The General Assembly begins meeting today, and Gov. Larry Hogan has put forward a proposal for more than $1 billion in new economic relief for Marylanders who have been devastated by the coronavirus pandemic.

Hogan’s plan has a lot in there for us to recommend it. It will direct aid to the people who have been hurt the most by the raging pandemic: the working class, the unemployed and small businesses that are struggling to stay afloat.

Hogan proposed $267 million in direct payments to people who file for the Earned Income Tax Credit, giving $750 to families and $450 to individuals. The recipients are the very definition of the working poor, more than 400,000 low-income families and individuals throughout the state.

Hogan also suggested $300 million in tax relief, much of which would be aimed at small businesses that have been crippled by the economic destruction of the pandemic. The governor suggested letting them keep up to $12,000 in sales tax over the next four months, a direct shot in the arm for struggling smaller firms.

Lastly, the governor proposed eliminating income taxes on unemployment benefits. As the law now stands, jobless workers must pay income tax on some of their benefits. The state would forego $180 million in tax collections on the change.

Hogan said the proposal must be approved by the legislature, but most of the money would come out of previously approved actions of the Board of Public Works — a group that includes Hogan, Comptroller Peter Franchot and Treasurer Nancy Kopp.

Additional money will be used from reserve funds and $100 million from the Rainy Day Fund.

Franchot last month called on the governor to directly send $2,000 checks to help the people most in need, using money from the Rainy Day Fund, which he said the governor is empowered to do without waiting for approval from the General Assembly.

But Hogan rejected that idea, saying he was following guidance from the state’s Spending Affordability Committee, which consists of state senators and delegates.

“[Franchot] was talking about draining the entire Rainy Day Fund,” Hogan said. “We want to maintain our triple-A bond rating, and we believe this is getting more money in the hands of the people that need it and getting it out much faster without taking irresponsible action.”

Franchot, who is preparing to make a run for governor when Hogan’s term ends in 2022, shot back:

“Maryland families need help now, but instead the Governor is passing the buck to the legislature. The Governor knows that he has the power to authorize direct cash payments to those in crisis right now. He’s already tapped into the Rainy Day Fund to help small businesses, and now he needs to help families survive.”

For now, we do not want to take sides on which is the better way to help struggling Marylanders. There are strong arguments for maintaining the state’s credit rating to keep borrowing costs as low as possible. However, if the state cannot use its Rainy Day Fund when a financial hurricane like this one is raging, it is hard to see what a rainy day would look like.

Nonetheless, Hogan has made this proposal, and fighting about whether this is the best method for helping needy Marylanders is pointless. The legislature should act swiftly to get the help to the people who need it.

The General Assembly should go forward with Hogan’s plan immediately. There is no time to waste.

(4) comments

micky

How can you revitalize businesses that no longer exist, too little too late!!

Dwasserba

Rocky's on Opossomtown Pike has a number newly out of service. My hus calls on Thursdays or Fridays like for 20 years. Noooo

gabrielshorn2013

It is amazing that Maryland taxes unemployment benefits. This is an insurance policy that workers pay a premium to with every paycheck to tide them over if they become unemployed. Taxing such benefits reduces the already meager amount they receive when they need it most. Eliminate taxes on such benefits!

francesca_easa

Why has Governor Hogan waited so long before proposing this aid? How long will it take for state lawmakers to pass this? When is he going to fix the unemployment benefits fiasco?

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