Islip to use $4 million of its federal COVID relief aid for small business grants

The Town of Islip is steering $4 million in unused federal pandemic relief funds to a grant program meant to help offset the impacts of the pandemic for small businesses and nonprofits.

Islip businesses that have been operating for at least four years can apply for up to $10,000 in grant funds through the program, called Keep Islip Thriving, according to town stipulations.

When the program launched in 2022, impacted businesses could apply for up to $5,000. Those that already won funding can apply for the difference.

“When those grants came out, they were life preservers,” said Michael McElwee, who owns multiple Bay Shore businesses and was elected to the Islip Town Board in November 2023. "The world was upside down and at the time, we were reimagining and reinventing our businesses."

The small business funds distributed in 2022 were part of more than $1 billion funneled into Long Island municipalities under a stimulus bill called the American Rescue Plan Act, or ARPA, approved by Congress in 2021 to help mitigate economic impacts of the pandemic.

ARPA funds must be used to replace lost revenue, address public health issues, provide premium pay for essential workers or boost infrastructure. Monies must be allocated by the end of 2024 and spent by the end of 2026. Unused funds will return to the federal government. 

For Islip, the bill meant a windfall of $47,551,642 that has been allocated for projects that include new turf fields and a playground zip line at Anthony Casamento Park in Bay Shore. The town did not provide updates on ARPA-funded projects. 

The town initially earmarked $2 million for direct aid to small businesses and nonprofits, helping 396 in the first round to improve facilities and purchase new equipment, among other things.

As of Tuesday, the town has received 10 applications for the new round of funding, according to town spokeswoman Caroline Smith.

“Many businesses continue to struggle with the latent effects of the COVID pandemic,” such as inflation and migration to e-commerce sites, Smith said of the town’s decision to add funding to the grant pool.

That sentiment was echoed by Eileen Tyznar of the Greater Sayville Chamber of Commerce, who said the funding opportunity will provide "much needed relief" to small businesses.

"Most of our small business owners feel the effects more now than in the past couple of years from the shutdown of COVID-19 because of rising costs," she said, adding that the chamber is "hopeful for more programs and grants in the future."

While inflation nationwide kept easing in August, with year-over-year price increases reaching a three-year low of 2.5%, inflation was significantly higher in the 25-county metropolitan area which includes Long Island at 3.7%.

Ken Girardin, director of research at the fiscally conservative Albany-based Empire Center think tank, criticized the town's decision to add money to the program, saying "the town may as well be throwing money out of a helicopter into the ocean.”

“This is a place where the town could be using the money to backfill its water and road infrastructure needs," he said. "Letting the supervisor and the board ... hand out money is not a responsible use of federal dollars." 

In order to qualify for the new round of funding, businesses must be in good standing, have no more than 500 full-time equivalent employees and demonstrate “an identifiable financial hardship” that resulted from the pandemic.

Applicants must also be current on all tax obligations, with no outstanding liens or judgments, and have no outstanding Islip Town code violations.

Checks will be processed and mailed to business addresses as applications are approved, Smith said. 

More information is available on the town website at https://www.islipny.gov/kit.

With Jonathan LaMantia and The Associated Press

By Brianne Ledda

brianne.ledda@newsday.com@brianne_ledda

Brianne Ledda covers the Town of Islip for Newsday. She previously covered Southold and Greenport for The Suffolk Times and is a graduate of Stony Brook University.