Hogan Proposes $1B In Tax Cuts, Aid Days Before Lawmakers Return

Jacob Baumgart
Updated ·3 min read
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ANNAPOLIS, MD — With Marylanders still battling the economic effects of the coronavirus pandemic, Gov. Larry Hogan remains focused on aid. On Monday, he announced a bill that would cut taxes and offer direct relief to struggling residents and businesses.

The proposal, if passed, would deliver about $1 billion in stimulus. Here's a breakdown of how the plan works:

$300 million in sales tax savings

  • Small businesses and eateries could keep up to $12,000 that they would've paid in sales tax

  • This offer would last for four months

$267 million in direct payments

  • Families that receive an Earned Income Tax Credit would get a $750 check

  • Individuals that get the credit would collect $450

  • This would help 400,000 Marylanders

  • The money would be sent automatically to qualifying residents. No application is necessary.

$218 million saved in taxes on small business

  • Sudden hikes in unemployment taxes on small businesses would be prohibited for all of 2021

  • Hogan delivered a similar mandate in an executive order last month

  • If passed, the bill would make this a law

$180 million saved in unemployment taxes

  • State and local income taxes on unemployment insurance would be repealed

  • This would allow Marylanders to take home larger unemployment checks

$40 million saved in taxes on awards

  • Winning a state loan or grant would no longer warrant a tax hike

This money would only be available if the bill is signed into law. Maryland's legislative session, or lawmaking period, starts Wednesday and lasts until April 12. Hogan's team will introduce the legislation on the first day of session, urging legislators to pass it immediately.

"I cannot imagine anything that could possibly be more important for the legislature to pass," the governor said at a press conference. "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 that suffer."

The bill, if passed, would bring Maryland's total economic relief contribution to about $1.7 billion. Hogan has previously dedicated $700 million through executive orders and disbursements of federal funding. Those actions sent:

  • $220 million to grants and forgivable loans

  • $108 million to emergency tax relief

  • $90 million to rental relief

  • $80 million to bars and restaurants

  • $50 million to the hospitality industry

  • $40 million to health care providers

  • $35 million to entertainment venues

  • $30 million to the COVID-19 Layoff Aversion Fund

  • $20 million to food banks

  • $10 million to low-interest loans for small and minority-owned businesses

  • $10 million to farmers, watermen and food producers

  • $7 million to local arts organizations

Most of these moves came after the U.S. Congress passed the Coronavirus Aid, Relief, and Economic Security Act in March. Since then, Hogan has pleaded for more federal stimulus.

After months of debate, Congress passed a second round of aid in late December, sending $600 to American adults. This fresh batch of relief will help Marylanders with:

  • $10 billion in paycheck protection

  • $7 billion in business assistance

  • $4 billion in individual aid

Though Hogan is pleased with the federal action, he wishes it would have come sooner. The governor hopes the Maryland General Assembly acts quicker, passing his aid plan immediately.

"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," Hogan said.

The governor said he would fund his plan using:

  • Money saved from budget cuts made in 2020

  • Savings in the state's reserves

  • $1oo million from the Rainy Day Fund

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Have a story idea? Please contact me at jacob.baumgart@patch.com with any pitches, tips or questions. Follow me on Twitter @JacobBaumgart and on Facebook @JacobBaumgartJournalist to stay up-to-date with the latest Anne Arundel County and Prince George's County news.

This article originally appeared on the Annapolis Patch