Hogan calls for hundreds-of-millions in direct payments as part of proposed emergency COVID-19 relief package

Posted at 12:13 PM, Jan 11, 2021

ANNAPOLIS, Md. — Governor Larry Hogan on Monday introduced an emergency $1 Billion COVID-19 relief package, for the General Assembly to immediately consider once their 2021 legislative session begins Wednesday.

It's called the RELIEF Act, and it proposes direct stimulus payments for about 400,000 low-to-moderate income citizens who file for Earned Income Tax Credits.

Payments would amount to $750 per family or $450 for individuals, and be broken up in two installments.

Hogan says the first round of checks would go out immediately upon being signed into law.

Here's a breakdown of how it works based on your annual income.

The RELIEF Act would address unemployment benefits, by repealing the customary state and local income taxes associated with them.

That would come in addition to $300 million in small business sales tax credits, which could save thousands of businesses up to $12,000 over a four-month period.

If signed into law, the Governor's office said the savings would be automatic.

For example, if you're a business with $100,000 in monthly revenue and you collect $6,000 in sales taxes, you only remit $3,000. Or, if you have $50,000 revenue and you collect $3,000 in sales taxes, you keep it all and wouldn't have to pay it back at any point.

On top of that, the proposed legislation would extend restrictions on sudden and substantial tax hikes that small businesses could see as result of workers filing for unemployment.

READ MORE: Hogan aims to help hurting Marylanders with series of COVID-19 financial initiatives

Additionally, businesses would be protected from any tax increase triggered by the use of state loan or grant funds.

According to Hogan, a majority of funding for the legislation would come from money left over in last year's budget.

Approximately $100 million would also be taken from the state's rainy day fund, which some had hoped would be significantly more.

One of those people is Comptroller Peter Franchot, who in the past has called on Hogan to personally authorize use of rainy day funds to hand out $2,000 checks, without approval from the legislature.

"Maryland families need help now, but instead the Governor is passing the buck to the legislature," Franchot said following Hogan's legislative proposal. "The Governor knows that he has the power to authorize direct cash payments to those in crisis right now. He’s already tapped into the Rainy Day Fund to help small businesses and now he needs to help families survive," claimed Franchot.

Hogan on Monday explained what Franchot wants, is beyond the State of Emergency and his executive powers.

"We took every action that we could take alone. These tax changes and the things that we're talking about that extend beyond the state of emergency, the legislator must pass the legislation. That's why they're in this package, we would've taken these actions already," said Hogan. "I know talk from the Comptroller, about we just send everybody checks, well that's just not the way the law works."

Senate President Bill Ferguson and House Speaker Adrienne Jones released a joint statement following Hogan's announcement emphasizing Democrats plans to help Maryland families, but made no specific commitment to the Governor's requests.

"We thank Governor Hogan for talking with us over the past several months to incorporate our priorities for COVID recovery into his proposal. The members of the General Assembly have spent the interim putting together legislation to fix a broken Unemployment Insurance system, protect essential workers, provide aid to struggling small businesses and greater resources for family members in nursing homes. This Session, Democrats are focused on getting families and small businesses back on their feet; getting students back to school as soon as possible; and ensuring our seniors are safe so 2021 can become the year of rebuilding and recovery. We look forward to the Governor working with us to accomplish these goals and demonstrating for the country what the true value of bipartisanship can be."