During the past several months, County Executive Jan Gardner (D) and other county leaders have distributed nearly $45.3 million in coronavirus relief funding, nearly $5.6 million of which went to tourism and small businesses countywide.
Those small businesses needed assistance due to state and local government restrictions on capacity, and operations aimed to protect the public during the coronavirus pandemic. Gardner and other officials said they’ve given roughly $9 million in relief on small businesses, filtering through county and state monies.
As Gov. Larry Hogan (R) and Gardner have distributed funds and assistance, however—including Gardner’s administration donating 15,000 KN95 masks to restaurant—that relief money for small businesses will soon dry up. And if Congress is unable to pass a second major relief bill, many businesses face even greater challenges to survive.
If Congress can’t pass legislation, county officials may soon wrestle with the following question: Should reserve money be used to continue small business relief and similar efforts?
County leaders weigh in on use of reserve money
Gardner said after a news briefing Thursday she would ask the County Council in January to support a budget adjustment for “human service needs:” more rental assistance, eviction prevention, food for food banks and similar areas.
She hopes more federal relief comes by year’s end. Dipping into county reserve funds—roughly $51 million, The Frederick News-Post reported in April—is not as simple as drawing money out of an account, Gardner said.
That money would need to be replaced in next year’s budget, she said. It would also require County Council approval.
Gardner noted she still needs to spend money on the public health response to the pandemic, like personal protective equipment and making sure health care providers are otherwise equipped during the second surge.
“I’m not trying to pass the buck to Congress,” Gardner said in response to whether some feel she might be doing so regarding small business relief. “I’m trying to say, Congress is the source of federal money ... we need it. We need federal money to support the health care response ... and to support the economy. And local governments do not have the resources to prop up our entire economy. Our entire economy is bigger than my [$666 million] budget.”
Gardner said she would be willing to discuss dipping into reserves and other forms of relief for small business with council members and others in the coming weeks and months, depending on what happens on Capitol Hill.
One negative to drawing from reserve funds is it could temporarily lower the county’s triple AAA bond rating—a designation that helps county officials borrow money at lower interest rates to help pay for long-term capital projects like schools, libraries, parks and other endeavors.
County Council President M.C. Keegan-Ayer (D) and Vice President Michael Blue (R) both noted this in interviews Friday.
Keegan-Ayer said conversations about tapping into reserves would need to “ramp up” if Congress can’t do its job in the next few weeks. She added she would trust Gardner if she chooses to do that, but would be interested in seeing how much reserves would be needed.
It’s all “a balancing act,” Keegan-Ayer said—a phrase she often uses when describing local issues.
“If we spend it now and things get worse and we need it for PPE or for ultra-cold storage, we may not have it, and then you’re talking people’s lives,” she said. “The onus is really on the federal government, but the fact is, they can’t get their act together.”
Blue, who owns Brownie’s, an auto repair shop in Walkersville, said he opposes further restrictions on businesses—as seen in other jurisdictions, like Baltimore city, Anne Arundel County and Prince George’s County.
He acknowledged the work Gardner and other county officials have done for small businesses, but admitted the county’s reserves couldn’t help all of them countywide.
“We don’t want to deplete that because it’s a last resort … we’ll have to see how the metrics play out,” Blue said of the coming months.
Rick Weldon, president and CEO of the county’s Chamber of Commerce, went a little further than Keegan-Ayer and Blue in his description of the federal government.
Everything needs to be discussed regarding tapping into reserves or other options to help small businesses further, Weldon said. Like Blue and Keegan-Ayer, he thanked Gardner and Hogan for the support so far.
But he still fields many phone calls from small businesses struggling to survive, especially during the holiday season, typically a busy time for many of them. County officials need to seriously weigh saving those businesses and their employees versus some short-term budget work at replacing spent reserves and planning capital budgets.
Perhaps most importantly, Weldon didn’t mince words regarding the federal government’s work so far in passing a second major coronavirus relief bill.
“One hundred percent of this is in the lap of the United States Congress … a 535-person ship of fools that couldn’t find its way out of a paper bag with a compass, a map and a GPS unit,” Weldon said.