Maryland businesses need a second round of federal stimulus to make it through the winter months, state Comptroller Peter Franchot told the Frederick mayor and aldermen Wednesday.
Although May's revenue estimates were higher than expected because of money from the federal stimulus and programs such as the federal Paycheck Protection Program, the state could be “in for some real tough weather” when the December estimates come out unless there's a second round of stimulus or if there's a second wave of the coronavirus pandemic, Franchot said in a virtual workshop of the mayor and aldermen.
The first round of stimulus helped small businesses in the state, he said, with about 70 percent getting some help.
Now, the federal government needs to authorize another round of help for businesses, he said.
Communities could lose 40 to 50 percent of their restaurants without more federal help, he claimed.
And while there's resistance in Annapolis to using the state's “rainy day” reserve funds to give small businesses some help, Franchot said there's another source of money available.
The state has a $585.8 million positive fund balance in an account of stimulus money that was withheld from income taxes that should be used to help small businesses, he said.
“This money is literally just collecting dust in a checking account,” Franchot said.
He said he asked Hogan again on Wednesday to release the money.
Hogan has said the state should be more conservative while the economic dangers from the coronavirus continue.
“With this public health and fiscal crisis far from over, it is no time to declare victory,” Hogan said in a release on Sept. 29. “Though we are in a better position both economically and health-wise than much of the country, this is still the biggest fiscal challenge we have ever faced. We will continue to plan for the worst, press Congress to act on additional relief, and make the tough decisions necessary to balance our budget.”
Mayor Michael O'Connor said he's talked to businesses all over the city. While they've figured out ways to make it work, they can't do that forever, he said.
The city announced on Thursday the start of a second round of microgrants for small businesses, which will use federal CARES Act funding to help small businesses in the city that have been significantly impacted by the coronavirus pandemic.