Business groups around the state will be looking for assistance from state government during the 2021 General Assembly session as they struggle to regain their footing in the wake of the COVID-19 pandemic that has hobbled the state’s economy.
Those industries aren’t just looking for financial assistance to offset losses. A number are seeking policy changes, including liability protection and holding the line on changes to laws or regulations that would affect business owners.
“Because we’re still very much in the thick of the pandemic, many small businesses really continue to struggle to make ends meet while we wait (to see) … how quickly we can get our economy back up and running, and some of these businesses, particularly the ones that are really customer-facing, back up and running at full capacity,” said Ashley Duckman, a lobbyist for the Maryland Chamber of Commerce. “So, really, any financial support is needed and appreciated.”
The Office of the Comptroller last year estimated that as many as 30,000 businesses may have already closed.
There may be no shortage of potential allies, at least on paper.
In the days leading up to the start of the 2021 session Wednesday, Gov. Larry Hogan has hinted at a relief package to help the state’s economy.
“Our priorities for the session are pretty simple,” Hogan told reporters Thursday. “We’re focused on response to the virus and the recovery of our economy.”
Hogan has yet to roll out details of his aid proposal but said he has talked to Senate President Bill Ferguson and House Speaker Adrienne A. Jones about the need to provide relief.
“I think we all share the same desire that the most important priorities are struggling Marylanders, struggling businesses, helping people get the assistance they need, providing more economic relief and continuing to fight the virus,” said Hogan.
The presiding officers, in separate interviews, said they will also prioritize aid to individuals and businesses hit hard by the pandemic including rental assistance.
“We have a COVID recovery package, which is from lessons learned from what has taken place during this time,” said Jones.
Details could come in the first week of session but are expected to including structural changes to the state’s unemployment insurance system to help people who continue to struggle to have benefits approved as well as a possible expansion of long-term benefits.
Jones said the legislature hopes to provide some assistance to small businesses that have not laid off employees and support for restaurants. And she said lawmakers are exploring targeted aid for those behind on utilities and relief for tenants who need help staving off evictions.
It is unclear how those proposals would be funded, but Jones noted that the state is slated to receive $400 million from a new round of federal aid. Both Jones and Ferguson said they are optimistic additional federal assistance could come following the swearing in of President-elect Joseph Biden on Jan. 20 as well as a Democratic majority in the U.S. Senate.
Help so far
Last year, Hogan tapped the rainy day fund to the tune of $250 million for aid to businesses. He also announced the state would forgive roughly $75 million in pandemic assistance loans, and he increased aid to restaurants, nonprofits and others.
Those moves were on top of billions in federal aid in the spring to businesses and to individuals in the form of direct payments and expanded unemployment benefits. The aid, now largely spent, is credited with helping keep the state’s economy from precipitous declines initially projected by the analysts with the state Board of Revenue Estimates.
Comptroller Peter Franchot, who has already announced plans to run for governor to succeed Hogan, is warning that a failure to provide additional aid could cause another 20,000 businesses to close by the end of the year. Franchot has called on Hogan to provide $500 million for small businesses, either from the rainy day fund or through increased borrowing that would allow other state resources to be shifted to economic aid.
Last week, Del. Brooke Lierman, D-Baltimore and a candidate for comptroller, joined Franchot in a call for immediate and direct emergency payments from the state rainy day fund to small businesses, renters, workers and families suffering from the economic pressures of the pandemic.
“It’s been nearly a year since this crisis began, and Maryland families and small businesses are barely hanging on. Some have not made it,” said Lierman. “We cannot wait for another small business to close, for another family to be evicted from their home, for another child to go hungry today. The federal government has been unable to provide the relief necessary to keep Maryland families and businesses afloat, so we must take matters into our own hands.”
Restaurants and hotels
Among those hardest hit have been businesses within the lodging and hospitality industries, which have accounted for much of the job losses as travel, tourism and dining out have been reduced by people’s unwillingness to go out and state orders limiting or prohibiting those businesses from operating.
“When you consider the impact of restrictions on our industry, as well as the potential for hotels to benefit the state economically when demand returns, relief to our industry makes good sense,” said Amy Rohrer, president of the Maryland Hotel Lodging Association.
Hogan last year provided some relief for the industry last year, but Rohrer said some are still struggling.
“When it comes to monetary relief, hotels are certainly deserving of relief,” said Rohrer. “We were among the first to be impacted by the pandemic, and we will be among the last to recover. We are extremely grateful for the $50 million in relief that was provided by the state last year, specifically for hotels, but we are hopeful that a more significant amount will be considered as part of that larger relief package that will be proposed by the administration.”
Similarly, business groups are concerned about unemployment insurance and the potential for increased rates because of historic levels of unemployment driven by the pandemic and a statewide lockdown.
In recent years, employers in the state have paid some of the lowest rates as unemployment remained low and the trust fund increased.
The governor has, so far, held the line on those rates but most expect that without some federal assistance that employers will eventually have to pay substantially higher unemployment taxes to replenish the fund.
Cailey Locklair, president of the Maryland Retailers Association, said some businesses could pay up to $200 per employee even if they did not have employees who filed claims.
“Those issues are pretty pervasive, and they stand to impact businesses pretty significantly, too,” said Locklair. “For a small business, if you have an increase of a couple thousand dollars because of an increase in UI taxes — especially now, when you went from whatever your revenue was before to 25% of your previous revenue, and you’re trying to juggle everything? I mean, some of these are nails in the coffin.”
The association is working with Sen. Kathy Klausmeier, D-Baltimore County, and Del. Ned Carey, D-Anne Arundel, “on a way to make sure that those businesses, through no fault of their own, all of a sudden do not see a massive increase,” according to Locklair.
Businesses and the Maryland Hospital Association will also be seeking to limit liability claims from customers and employees who contract the virus during the pandemic.
“At the end of the day, people need to go to work, and if the employer, through no fault of their own, has an employee or customer that contracts COVID, they shouldn’t be liable for it,” said Locklair.
The Maryland Hospital Association is looking to update liability laws that would expand the definition of health care worker as well as take into account challenges specific to the pandemic, including staffing shortages and lack of personal protective equipment.
“We believe those are very unique challenges. Those challenges were not imagined 20 years ago when Maryland’s existing statute was put into place, and for those reasons, we want to see them updated this year,” said Nicole Stallings, the hospital association’s senior vice president for government affairs and policy.