Investigations

Last month, protesters stood outside the window of the room where Gov. Andy Beshear gives his daily press briefing. As Beshear calmly read out the number of Kentuckians newly infected with coronavirus, and those who had succumbed to the disease, the protesters chanted about getting back to work. 

Eventually, unable to ignore their loud chants to reopen the economy, Beshear weighed in. 

“Folks,” he said, “that would kill people. It would absolutely kill people. We know we’re not at that point.”

Two days later, Beshear announced the benchmarks the state would have to meet before allowing businesses, restaurants and stores to reopen — including 14 days of declining cases.

The state still has not met that benchmark, but the phased reopening is well underway.

Beshear has since changed the way he talks about those benchmarks, including saying the number of available hospital beds is a good metric or that he’d be satisfied with a 14-day decline in the percent of positive tests

After seven days of steady decline, that number increased on Saturday. 

Beshear has attributed recent spikes in case numbers to outbreaks at a state and a federal prison and nursing homes, and to increased testing. But some areas of the state are still in the midst of an outbreak in the wider community, including Warren County, home to the state’s third-largest city. 

Manufacturing, car dealerships, offices and pet groomers are open, with some restrictions. Today, retail and funeral services will resume at 33% capacity. By Friday, restaurants will reopen under the same restrictions.

Social gatherings of 10 people or fewer are also allowed as of Friday, a date Beshear said he moved up by a few days because he knows people want to socialize over Memorial Day weekend. 

“I trust that we can do this right, that we can do this safely,” he said. “And I’d much rather get out there with some good guidance and rules, if a number of people are going to do this anyways.”

Ryan Van Velzer | wfpl.org

For many workers, reopening is a cause for concern. 

“I feel like we’re caving,” said Sarah Williams, who lives in Lexington and works at a local gym. “It’s just not making sense in my head.”

Williams, 43, tunes in almost daily to hear Beshear’s updates about the COVID-19 pandemic, and for the most part, she has liked what she’s heard. He’s been pretty open, consistent and seemed to really care about people, she said. She even changed her Facebook banner image to show her support for Beshear’s “Team Kentucky.”

But now, as she listens to Beshear talk about reopening the state’s businesses, she’s worried. 

Two of her three children are immunocompromised, putting them at higher risk of infection, and she dreads the thought of reporting to work in a few weeks to a crowded, sweaty building as the number of coronavirus infections continues to rise. 

To her, the state’s reopening feels like an about-face.

“I can’t get my head around it,” Williams said.

Beshear’s office declined to make him or Department for Public Health Commissioner Dr. Steven Stack available for an interview. 

The Kentucky Center for Investigative Reporting spoke to business leaders and elected officials who helped shape Beshear’s reopening policies, and economic and public health experts about how they’re likely to play out. And we interviewed workers and business owners from across the state that are most affected by these plans. 

Regardless of what ultimately influenced Beshear to begin a phased reopening, the decision took place amid a confluence of economic worry, social distancing exhaustion and political pressure.

Business advocates and local government officials who support the reopening say it’s time to stop the economic free fall and put people back to work. 

But public health officials, and some workers worry the decision may have come too soon — and the worry may be warranted. The virus is still spreading and a vaccine is nowhere in sight. Health officials warn that cases will spike again if reopenings come too quick.

“The restrictions to keep Kentucky on the low side of people with the disease are now going to be going away,” said Christopher Johnson, a public health researcher at the University of Louisville. “Most experts would agree that a second surge is probable, inevitable, more than likely to occur.”

Shutdown Saved Lives, Hurt Economy

Kentucky issued its “healthy at home” order on March 25, and most non-essential businesses have been closed to in-person traffic since then. Restaurants closed even earlier, on March 16.

The data shows that these measures saved lives. 

A study from the right-leaning University of Kentucky’s Institute for the Study of Free Enterprise found that, without instituting these measures, the U.S. would have had 35 times as many cases of coronavirus by April 27. Government-issued stay-at-home orders alone decreased the spread 10 times over. 

In Louisville specifically, researchers with the University of Louisville and the city public health department looked at the impact of social distancing rules on mobility and case numbers. The study found that the rules the city put into place in early March prevented a surge in cases that could have overwhelmed the healthcare system. 

The study also cautioned that reopening too soon, and without a robust testing and contact tracing infrastructure already in place, will inevitably lead to a second spike in cases. 

Louisville public health director Dr. Sarah Moyer was one of the authors of the study, and Mayor Greg Fischer reviewed the findings. His office did not respond to a request for comment about how this study influenced the city’s reopening plans. 

