Maryland’s top politicians on Wednesday praised a windfall of $3.9 billion in federal aid they plan to use to bolster the state’s unemployment system, provide emergency relief to struggling residents and improve access to broadband internet service.
Gov. Larry Hogan, a Republican, said he reached a “historic budget accord” with Democratic leaders of the state legislature on how to spend the money, which is coming to Maryland through the federal American Rescue Plan for relief from the economic fallout of the coronavirus pandemic.
“Maryland has once again shown the nation that people from different parties can still come together, that we can put the people’s priorities first, and that we can deliver real, bipartisan, common-sense solutions to the serious problems that face us,” Hogan said.
Hogan outlined the proposed spending during a State House news conference, joined by House of Delegates Speaker Adrienne A. Jones and Senate President Bill Ferguson.
The federal money will be used both for new spending and paying for programs that otherwise would be funded with state tax dollars.
For example, some of the federal money will help pay for the $1 billion Maryland RELIEF Act that was passed earlier in the session. That measure provides direct payments to low-income residents, tax breaks and business aid.
Jones, a Baltimore County Democrat, said the collaboration between the governor and the legislature puts the new federal money “to work in the best possible way to help Marylanders who need it right now.” She said the agreement represented “another great day for bipartisanship in the state of Maryland.”
State lawmakers began digging Wednesday into the details of the federal windfall, with a goal of incorporating the new money into the state budget before the end of the General Assembly session on April 12.
According to Hogan, the state also will use more than $1 billion of the new money to replenish the state’s fund for unemployment benefits. That would mean companies won’t have to pay increased unemployment taxes for two years.
Business groups welcomed the fix for unemployment. Typically, businesses pay higher taxes after layoffs, but many companies were forced to cut jobs last year when the government closed them to help slow the spread of the coronavirus. Had unemployment taxes shot up, that would have been “unsustainable” for many businesses, said Mike O’Halloran, state director of the National Federation of Independent Business.
“Today’s announcement gives us hope that Maryland small business owners can get back to work safer and stronger than ever,” he said.
And $300 million will help continue aid including enhanced benefits for people receiving temporary cash assistance and disability assistance.
Schools will receive $600 million to make reopening classrooms safer for students and teachers, and there’s $100 million for job training.
Another $100 million of the federal money will pay for enhanced pay for state government workers in some public-facing jobs through the end of the year. The pay was halted last September, and some workers will receive extra pay retroactively under the proposal.
The leader of the largest union for state government workers praised the investment in employees.
“Our members have helped lead the way to keep Maryland running throughout the pandemic — often at great risk and personal sacrifice,” said Patrick Moran, president of the American Federation of State, County and Municipal Employees Maryland Council 3.
Ferguson praised the portion of the plan that devotes $300 million to improving broadband access. While many workers and students encountered frustration with the need to work online during the pandemic, they were lucky compared to those who had no or slow internet access, Ferguson said.
Staying connected to school, work and family “should never have been about luck or ZIP code,” Ferguson said. Spending money on broadband will both tackle short-term needs and prepare the state for a changing economy in the long term, he said.
Maryland Policy & Politics
Maryland’s budget for the coming fiscal year has been in flux since the governor announced his $49 billion proposal in January. Shortly afterward, Hogan and lawmakers teamed up to pass the $1 billion RELIEF Act that required tweaks to the current budget and the next budget. The federal government also has sent streams of extra funding to state governments, requiring additional revisions.
Much of the new batch of federal money was included in a supplemental budget proposal that Hogan sent Wednesday to lawmakers, so they can start incorporating it into the state budget that’s under consideration.
But not all of the money was included, said David Romans, a budget analyst with the nonpartisan Department of Legislative Services.
“There’s quite a bit of money that’s not in here yet,” Romans told lawmakers during a briefing Wednesday afternoon. He said lawmakers should expect more supplemental budgets from the governor.
Versions of the budget have already passed the House and Senate, but the final details — including this new batch of federal money — still need to be worked out.
The General Assembly’s budget leaders praised the work between the legislative and executive branches on setting priorities for the federal money.
“This is a pretty big moment to have this level of agreement with the governor, with both houses, in a bipartisan way,” said Sen. Guy Guzzone, a Howard County Democrat who chairs the Senate Budget and Taxation Committee.