The scene on Main Street America is bleak. In urban and rural areas, shuttered storefronts have become an all-too-familiar sight. Maryland is no exception. From my hometown in Takoma Park to Havre de Grace, many businesses have closed or are hanging on for dear life.
Last week, Gov. Larry Hogan announced that he will use $150 million from the Rainy Day Fund to help Maryland businesses, with another $100 million reserved for emergency funding. That is a nice start, but frankly it is not nearly enough. This small amount of funding will be gone before most businesses even figure out how to complete the complex applications and submit them to the alphabet soup of agencies. In addition, his announcement does nothing for sole proprietors.
These hard-working small businesses seldom ask for assistance from government, but now they’re crying out for help. For the sake of our economy and communities, we must respond immediately with even more funding and make the process quick and easy.
Simply put, in the absence of significantly more state support than what Gov. Hogan has proposed, more businesses will shut down and take with them thousands of jobs, direct and indirect economic benefits and community investments. I know because I have spoken with owners of restaurants, retail shops, manufacturing plants and arts and cultural centers. They’ve pivoted their business models and adapted to ever-changing rules to ensure customer safety. They are creatively doing everything they can to keep the lights on.
Aroma Candle Studio in Bel Air opened last year to offer personalized candle making experiences, in addition to offering a large stock of premade items. Since COVID, they have opened an online shop and limited capacity to 50 percent while following stringent sanitation procedures. Around the corner, Anytime Fitness not only began strategic scheduling to socially distance, they instituted a no equipment sharing policy, require masks and gloves to be worn at all times, and perform a medical grade cleaning of the facility every two hours to keep people healthy and on target with their exercise goals.
Bowman’s Butcher Shop, the woman-owned neighborhood staple in Aberdeen for nearly 80 years, transitioned to online ordering with scheduled pickup times to limit interaction, along with masked, socially distant in-store shopping. Uncertain of how long the pandemic will last, they are adding a delivery service to select zip codes for those unable to leave home.
The Vineyard Wine Bar in Havre de Grace added outdoor seating and carry out to accommodate Harford wine lovers, while strictly adhering to CDC guidelines. The nearby Vandiver Inn has adopted self-check in service and pre-packaged breakfasts to minimize contact. In addition to enhanced cleaning procedures, they have closed public dining areas and instituted a penalty free cancellation for those feeling less than their best. These are just a few examples of the extraordinary precautions businesses are taking to stay afloat.
The state of Maryland ended fiscal 2020 with a $586 million fund balance, thanks in part to our federal jobs, as well as the federal stimulus and expanded unemployment programs, which helped stave off economic disaster. We should put this fund balance toward a small-business relief and rescue program immediately. We don’t even need to touch our Rainy Day Fund, which may be needed to fund our most critical needs, to protect our most vulnerable citizens, and to stabilize our economy.
The fact is, we’re still facing significant revenue shortfalls over the next several years, so we must brace for the likelihood that the worst may be yet to come. But if we don’t help our businesses now, we might wake up on the other side of this pandemic with Main Street as a ghost town.
Even the country’s best economists cannot predict how the pandemic will affect the labor market and spending patterns. The uncertainty of what lies ahead, when flu season collides with the coronavirus, leaves us staring into a potential economic abyss.
There is a lot we don’t know, which is what makes revenue forecasting such a difficult endeavor.
What we do know, and what the numbers show, is the influx of federal aid in the form of loans to businesses, stimulus payments to citizens and enhanced unemployment for those out of work have helped prevent, at least for the time being, an economic catastrophe.
Without that direct and rapid injection of funds to consumers and small businesses, we’d be in far worse shape. I’m confident that another much-needed stimulus will work as we head into the unpredictable fall and winter months.
What I’m not confident about is the ability of Congress to put down the partisan swords and pass a second stimulus package anytime soon.
Back home in Maryland, elected leaders should not hesitate to take the $586 million fund balance and invest it in the small businesses that fuel our tax base, employ our neighbors and support our communities.
If Gov. Hogan and the General Assembly could approve $8.5 billion in taxpayer incentives to lure Amazon’s second headquarters to our state — an ultimately unsuccessful endeavor that I supported — we can certainly spend about 7% of that to save thousands of Maryland’s small businesses.
We have the means to take action. We must not let this opportunity pass. We need to help our beloved local businesses now.
Peter Franchot, a Democrat, is the 33rd comptroller of Maryland.