Maryland state and local governments are expected to receive roughly $11.9 billion as part of the American Rescue Plan Act, and U.S. Sen. Benjamin L. Cardin (D) told state lawmakers at a Wednesday briefing that he wants state and local governments to have “maximum flexibility” over their designated relief funds.
“There are certain requests to Congress to modify the time in which the funds can be spent, and the manner in which they can be spent,” Cardin said. “That is under consideration here, and we always welcome your thoughts as to whether additional flexibility is needed.”
Maryland Secretary of Budget and Management David R. Brinkley told lawmakers that of the expected total of $11.9 billion, about $3.7 billion is designated for state fiscal relief.
That’s slightly less than the $3.9 billion that was expected earlier this year when Gov. Lawrence J. Hogan Jr. (R) and legislative leaders hashed out an agreement on how to spend the money, Brinkley said, because of tweaks to the final federal funding equations.
However, the state also received updated guidance from the U.S. Treasury that Maryland will not miss out on stimulus funds because of a provision meant to limit the use of the stimulus to fund tax breaks.
The General Assembly passed a $200 million expansion of the state’s Earned Income Tax Credit before the stimulus bill was passed last March, but the measure took effect without Gov. Lawrence J. Hogan Jr.’s signature after the cutoff date included in the bill.
State lawmakers and officials had advocated for an exemption from the rule because of the peculiar timing of the two pieces of legislation.
Wednesday’s briefing included the Senate Budget And Taxation Committee, the House Appropriations Committee, the Joint Committee on Federal Relations and the Joint Committee on the Management of Public Funds. Sen. Chris Van Hollen (D) also attended the meeting.
Lawmakers at the meeting urged more collaboration between state and local governments to educate constituents about the various relief funding available.
Sen. Jill P. Carter (D-Baltimore City) said state and federal officials need to work together to educate community groups and constituents on how to access federal relief funding. She called the funding a “one-time, wonderful opportunity” to invest in underserved communities, but said more outreach needs to be done.
“I don’t want anything to get lost in bureaucracy,” Carter said.
Del. Trent M. Kittleman (R-Carroll and Howard) pressed Cardin on how the federal government was going to pay back its debt after spending so much on rent relief funding. Cardin said federal relief funding was key to averting an economic crisis, but conceded that he thinks the budget reconciliation and infrastructure packages currently moving through Congress need more “offsets” to balance spending.
But, in general, Cardin said those spending plans will boost communities “that have traditionally been left out.”
“We will not pass this reconciliation budget without strong offsets,” Cardin said. “We don’t have the votes to do it, first of all, and it’s the right thing to do. So we will have offsets.”
He said spending offsets could include raising taxes “on large corporations and wealthy people.”
Sen. James C. Rosapepe (D-Prince George’s) asked the U.S. senators whether the infrastructure bill, budget reconciliation bill and a proposal to raise the country’s debt ceiling would pass before the General Assembly convenes its 2022 legislative session.
“We have to get that done,” Van Hollen said of raising the debt ceiling. He likened not raising the debt ceiling to someone suddenly deciding to stop car and mortgage payments.
Van Hollen noted that the House passed a continuing resolution to keep the government funded and raise the debt ceiling Tuesday. He said he hopes the infrastructure and budget reconciliation proposals would also pass, but added “it’s a bumpy road.”
Sen. Mary Beth Carozza (R-Lower Shore) asked whether the senators planned to add more money to the restaurant relief fund, and noted that the hospitality industry took a particularly hard hit during the pandemic. Cardin said the effort to add more money to that fund will be a standalone bill rather than part of a larger package. He added that the proposal has “strong bipartisan support.”
“We need about $48 billion more to satisfy the need,” Cardin said. “We shouldn’t be shocked by that number.”
Lawmakers credited federal relief funding with helping to avert financial disaster for state government: Sen. Guy Guzzone (D-Howard), the chair of the Budget and Taxation Committee, said federal relief funding has made a “dramatic improvement” to the state’s budgeting situation throughout the pandemic.
Del. Maggie McIntosh (D-Baltimore City) said federal stimulus packages allowed the state “to help so many hundreds of thousands of citizens who were struggling with rent, struggling with food insecurities, struggling to get healthcare and struggling to meet their everyday needs” during the COVID-19 pandemic.
Kevin Kinnally, legislative director for the Maryland Association of Counties, cautioned that counties should avoid using one-time federal funding to pay for ongoing expenses. Kinnally also noted that counties are working with multiple pots of federal relief funding dating back to the CARES Act, and deadlines to spend some of that funding are fast approaching.
“This money is going to dry up eventually,” he said.
Editor Danielle E. Gaines contributed to this report.