No matter where we look, at whatever level of government, the warning signs are all flashing: 2021 is going to be a very difficult, challenging year for elected leaders to navigate.
From Washington to Annapolis to downtown Frederick and the offices of the city and county governments, officials are looking at the economic data and trying to figure out which way to go now and what is going to happen in 2021.
Everyone is hoping that the rollout of the COVID-19 vaccines will bring the pandemic to an end and allow the economy to recover, but no one knows how long it will take for mass vaccinations or for the recovery to begin.
On Capitol Hill, the Senate is struggling to put together a bipartisan pandemic relief bill, even as jobless benefit claims are spiking toward a million a week, the highest levels since Labor Day. The bill now being worked would help the unemployed, individuals and small businesses, but does not provide any aid for struggling state and local governments.
President-elect Biden has argued in favor of another relief and stimulus package that would include aid to state and local governments, but that proposal will have to await his inauguration on Jan. 20.
In Annapolis, the Board of Revenue Estimates is responsible for projecting how much money the governor and the General Assembly will have to spend through the rest of this fiscal year and the new year which will begin next July 1.
At a meeting last week, the board increased revenue projections very slightly, up 0.3 percent for the current fiscal year and 0.7 percent for 2022. But that is rising from a very low base, with expected revenue losses of more than $600 million this year and more than $300 million next year.
Comptroller Peter Franchot, the chair of the board, had previously warned the estimates could be flawed if hiring stalls again. That was before the latest report that 935,000 Americans filed new jobless claims last week.
Franchot remains so concerned about the effect of the pandemic on the state economy that he has recommended that the state enact its own stimulus plan, in addition to whatever help is received from the federal government.
“I have identified $1.5 billion in state reserves that could be spent immediately to prevent evictions, feed the hungry, provide medical care, and also support small businesses,” Franchot said in a news release.
“We are entering the worst three months in Maryland’s history because of the pandemic. The lives and livelihoods of our friends and neighbors are at stake.”
His suggestion is something Gov. Larry Hogan should adopt right now. More than 11,000 small businesses have closed permanently this year, and the current downturn threatens to wipe out more.
As for Frederick County, officials are looking nervously at the coming year and considering if or when to dip into a $100 million line of credit that was secured in June to help cover shortfalls in county revenue.
Lori Depies, the county’s finance director, told News-Post reporter Steve Bohnel that she is monitoring what lawmakers are doing on Capitol Hill, but also county property tax payments this month and income tax payments in February. Depies, who has worked in county government for about 18 years, said there’s a lot of uncertainty.
And finally, Frederick city officials are starting to turn their attention to next year’s budget. The fiscal 2021 budget the Board of Aldermen passed in May was about $5 million less than Mayor Michael O’Connor had planned before the pandemic hit.
City officials are still hopeful that revenues might come back in time for fiscal 2022, which will begin July 1 next year, but so much will depend on the economic vitality of the nation, state and region.
The city is at the bottom of chain of governments, and it is in many ways dependent on the actions of others.
National stimulus? A Biden stimulus? A Maryland stimulus? County property and income tax collections? A lot of questions there. And it will be a difficult few months ahead for all elected officials coping with the impact of the pandemic.