Federal Stimulus Directs About $5 Billion to Maryland, But Rainy Days May Still Be Ahead

The U.S. Capitol. USGS photo by Toni Smith

Maryland is expected to receive almost $5 billion in federal assistance to respond to the COVID-19 pandemic, including substantial chunks of money to bolster government budgets, transit programs and the education system.

More than $2.3 billion will come to the state through the Coronavirus Relief Fund, which is intended to cover unexpected state and local spending for COVID-19 responses. The state and local governments could also tap about $800 million from a disaster relief fund ― if they put up a 25% match.

“The good news is, we’re getting a lot of this money,” David C. Romans, fiscal and policy coordinator for the Department of Legislative Service’s Office of Policy Analysis told members of the House Appropriations Committee, who met in a teleconference on Thursday. “The bad news is very little of it can be used to offset our revenue impact. So we’re going have to figure out how to get through this, at least at the moment, without a lot of additional federal money backfilling our lost revenues.”

The state and counties are anticipating significant losses in tax revenues for the fiscal year as the economy reels from dramatic efforts to stop the spread of the novel coronavirus.

Four Maryland counties are eligible to receive relief funding directly from the federal government:

  • Anne Arundel ($101.1 million)
  • Baltimore County ($144.4 million)
  • Montgomery ($183.4 million)
  • Prince George’s ($158.7 million)

The city of Baltimore is eligible to receive $103.6 million.

Smaller local governments may receive a portion of the $2.3 billion being sent to the state.

Maryland is also likely to receive about $695 million in transit grants and $275 million as an increased federal payment rate for Medicaid programs.

About $208 million is earmarked for local education systems and more than $183 million in direct federal aid will go to colleges and universities in the state.

Gov. Lawrence J. Hogan Jr. (R) will also have access to an estimated $45 million in discretionary funding for education programs.

The remaining $314 million headed to the state would cover enhancements to existing federal programs including public housing and rental assistance grants, community health centers, emergency food assistance and election security programs.

Maryland is guaranteed to receive at least $22.2 million from the Centers for Disease Control to expand COVID-19 testing, surveillance and tracing programs.

As of Thursday morning, there were 6,185 confirmed cases of the virus reported in the state and 138 Marylanders have died. More than 1,300 people remained hospitalized Thursday morning.

Comptroller Peter V.R. Franchot (D) is scheduled to give an update on the state’s revenue outlook Friday morning, which could include recommendations for fiscal leaders about actions that may be needed to balance the budget for the current fiscal year, which ends June 30.

Members of the Appropriations committee expressed concern about the loss of revenues during their Thursday meeting.

“We’re pretty close to the end of the fiscal year. And this is a huge drop in funding after frankly a lot of money has already been spent … is there any early read on what the plan is to deal with that?” Del. Marc Korman (D-Montgomery) asked.

“We certainly have the ability to pay our bills in some way, shape, or form through the end of the fiscal year,” which ends on June 30, Romans responded.

He added: “I think it’s very likely that the Rainy Day Fund will be tapped, perhaps drawn down to nearly zero to help offset the revenue loss.”

During the COVID-19 crisis, Hogan has so far made a relatively modest draw of $157 million from the state’s $1.2-billion-plus Rainy Day Fund. About $137 million of that money was used for grants to support local businesses and employment grants. Two additional allocations of $10 million went to subsidize child care for essential workers and for emergency services.

Hogan said Thursday afternoon during a televised town hall that the business grants had been entirely claimed.

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Editor’s Note: This story was updated to correct the total balance of Maryland’s Rainy Day Fund. 

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Danielle E. Gaines
Danielle Gaines most recently worked for Bethesda Beat covering Montgomery County. Previously, she spent six years at The Frederick News-Post as the paper’s principal government and politics reporter for half that time, covering courts and legal affairs before that. She also reported for the now-defunct The Gazette of Politics and Business in Maryland and previously worked as a county government and education reporter at the Merced Sun-Star in California’s Central Valley.