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Md. Senate approves $1.5B relief plan; measure goes to House

"This is, given our circumstances and our operations, this was a major accomplishment and I think all members in the Senate were proud to get this thing moving, because we know there are people that are hurting enormously and we want to see these resources get out to those who need it most," said Senate President Bill Ferguson. (The Daily Record/File Photo)

“This is, given our circumstances and our operations, this was a major accomplishment and I think all members in the Senate were proud to get this thing moving, because we know there are people that are hurting enormously and we want to see these resources get out to those who need it most,” said Senate President Bill Ferguson. (The Daily Record/File Photo)

ANNAPOLIS — A $1.5 billion proposal to provide aide to low-income Marylanders, struggling businesses and those who have been stymied in receiving unemployment benefits during the pandemic now makes it way to the House from the Senate.

The Maryland Senate Friday unanimously approved an amended and expanded pandemic economic aid package proposed by Gov. Larry Hogan. The approval comes just two weeks after the second-term Republican governor delivered his bill to the General Assembly.

“This is, given our circumstances and our operations, this was a major accomplishment and I think all members in the Senate were proud to get this thing moving, because we know there are people that are hurting enormously and we want to see these resources get out to those who need it most,” said Senate President Bill Ferguson.

The Senate leader along with House Speaker Adrienne Jones and the governor identified pandemic economic relief as a top priority for the 2021 session.

Hogan praised the Senate, saying: “This is what effective and bipartisan leadership looks like.”

“Now I urge the House to follow suit in short order,” the governor said. “With so many fighting just to hang on in this unprecedented crisis, Marylanders simply cannot afford to wait. Every day that goes by without passing this emergency legislation means more struggling families and small businesses will suffer. This must continue to be the most important priority of the legislative session. ”

The proposal, which Hogan dubbed The RELIEF Act of 2021 — The Recovery for the Economy, Livelihoods, Industries, Entrepreneurs and Families Act — includes targeted financial relief and tax cuts to struggling individuals and businesses, according to the governor.

The governor’s plan also calls for the elimination of all state and local income taxes on unemployment payments. 

The plan approved by the Senate calls for $1.2 billion of the total $1.5 billion to be spent in the next four months.

Included in the governor’s proposal 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.

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 plan also would place 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 Senate version of the bill now moves to the House of Delegates. The House Ways and Means and Economic Matters Committees held hearings on the bill Thursday.

House leaders have provided few details but say they will have their own take on the bill as early as next week.

“I think there’s wide, bipartisan agreement in Annapolis that we should be moving the RELIEF Act,” said Del. Eric Luedtke, D-Montgomery and House majority leader, speaking during the Democratic response to Hogan’s State of the State speech Wednesday. “You’ll see the House take a slightly different position on the bill and how we should craft it.”

Ferguson, speaking to reporters Friday, said he was confident a final version of the plan could be hammered out quickly.

“I think we’re all unified in the scope of need and the vulnerability of Marylanders right now,” said Ferguson. “We may have different ideas about what exactly is the best way to get aid to those people as quickly as possible.”

Included in the overall price tag is $520 million in programs desired by the Senate, including $1,000 direct payments to some 40,000 out-of-work residents who are still waiting for the state to adjudicate their unemployment benefits claims. Some have been waiting since last spring.

The plan also would place 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.

Despite the price tag, Senate Republicans also signed off on the expanded bill.

“I am encouraged that Republicans and Democrats are laser-focused on quickly providing additional relief to those individuals and businesses who have been affected the most by the pandemic,” said Bryan Simonaire, R-Anne Arundel and leader of the Senate Republicans. “The cost of the bill is concerning, but thanks to Governor Hogan’s sound fiscal management over the past six years we are in a solid position to take this step, and have plans in place to pay back the rainy day fund within the year.”

Left in the bill is a roughly $180 million reduction in local government revenues. The vast majority of the cut comes from removing the income tax levy on unemployment benefits.

“We will continue to work with local governments, but we need to act now to help those most needing support during this pandemic,” said Simonaire. “Many times it was local restrictions that have led to greater financial hardship of their constituents and it is imperative they have our support.”

 


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