But for as much good as these measures did, they also hurt.

With the stroke of a governor’s pen, Moonlite Bar-B-Q Inn was forced to close its dining room on March 16, along with the rest of the restaurants in the state. That announcement came as a shock to owner Patrick Bosley, and right out of the gate, the restaurant took a huge financial hit. 

Moonlite Bar-B-Q Inn has been an Owensboro tradition for 57 years, and Bosley likes to think they’ll be there for another 57, too. They’ve stayed open through floods and ice storms and worse, and the sudden shutdown hit them hard.

“We purchase food for several days or a week,” he said. “You had a lot of restaurants that had tens of thousands of dollars worth of food in their facility, and there’s nothing you could do with it.”

For the next three weeks, the restaurant was hemorrhaging money, Bosley said. He furloughed 70 employees, and has only recently started breaking even on his carryout business. 

This was the story at restaurants, stores, gyms, salons and businesses all over the state, all of which were shut down suddenly in an effort to stem the spread of the virus. 

This pain is almost certainly influencing the rush to reopen as public officials balance public health with the health of the economy. 

Between mid-March and May 14, 743,000 Kentucky workers filed unemployment insurance claims — 33.6% of the workforce. No other state saw a larger share of the workforce claim unemployment.

The Unemployment Insurance Trust Fund started the year with a balance of $618 million and was down to $426 million by April 16, according to the most recent Treasury reports. It’s already one of the worst funded in the country, and still struggling to make up ground lost after the previous recession.

Jared Bennett | wfpl.org

With so many Kentuckians out of work, sales and income tax revenue took a significant hit.  Together, the taxes make up about two-thirds of Kentucky’s revenue. 

Kentucky’s budget office last month began warning state agencies of an impending “severe economic downturn resulting in a revenue shortfall.” 

In an April 29 letter, the budget office asked cabinet and agency leaders to plan for a restriction on hiring and an immediate stop on non-coronavirus discretionary spending. They were told to make expense cuts that, if extended for an entire fiscal year, would amount to 12.5% of the budget. 

The governor has said at his daily briefings that concerns about the state budget were not pushing him to reopen. “We just believe that we are at the point in time where we have got to reopen, but in a slow and gradual way,” Beshear said on May 5. 

But it’s clear that stopping the economic free fall has been on the mind of local government officials, many of whom say they have shared those thoughts with the governor’s office. 

The Kentucky League of Cities surveyed Kentucky cities about the pandemic’s impact on their budgets and found that cities in its membership estimate a total shortfall of up to $85 million for fiscal year 2020. Michele Hill, a governmental affairs communications specialist at the Kentucky League of Cities said the organization has been in contact with the governor about the financial crisis facing Kentucky’s cities: the cities of Ashland, Berea, Bowling Green and Georgetown have each reported budget shortfalls of more than $2 million this fiscal year. 

The impact has been felt by individuals, too. Somerset Mayor Alan Keck said though Pulaski County has had only two deaths and 50 cases, he’s constantly fielding calls from residents with another set of concerns — losing their business, missing a bill payment, still waiting on unemployment checks. 

“I have a sworn duty, just like any other executive, to protect the folks who live and work in my community,” he said. “Part of that protection is advocating for their economic well-being, not just their health and safety.” 

That’s why Keck has informally rallied a group of mayors to push the state forward on reopening.

“I refuse to make this about lives versus livelihoods,” he said. “There’s a path forward for us to do both. And, you know, I hope we’re finally seeing someone’s end of the tunnel there.”

Reopening ‘Has To Be A Positive Thing’

Keck said he met with business owners to develop proposals to send to the governor about how to safely allow child care facilities to open May 11 and restaurants to open May 20 at 50% occupancy. 

Keck never heard back, but felt that the governor’s restaurant reopening plan reflected some of his advocacy. He’s disappointed that child care remains closed, and said that creates a serious problem for many of the people being sent back to work in his community. 

A prominent restaurant industry lobbyist said her group also submitted reopening plans, but didn’t get everything they wanted.

Stacy Roof, the president and chief executive officer of the Kentucky Restaurant Association, said her reopening proposal closely mirrored the plan released by the governor’s office — encouraging restaurants to use technology to help limit face-to-face interactions when possible, keeping patrons from waiting for tables inside and requiring staff to wear face masks.  

But it had one crucial difference: Roof asked for a 50% capacity limit. She said she doesn’t know where the governor got the idea to limit capacity at 33%, and that limitation is a heavy fiscal burden. It could lead some businesses to close, Roof said.

