Hogan Proposes $1 Billion Relief Package, Pressures Legislature for Swift Passage

Gov. Lawrence J. Hogan Jr. (R) at a State House news conference in January 2021. Photo by Joe Andrucyk/Executive Office of the Governor.

Gov. Lawrence J. Hogan Jr. (R) unveiled a proposed billion-dollar stimulus package at a Monday morning press conference, which would give low-income families $750 checks if passed by the legislature.

If enacted, Hogan’s Recovery for the Economy, Livelihoods, Industries, Entrepreneurs and Families (RELIEF) Act would offer stimulus checks to Marylanders who qualified for the Earned Income Tax Credit in 2019 or 2020. The payouts would amount to $450 for individuals and $750 for families, with no application needed.

Hogan estimated that the $267 million in direct payments would help roughly 400,000 Marylanders. The stimulus checks would be in addition to anticipated payouts from the federal government.

Hogan said he needs the legislature’s help in passing some of the RELIEF Act’s measures, which extend beyond his emergency powers – and demanded that lawmakers quickly pass the emergency legislation.

“We took every action that we could take alone,” Hogan said.

The stimulus package provides $180 million in tax relief for unemployed residents by repealing all state and local income taxes on unemployment benefits. It would also allow small businesses to keep up to $12,000 in sales tax over the next four months, amounting to $300 million statewide.

Hogan also wants the legislature to extend and codify his executive order protecting businesses from sudden increases in unemployment taxes due to layoffs, amounting to $218 million in savings. The act would also eliminate taxes on the state’s emergency relief grants and loans for businesses.

Only about $100 million of Maryland’s rainy day funds would be be used as part of the relief package – a far cry from what other state officials and local leaders have demanded of Hogan.

Members of the Maryland United for COVID Relief NOW Coalition, headed by Comptroller Peter V.R. Franchot (D) and Montgomery County Councilmember Tom Hucker (D), held a virtual rally on Sunday to demand Hogan use more of the rainy day fund for COVID-19 relief.

Franchot has floated using a much larger portion of state reserve money for $2,000 stimulus checks to qualifying Marylanders at a cost of $925 million. He also wants to use state money for more local business aid, and in total proposed using more than a billion in state reserves for residents and businesses.

In a Monday statement on social media, Franchot said Hogan’s proposed stimulus doesn’t go far enough to help working residents. He also said the proposed checks won’t get to families fast enough.

“Maryland families need help now, but instead the Governor is passing the buck to the legislature,” Franchot wrote. “The Governor knows that he has the power to authorize direct cash payments to those in crisis right now. He can help struggling families right NOW.”

Hucker told Maryland Matters that Hogan doesn’t need to involve the General Assembly to issue the relief demanded by the coalition. He characterized Hogan’s claim that he’d done everything he could without involving legislators as “patently false.”

Hucker pointed out that Franchot and state Treasurer Nancy K. Kopp (D), who sit with Hogan on the state’s most powerful spending body, the Board of Public Works, have thrown their support behind the coalition. He emphasized that coalition leaders don’t want to empty the rainy day fund, but rather quickly use a larger chunk of the state’s reserves and then replenish it.

“People need help right now,” Hucker said. “Businesses are closing every day.”

Hogan’s plans for a new state stimulus bill predate the coalition’s formation. He said using the state’s entire rainy day fund would be an “irresponsible action,” and said he was following along with the legislature’s recommendations in using only portions of the state’s reserve money.

In December, a bipartisan legislative budget panel recommended using some of the state’s rainy day fund to combat anticipated shortfalls in the state’s budget.

Hogan noted that more federal relief funding is on its way to the state, including $400 million for much-needed rental assistance. The state has already spent more than $700 million in relief for residents and businesses, and doled out billions in unemployment benefits to Marylanders, Hogan said.

Whether the legislature moves quickly to act on Hogan’s proposal — or sees it as an opening gambit — is an open question. Legislative leaders have echoed Hogan’s assertion that providing help to the neediest Marylanders should be the top priority of the session, which begins on Wednesday, but they have yet to release details of their own economic relief package.

In a statement released after Hogan’s news conference, Senate President Bill Ferguson (D-Baltimore City) and House Speaker Adrienne A. Jones (D-Baltimore County) said Democrats in the legislature are “focused on getting families and small businesses back on their feet” in addition to getting students back in schools and ensuring the safety of seniors. The presiding officers said General Assembly members are planning legislation to address “a broken Unemployment Insurance system” and aid small businesses.

“We look forward to the Governor working with us to accomplish these goals and demonstrating for the country what the true value of bipartisanship can be,” Jones and Ferguson said.

Sen. Guy J. Guzzone (D-Howard County), the chair of the Senate Budget and Taxation Committee, called Hogan’s proposed stimulus a “good place for us to start” when it comes to getting relief to Marylanders.

Guzzone said he doesn’t think draining the state’s rainy day fund is in the best interest of the state, and added that Marylanders could still get meaningful relief without using all of the reserves.

“I actually don’t think it’s necessary, to provide substantial relief, to drain it all the way down in that regard,” Guzzone said.

He noted that many of the legislature’s relief efforts will depend on Hogan’s budget proposal, which is due later this month.

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