Gov. Hogan proposes direct stimulus payments for Marylanders, tax cuts for small businesses
MARYLAND – On Monday, Governor Larry Hogan announced the proposal of the Recovery for the Economy, Livelihoods, Industries and Families or the RELIEF Act of 2021. If passed by Maryland lawmakers, the act would provide more than one-billion-dollars in immediate and targeted financial relief as well as tax cuts for Maryland working families, small businesses and those who have lost their jobs and are suffering financially as a result of the COVID-19 pandemic.
“It is clear to all of us that the primary focus of the 2021 legislative session must be providing additional immediate economic relief to the hundreds of thousands of struggling families and tens of thousands of small businesses that have been impacted by the pandemic,” says Gov. Hogan. “Amid suffering, the last thing we should ever do is raise taxes.”
The proposal includes direct stimulus payments of up to $750 for families and $450 for individuals. The RELIEF Act would also commit another 180-million-dollars in targeted tax relief for Marylanders who have lost their jobs by repealing all state and local income taxes on unemployment benefits.
“This relief will go directly to more than 400,000 Marylanders in need and no application of any kind is necessary,” says Gov. Hogan.
The eligibility for the $750 and $450 payments are tied to Marylanders who have qualified for the Earned Income Tax Credit (EITC) in 2019 and those who would be eligible for it in 2020.
Marylanders would qualify for these payments who annually earn:
- $50,954 ($56,844 married filing jointly) with three or more qualifying children
- $47,440 ($53,330 married filing jointly) with two qualifying children
- $41,756 ($47,646 married filing jointly) with one qualifying child
- $15,820 ($21,710 married filing jointly) with no qualifying children
“This relief begins with immediate payments of $500 for families and $300 for individuals who filed for the Earned Income Tax Credit, followed by a second-round stimulus for EITC filers that would provide an additional $250 for eligible families and $150 for individuals. Similar to federal stimulus payments, no application for relief is necessary.”
“So these are the lowest income Marylanders who get that assistance. It’s in addition to and separate from the additional federal which I think in the coming weeks we’re also going to see that increase,” says Hogan.
Senator Mary Beth Carozza says the amount of stimulus money needed to truly make a difference can be debated all day but she’s optimistic these payments will help people who need it the most. “I can tell you from the thousands of constituents that I’ve heard from in all three of my counties: Wicomico, Worcester and Somerset counties, these are the exact folks that need this assistance.”
The RELIEF Act would also:
- Repeal all state and local income taxes on unemployment benefits
- Provide sales tax credits for small businesses of up to 3-thousand dollars per month for four months
- Change the state’s law when it comes to how unemployment taxes are calculated for small businesses
“All of this targeted relief will help businesses keep their doors open and keep more people on the payroll,” says Gov. Hogan.
Maryland Comptroller Peter Franchot released a statement calling for Governor Larry Hogan to use, “the $1.5 billion in reserves gathering dust in our state’s treasury for $2,000 direct payments to low-income families and more funding for small businesses. The Governor’s plan, regrettably, falls woefully short at not only providing the adequate amount families need, but the speed in which it will be distributed.”
However, the Governor believes that would drain that fund and would be an irresponsible move. “We chose to follow the directions of the spending affordability committee in the legislature and maintaining our rainy day fund, maintaining our AAA bond rating. We want to make sure state government continues to function,” says Gov. Hogan.
As for where the money is coming from, the Governor says much it’s coming from budget actions the state took earlier in the year while some is coming from the reserve fund and a small portion to pay for unemployment is coming from the rainy day fund.
Governor Larry Hogan says this RELIEF Act will be the legislature’s first priority when the 2021 session starts Wednesday. He adds there will likely be some discussions about tweaks but says lawmakers generally agree with most of the things proposed in this act.