“Opening up at a limited capacity won’t really get them anywhere,” she said. “Until they’re at full capacity, they won’t be able to even start digging out of that hole.”

Still, she’s pleased restaurants will now get the chance to open back up. She said the state’s restaurant industry has lost more than $550 million since the pandemic hit and more than 80% of employees have been furloughed.

“Putting people back to work has to be a positive thing,” she said. “This is what the governor has to do, put your toe in the water.”

Beshear’s spokesperson declined to provide details about the data and science Beshear is using in his decision making process for reopening. The governor’s office also declined to provide copies of reopening proposals submitted to his office by businesses and business associations, claiming the records are “preliminary documents not subject to public inspection.” 

But representatives of industries and chambers of commerce that submitted the plans felt their input was influential in helping craft the requirements businesses must now follow.

NKY Chamber

Brent Cooper

“The governor’s office has listened to our concerns and adjusted policy based on those concerns,” said Brent Cooper, the president and chief executive officer of the Northern Kentucky Chamber of Commerce.

Cooper said they successfully lobbied to allow employees to self-report their temperatures, instead of requiring employers to conduct the temperature screen.

Also, Cooper said the governor dropped a requirement for employees in the shipping and handling sectors to wear gloves after the chamber argued that grocers, and food delivery workers aren’t required to wear gloves.

“The state said, ‘you know what, you’re right,’” Cooper said. 

The governor’s office also changed face mask requirements after input from industry leaders, said Lee Lingo, executive director of the Kentucky Association of Manufacturers. Wearing face masks at all times just wasn’t practical for welders and other workers who already are required to wear face coverings, Lingo said. The state amended its policy for manufacturers to encourage social distancing when possible, and require face masks only when more than one person is in a vehicle.

“We were able to provide a considerable amount of input and it was all taken into consideration,” Lingo said.

But despite that input on health and safety, these groups say they’re not responsible for the public health considerations of this pandemic.

GLI

Iris Wilbur Glick

“When it comes to infections, we’re sort of hands off,” said Iris Wilbur Glick, the vice president of government affairs and public policy for Greater Louisville Inc.

Glick said business owners should understand that if they cannot follow the guidelines, then they shouldn’t reopen.

“Just because you can reopen, doesn’t mean you should,” she said.

No 14-Day Decline Yet

Beshear has developed a few catchphrases during his daily 5 p.m. briefings, and one is about beating coronavirus on the first try. That’s what he discussed when he laid out his benchmarks for reopening, based on the benchmarks laid out by the White House. 

“Let’s make sure we’re not focusing on the next game before we win this game,” he said. “Lives are depending on it.” 

Kentucky has increased testing capacity and the availability of personal protective equipment. The state has tested nearly 3% of the population, a number that has doubled since just May 6. 

But on other benchmarks, progress is slow or merely theoretical at this point. The state has said it plans to hire 700 contact tracers, but has only just awarded the contracts to begin hiring. One benchmark is the status of vaccine and treatment; while that’s not something Kentucky has much control over, there’s no vaccine and treatment options are still limited.

The benchmark that can be measured most clearly is also the one Kentucky has most clearly not met: 14 days where cases are decreasing. There was a huge spike in new cases when more testing became available, and since then, Kentucky has reported between 100 and 250 new cases a day. Most days are on the higher end of that scale.

Even the three-day average of new cases climbed steadily for a week before it started declining on Sunday. 

The percentage of people tested who were COVID-19 positive has been declining as more testing has become available, which public health experts say is a very good sign. Before the increase in testing, more than 8% of tests came back positive. For the last week, it’s been closer to 6%. 

But that also has not been consistently declining for 14 days. Even before a minor increase reported Saturday, Kentucky had seen a declining percentage of positive tests for only eight days. 

As of Tuesday, Kentucky has recorded 8,069 cases and 366 deaths. And during his regular evening briefing, Beshear also announced the state’s highest single daily death count yet — 20 people. 

“This thing is still deadly,” he said. “It’s still taking people we love and care about.”

Peer Pressure And Public Opinion

Kentucky would not be the first state to reopen despite not meeting the White House’s benchmarks. Indiana, Ohio and Tennessee all opened restaurants to limited-capacity dining, weeks earlier than Kentucky. 

U of L/Nick Hagen

Adam Enders

That likely plays a role in Beshear’s thinking, said Adam Enders, a political science professor at the University of Louisville. 

“That’s going to supply some additional political pressure from people who are already sort of mad about this, or are just sort of bored and want to get back to life as normal,” said Enders. 

