ANNAPOLIS — Gov. Larry Hogan Monday said he will push for $1 billion in aid to businesses and individuals struggling financially as the coronavirus pandemic moves into a 10th month.
The announcement in Annapolis comes two days before the General Assembly is scheduled to return for a 90-day session that will be overshadowed by a virus that continues to hospitalize Marylanders at record rates and has taken more than 6,100 lives in the state.
The news conference Monday marked Hogan’s first legislative priority announcement for the coming session. The governor called on lawmakers to quickly pass his bill, which he said he will introduce on the first day of the session.
“We’ve taken every action we could take alone,” said Hogan, in discussing the proposal he called The Relief Act of 2021 — The Recovery for the Economy, Livelihoods, Industries, Entrepreneurs and Families Act. The package includes targeted financial relief and tax cuts to struggling individuals and businesses, according to the governor.
Legislative leaders said last week they also intend on focusing on how the pandemic has affected residents financially.
Included in the governor’s proposal, which was not immediately available for review after the announcement, is nearly $270 million in direct payments to families in need. Families who apply for the earned income tax credit will receive $750 in additional payments while individuals will receive $450. A total of 400,000 people would be eligible, and no application would be necessary.
The governor’s plan also calls for the elimination of all state and local income taxes on unemployment payments, an amount totaling about $180 million.
That plan, if made retroactive to last year, could have a fiscal impact on local governments for any taxes levied in 2020 as well as the current tax year.
Another $300 million in tax relief for small businesses would come from allowing 55,000 small businesses and restaurants to keep up to $12,000 each in sales taxes over a four-month period.
The governor said his plan also calls for a hold for all of 2021 on increases on state unemployment taxes to small businesses, officially codifying an executive order issued late last year. The move, Hogan said, would save small businesses $218 million.
The proposal, if passed, would also eliminate any taxes on small businesses triggered by the receipt of government grants or loans provided during the pandemic. Hogan said that move would save small businesses $40 million.
“Today’s announcement puts at the forefront a number of NFIB’s priorities,” said Mike O’Halloran, state director of the National Federation of Independent Business. “Our members have been urging their elected officials to get money into the hands of small businesses since the beginning of the pandemic. There is still much work to be done. Our attention now turns to the General Assembly as they consider this and several other key pieces of legislation that will benefit not just our state’s small businesses but all Marylanders. We will continue to urge legislators to keep the health of our economy and its small businesses at the forefront. The litmus test for any bill being considered by the General Assembly should be, ‘will this help Marylander’s get back to work and allow small business owners the room they need to survive and succeed?’”
Hogan said the proposals will be paid from budget reductions made last summer as the state attempted to get ahead of potential massive decreases in revenue that ultimately were lower than expected, from the state’s reserve fund and from about $100 million in the state’s rainy day fund.
The governor said he has had “productive” discussions with legislative leaders about the need for additional aid.
“It is clear to all of us that the primary focus of the 2021 legislative session must be providing additional, immediate economic relief to the hundreds of thousands of struggling families and tens of thousands of small businesses that have been impacted by the pandemic,” said Hogan.
How much support Hogan has from either presiding officer is, as of yet, unclear.
“Everybody, I think, generally agrees with most of the things we’re talking about,” said Hogan. “There might be additional things or things, they’d rather do this or that. We’re looking forward to those discussions but we can’t waste a lot of time. This is not something that should be debated until the end of the legislative session in April.
Senate President Bill Ferguson and House Speaker Adrienne Jones both said in interviews last week that they also plan to focus on a pandemic relief package but did not release details.
“The members of the General Assembly have spent the interim putting together legislation to fix a broken Unemployment Insurance system, protect essential workers, provide aid to struggling small businesses and greater resources for family members in nursing homes,” said Ferguson and Jones in a joint statement. “This session, Democrats are focused on getting families and small businesses back on their feet; getting students back to school as soon as possible; and ensuring our seniors are safe so 2021 can become the year of rebuilding and recovery. We look forward to the governor working with us to accomplish these goals and demonstrating for the country what the true value of bipartisanship can be.”
Comptroller Peter Franchot, a Democrat who has said he will run to succeed Hogan in 2022, has called on direct payments using the state’s rainy day account of about $1.2 billion.
“Over the past several months, I have been advocating for the governor to utilize the $1.5 billion in reserves gathering dust in our state’s treasury for $2,000 direct payments to low-income families and more funding for small businesses,” said Franchot. “The governor’s plan, regrettably, falls woefully short at not only providing the adequate amount families need, but the speed in which it will be distributed.”
Hogan said Franchot’s plan would drain the rainy day account and isn’t something the state has the ability to do.
“We believe this is actually getting more money in the hands of more people that need it and getting it out much faster without taking an irresponsible action,” said Hogan.