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Franchot: Maryland Environmental Service should be disbanded

Comptroller Peter Franchot. (The Daily Record / Bryan P. Sears)

Comptroller Peter Franchot said the Maryland Environmental Service should be disbanded following questions around a six-figure severance payment to a former director who left to become Gov. Larry Hogan’s chief of staff. (The Daily Record / Bryan P. Sears)

The Maryland Environmental Service should be permanently disbanded following the controversy over a six-figure severance payment made to a former director who left to become Gov. Larry Hogan’s chief of staff.

So says Comptroller Peter Franchot in comments made Tuesday during a wide-ranging interview with The Daily Record Editorial Advisory Board that included the state’s chief tax collector’s thoughts on the state budget, and concerns about returning children to schools, which he likened to a laboratory experiment.

A joint committee of Delegates and Senators have held hearings over the last two weeks following news of a more than $233,000 payout to Roy McGrath as he left the quasi-public Maryland Environmental Service to become Hogan’s top aide. While attempting to uncover details about the payment that appears to have been solicited by McGrath, those same lawmakers are considering potential reforms of the agency including how members of the board are selected and the length of their respective terms.

Franchot, speaking Tuesday, said the agency “created out of an abundance of good intentions … but it’s lost a lot of credibility in the last couple of weeks.”

The Maryland Environmental Service was created by legislation passed by the General Assembly in 1970. The nonprofit government corporation contracts with state and local government to perform environmental and public works projects but does not compete with private companies for its business. Though it receives no direct funding in the state budget, more than 90% of the agency’s revenue comes from governments. 

“It has a nice name but it probably at some point should be on the chopping block and be completely reviewed and disbanded based on the recent situation that was in the news,” said Franchot, adding that the state “probably should just get rid of it and substitute the private sector where they currently exist.”

Some good budget news on the horizon

Franchot also teased a small crumb of positive budget news.

Without providing specifics, Franchot said that the state will announce better than expected news on the final closeout of the fiscal 2020 budget.

“We’re going to report the revenue figures (Wednesday) where there will be a fund balance, I’m happy to report, and I think a lot of things I’m talking about could see some relief at the state level based on those numbers,” said Franchot.

In May, Franchot and the Board of Revenue Estimates projected that the state could lose between $925 million and $1.1 billion — an estimate greatly reduced from a $2.8 billion projection a month earlier.

In the five months since the start of the COVID-19 pandemic, more than 1.1 million residents have applied for first-time unemployment benefits. Economists say that supplemental $600 per week federal unemployment benefits and grants and loans to businesses to stay open and keep some working likely helped prevent some of the worst-case scenarios from occurring.

Additionally, in June, the last month of the fiscal year, the state reported its unemployment rate fell to 8% as it added 68,300 jobs – the first of a three-month trend of adding jobs.

Still, not all of the news is good. Franchot said the state is still facing a budget hole of $4 billion for the coming fiscal 2022 year. 

“For fiscal year ’22, which starts next July, I’m really lying in bed worrying about it,” said Franchot, noting the forecast takes into account assumptions that the virus will not have a resurgence and that the federal government will come through with “a huge federal stimulus plan to state’s like Maryland to patch the really large holes.”

The projection will likely require cuts to be made in the coming months.

Updated revenue figures for the coming year are expected later this month with the Board of Revenue Estimates releases its updated projections.

Breaking from Hogan on schools

During the discussion, Franchot restated his opposition to returning children to classrooms at this stage of the pandemic on the same day that Gov. Larry Hogan visited schools in Caroline County and praised school leaders there for starting the academic year with at least some children at their desks while others are at home.

“Every young person going back to school frankly is engaging, if they’re in person and not remotely learning, in something that can only be called some kind of experiment as to whether or not the virus is going to return in those environments,” said Franchot. “I don’t know about you guys but the elementary schools, middle schools and high schools I’ve been in, none of those young people are going to socially distance, wear masks or wash their hands, stay out of crowded hallways. it’s just opposite of what every young person does out of a sense of recklessness and invulnerability.”

Franchot recommended that school systems follow the lead of Montgomery County and delay bringing children into the classrooms until next year.

“We’re just asking for trouble, I think and I hope I am wrong with that,” said Franchot, adding: “If I had school-age kids there’s no way I’d let them go back before February 1st.”

Franchot characterized his position as a difference of opinion between himself and Hogan but the comments represent one of the largest breaks between the Democrat and Republican who have frequently touted their bi-partisan affinity for each other.

Two weeks ago, Hogan and State Schools Superintendent Karen Salmon and Acting Deputy Health Secretary Jinlene Chan offered schools a set of statistical guidelines that they can take into account in deciding when and if to reopen schools to students. 

The first is a county’s individual positivity rate. Currently, 20 of 24 counties are under 3.5%. Under 5% for at least two weeks is considered one benchmark for lifting restrictions, according to the Centers for Disease Control and Prevention.

The second relies on a county’s rate of new cases per 100,000 population. Only two counties — Allegany and Garrett — have rates low enough to justify in-class instruction. Another 20 have rates that could make them eligible for a hybrid instruction model that includes virtual learning at home.

Hogan, on Tuesday, visited schools in Denton in Caroline County Tuesday to mark the first day of school there with some students returning to classrooms.

Hogan told reporters Tuesday he thought Caroline County school leaders “had done a great job” bringing students back into the classroom including those who are “the most challenged” educationally or who lack equipment or internet service to take advantage of remote learning.

“It was very exciting to see some of the kids,” said Hogan. 

“I think Caroline County has done a wonderful job,” said Hogan, who also participated in some online classes taught from the school. 

Caroline County reports a positivity rate of 7.29 % and a new case rate of 25,56. Both are the highest in the state and would make it inadvisable for students to return to classrooms under the new advisory guidelines.

“I think it’s a mistake,” said Franchot. “I just disagree with him on this. I’m sorry that we’ve reached this point in the United States where we all have to take sides on something like this. It’s obvious that the virus ins alive and spreading in communities.”

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One comment


    Franchot is overreacting re MES. It does invaluable work for local governments. The board should be restructured and term limited. It also should have an independent ethics officer.