Usually, Enders said, we want politicians to be responsive to the will of the people, but when public health is at stake, they may have to make unpopular decisions. Beshear has proven that he’s willing to make those difficult choices, but at this point, Ender said, public opinion may be winning out. 

And social distancing measures rely on community support and buy-in more than government action. 

“The supportive infrastructure of, ‘we’re all in this together and we don’t really know what’s going on, so let’s just band together and do what we think is best,’ that’s starting to crumble now,” he said. 

Pam McMichael of the Kentucky Poor People’s Campaign says the public health question has not been sufficiently answered to justify reopening the economy. The organization has been very impressed with Beshear’s work as a governor, but the rush to reopen Kentucky before a significant decline in cases “speaks to the values of putting profits over people,” she said.

“Opening businesses back up into unhealthy situations is not the only thing that we can do as a society or as a government or as a community,” McMichael said. “It’s a false narrative to say the only way to save the economy is to send people back to work in unsafe situations. Having a pandemic, and having people die, that also affects the economy.”

Kentucky is in a region with the lowest prevalence of workers offered paid sick leave in the country, and the commonwealth also ranks high for coronavirus risk factors, like obesity, diabetes and smoking. And economists are unsure of what the impact of reopening the economy at this point will even be.

It’s unclear if consumers will return to their old spending habits once restrictions are lifted, for example, and many of the industries most impacted by the coronavirus, such as travel and the airline industry, will be struggling long after Kentucky’s orders are lifted.

Jason Bailey, the executive director of the Kentucky Center for Economic Policy, said any economic gains to be had from reopening now won’t be enough to fix Kentucky’s budget problems. 

“We’re still going to have high unemployment. We’re still going to have businesses that can’t reopen or won’t reopen,” Bailey said. “The budget is going to be in terrible shape no matter what we do, for now, and it’s really about the issue of federal relief.”

Kentucky will need a loan from the federal government sometime this summer to keep paying unemployment benefits. Bailey and Beshear are part of a chorus of voices calling on Congress to provide financial assistance to states. The bipartisan National Governors Association has asked Congress for $500 billion in fiscal relief for states budgetary shortfalls.

The state’s business representatives also don’t know what reopening the economy will actually mean for the economy. 

“There are a lot of unknowns,” said Glick of Greater Louisville Inc. She said her agency is working with analysts to try and gauge the impact, but “there are lots of question marks.”

“The only way to support businesses is to give them a chance to open up,” she said.

Ashli Watts, the president and chief executive officer of the Kentucky Chamber of Commerce, said reopening now doesn’t guarantee a full economic recovery.

“We’ve never seen anything like this before,” she said. “I think most people are pretty realistic that we’re not just going to open up and things will be fine.”

In the long run, Kentucky’s economic health is tied to the health of the rest of the nation. Take Somerset, where Mayor Keck is champing at the bit to reopen. 

He said one of the county’s biggest employers is a factory that provides parts for Toyota. He worries that reopening Kentucky won’t be enough to save all those jobs — at least, not until the rest of the country is reopened and supply chains pick up again. Then, they still might have to wait until more Americans have enough disposable income to buy new cars. 

Beshear has said that the continuation of a phased reopening is dependent on how quickly the coronavirus spreads. Mayors and economists and workers and business owners are all waiting to see what comes of that decision. 

Williams, the Lexington gym staffer, is unsure whether she will return to work when fitness centers can open on June 1.

“I don’t want to bring it home,” she said. 

At Moonlite Bar-B-Q Inn, they’re cautiously preparing to reopen and are in wait-and-see mode about what this will mean for business.

It’s going to be expensive to get back up and running, even before you factor in the new costs: disposable menus, masks, gloves, cleaning supplies. Bosley’s not sure they’ll be profitable anytime soon. 

“All your bills you had before COVID-19, you still have,” said Bosley. “But you can only feed a third of the people that you were feeding before.” 

He’s eager to get their dining room reopened, but he’s not rushing it. He’s going to see how the reopening goes for other restaurants first. He’s worried that they could invest a lot of money in getting up and running again, only to learn that they’re being shut down again, or regulations are being rolled back. 

Moonlite is aiming to reopen on June 1, with the goal of avoiding the initial crush of people eager to get back to restaurants and celebrate Memorial Day weekend. 

“There’s a lot of money to be made” on a holiday weekend, Bosley said. “But it can’t all be about money.”

Eleanor Klibanoff covered Rust Belt decline and revival in Pennsylvania. She also worked for NPR and attended the George Washington University.
Jacob Ryan is a reporter for the Kentucky Center for Investigative Reporting.