Maryland fiscal experts say dire predictions that state revenues would crater due to the coronavirus pandemic haven’t panned out.
While the outlook remains concerning, officials said the second quarter federal stimulus helped buffer the effects of a recession.
Now, Maryland’s comptroller is calling for the state to come up with its own one-time financial aid package for residents.
Andrew Schaufele, director of the board of revenue estimates, said the fiscal picture for state revenues has brightened since the fall.
“We have positive news relative to September,” he told state officials Friday, but added, “It’s important to note our numbers are still down relative to pre-COVID.”
The revenues for Maryland’s FY2021, the current fiscal year, are down $600 million, Schaufele said. For FY2022, the projections are $400 million lower than expected before the pandemic.
Schaufele said the state’s residents who earn lower wages have borne the brunt of the economic fallout of the coronavirus, but the second quarter federal stimulus “actually helped those households sustain their spending,” buoying state revenues.
Schaufele said according to current projections, the revenues for FY2021 are projected at $18.7 billion, and for FY2022, those figures tick upward to $19.8 billion.
At Friday’s meeting, which featured Maryland Comptroller Peter Franchot, state Treasurer Nancy Kopp and Budget Secretary David Brinkley, all three acknowledged the continuing financial struggles of families facing severe financial distress and small businesses facing closure.
The state’s revenue analysis projected the recession will look more like a “V” curve, with a steep decline followed by an upward climb. However, Kopp said, “This looks on the whole like a ‘V’ recovery, which is excellent, but it’s not really a ‘V’ for everyone.”
Franchot said, “I want the state of Maryland to step up and do the right thing in the form of a Maryland stimulus plan… I’ve 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, a Democrat who intends to run for governor, said he believes a one-time financial relief program is feasible. He has argued in the past that the state ought to use more of its “rainy day fund” to offer immediate aid.
Gov. Larry Hogan has previously tapped the state’s reserves to offer help to residents affected by the fallout from the pandemic, most recently in October, when he announced an additional $250 million aid package.
On Thursday, Hogan announced that $75 million in state aid to small businesses would be converted into grants, meaning that businesses wouldn’t have to pay back those loans.
While vaccines are expected to be available on a limited basis in the state, a welcome tool in the fight against the virus, Schaufele said Friday, “We know that the winter COVID wave is going to be far more significant than the prior waves. That exists nationally, and that exists in Maryland.”
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