Maryland business owners could see additional state aid as part of Thursday announcement from Gov. Larry Hogan, who is being urged by a prominent Democrat to make any package large and quickly available.
Hogan, a second-term Republican, firmed up the timeline for an announcement during an exchange Wednesday with Comptroller Peter Franchot. The state’s top tax collector made a direct appeal to the governor for $500 million in immediate state aid for businesses.
“Survival is the key here,” said Franchot, speaking to Hogan during the Board of Public Works meeting. “This is super important, and a month from now it’s not going to be doable.”
Franchot estimates that 30,000 businesses across the state have closed or will permanently close because of the economic losses related to the coronavirus pandemic. If additional small business relief doesn’t come another another 20,000 to permanently close their doors, he estimated.
Democrats in the House of Representatives and Republicans in the U.S. Senate have failed to compromise on a new round of stimulus both for businesses and for states who have taken sharp revenue hits because of the pandemic.
The comptroller said that stalemate requires states like Maryland to act independently and “shame” the federal government into acting.
Previously, Franchot called on Hogan to use as much of the $1.2 billion in the state’s rainy day fund to assist businesses. A second proposal would have used $585 million in the state’s unallocated surplus account.
On Monday, he urged the governor and legislature to add $500 million to a recommended borrowing plan of nearly $1.1 billion for the coming budget year. The borrowed money would then be used to help struggling businesses.
“The $500 million is there, and if you need a back up because you’re afraid there’s going to be some downturn next year where we’re going to have to lay people off from the state system, we can borrow that money one time only to keep as a backstop,” Franchot said, speaking directly to Hogan. “But right now the money is there and I would just beg you to free it up.”
Hogan has rejected Franchot’s ideas, citing the state’s own projected fiscal problems related to the pandemic.
“I can assure you that I’m not afraid of anything,” said Hogan. “We’ve been more aggressive than anybody. We’ve already distributed $10 billion in economic relief from the federal government. The state has already invested $250 million in tax money to help state businesses.”
Hogan, responding to Franchot, said he will make an announcement about additional state aid to businesses at a Thursday news conference. The governor teased the announcement Monday in response to questions from The Daily Record during an event in Hurlock in which he announced $10 million in pandemic aid for contract poultry farmers.
Local business groups said they are awaiting details of Hogan’s plan.
Mike O’Halloran, state director of the National Federation of Independent Businesses, said small business owners are in dire need. A recent survey done by the national organization found half of the owners who received a loan through the federal Payroll Protection Plan said they will likely need additional aid in the next 12 months.
“So it is welcome news Governor Hogan plans to announce more state aid for struggling Maryland small businesses,” said O’Halloran. “At the same time, our members are nervous about their unemployment insurance premiums skyrocketing. Hopefully both the governor and the General Assembly will bear this in mind as another way to get small business some financial relief.”