and saving money. But its a calculation governments must make all the time in deciding how much to invest in public goods and services, from law enforcement to disaster mitigation to in the case of legislation now working its way through Congress our nations aging infrastructure. Governments must determine when the amount spent saving a few lives outweighs pain inflicted on everyone else, whether it be economic hardship or the loss of public services.
During the pandemic, governments weighed the health benefits of shutdowns and social distancing against the economic hit of job losses and lost revenue. Some states, like New York and California, prioritized public safety over business, slow-rolling re-openings until cases subsided. Others, like Florida, reopened more quickly to help spur spending, which stabilized the economic crash, even as COVID-19s delta variant led to record case spikes.
So while you can measure COVID-19s damage through lost consumer spending or emergency grants and loans, none of that gets at the human cost.
Some things are denominated in dollars, like GDP loss, Cutler said. And some things are denominated in lives, like how many people died, how many people will be saved. And you need some way to combine those two.
Thats where value of a statistical life comes in.
Agencies use values per statistical life when budgeting public safety investments and policies. Some have standard valuations, including the Environmental Protection Agency ($7.4 million), the Department of Transportation ($11.6 million) and the Department of Health and Human Services (a range of $5.3 million to $17.4 million). These numbers are based on things like auto fatality or cancer rates, and the higher prices consumers have traditionally paid to avoid them hence the word statistical.
In a study last October, Cutler and former U.S. Treasury secretary Lawrence Summers projected the economic impact of COVID-19 in the United States to be $16 trillion. This factored in losses to date and losses to come, such as anticipated drops in economic output over the next decade. More than half of that figure was tied directly to the viruss human cost not just each life lost, but each life disrupted by long-term health problems or mental health issues like depression or anxiety.
Cutler and Summer started with what they called a conservative value of $7 million per life, based on statistical values from the Department of Health and Human Services and other studies. (Similar studies have placed the value anywhere from $2 million to $11 million, noting the virus didnt strike everyone equally the elderly and those with health problems were most vulnerable. Cutler and Summers essentially split the range of estimates down the middle: One coronavirus death, no matter who it was, meant a $7 million blow to society).
For severe but nonfatal cases, the value dropped to $2.45 million. And it came down even further when calculating the pandemics mental health toll, which they pegged at $20,000 per adult sufferer. (These figures are not meant to reflect specific treatment costs but rather the collective value we place on long, healthy, happy lives.)
Applying their formula to Tampa Bay, we get these results:
Add it up, and the pandemics human cost in Tampa Bay equals $161.4 billion.
Thats 5,380 Super Bowls. Its more than four times the amount of pandemic relief money that rolled in from Washington. Its $32,280 for every man, woman and child in Tampa Bay.
What a number like $161.4 billion tells us is not how much cash those healthy lives would have added to the regional economy. Rather, economists say, it can give those who manage the worlds money an idea of the local implications of national spending decisions. That $5 trillion spent by the U.S. government wont bring back everything Tampa Bay and the nation lost. But it could guide decisions about how much to spend down the line, in whatever public health, safety or climate crisis comes next.
How many people have died from this, 700,000? said Casey Mulligan, an economics professor at the University of Chicago. If we were to make our highways a little safer, make our consumer products a little safer, so that we could add 700,000 to our population over the next several years, thats kind of what it would cost. That massive number.
Is $161.4 billion too high? It depends on whom you ask, and how much value you or your government might place on your well-being. Maybe you think $38.7 billion is too high, or even $10 billion.
But consider everything Tampa Bay has lost due to COVID-19 the lives, the livelihoods, the experiences and memories and plans. Consider the things it cost you and those you know. And then ask yourself:
How much would you pay to get it back?
Times staff writers Malena Carollo, Romy Ellenbogen, Emily L. Mahoney, Eli Murray, Jeffrey S. Solochek, Langston Taylor and Natalie Weber contributed to this project.
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How Tampa Bay lost billions of dollars from COVID-19 - Tampa Bay Times
