Gov. Larry Hogan on Monday announced a plan to provide about $1 billion in tax relief and economic aid to Marylanders and small businesses impacted by the coronavirus pandemic.
The Recovery for the Economy, Livelihoods, Industries, Entrepreneurs and Families (RELIEF) Act will be introduced Wednesday when the General Assembly convenes for the 2021 legislative session.
“We will ask both houses of the legislature to act on it immediately so that I can sign it into law immediately and that these relief measures can take effect and we can immediately get these much-needed dollars out the door and into the pockets of those who desperately need it,” Hogan said.
The relief package would include $450 for individuals and $750 for families who qualified for Earned Income Tax Credit in 2019 or who will qualify when they file their 2020 taxes.
Those payments would cost the state $270 million. Payments would be sent directly to more than 400,000 Marylanders, who would not need to apply for the money, Hogan said.
Hogan’s proposal also includes $180 million to repeal all state and local income taxes on unemployment benefits, and $300 million in small business tax relief to allow more than 55,000 restaurants and small businesses to keep up to $12,000 of sales taxes over a four-month period.
The RELIEF Act would also codify an executive order that Hogan issued last month, preventing small businesses from facing “sudden and substantial” increases to their unemployment taxes.
Money for the relief package will come from a variety of funding sources, including the state’s rainy day fund and other reserve funds, as well as earlier budget savings that the Board of Public Works took, Hogan said.
Hogan called for bipartisan support for the RELIEF Act from the state legislature.
“Every day that goes by without passing a stimulus and tax relief package means more jobs that will be lost, more families who will lose their homes, more businesses who will go out of business, and more people will suffer,” he said. “Struggling Marylanders and small businesses who are barely hanging on cannot afford the kind of partisan bickering and needless delay that we have seen in Washington.”
Although Hogan said he welcomes discussion of the bill, he urged state lawmakers not to delay approving the money for struggling Marylanders.
“This is not something that should be debated until the end of the legislative session in April,” he said. “In the meantime, we’re losing thousands of businesses and tens of thousands of people are losing their jobs and their homes.”
Comptroller Peter Franchot, who has launched his campaign for governor to replace Hogan when his term ends in 2022, proposed for Maryland to issue $2,000 stimulus checks to supplement the $600 checks approved by Congress.
But Hogan said Franchot’s plan is “simply not possible” and would drain the state’s rainy day fund.
“In maintaining our rainy day fund, we want to maintain our AAA bond rating and we want to make sure that state government continues to function,” Hogan said. “We believe [the RELIEF Act] is actually getting more money in the hands of more people that need it and getting it out much faster without taking irresponsible actions.”