CUMBERLAND — Maryland Comptroller Peter Franchot would like to see $586 million accumulated in the state's general fund used as stimulus money for small businesses struggling due to the COVID-19 pandemic.
Franchot's remarks came after fiscal year-end budget numbers were published for 2020. The state's fiscal year runs from July 1 to June 30 annually.
The latest numbers, included in a press release from the comptroller's office, show a balance of $18.6 billion in the general fund which is a 2.4%, or $435 million increase, over fiscal 2019.
Although the gain did fall short of Maryland Board of Revenue Estimates by $102 million, the added positive funding is good news for Marylanders.
The $586 million increase represents less than 1.2% of the state's 2020 operating budget of $47.3 billion. The fiscal 2020 closeout numbers show the $586 million is unassigned fund balance, meaning it is not committed to any specific purpose.
Franchot said in a Times-News interview, the increase, "came largely from the income withholding area ... because a lot of people were laid off by their employers beginning in February and March."
More than 1.1 million Marylanders have filed for unemployment since March.
"A lot were laid off, but about 70% of small businesses benefited from the federal relief plan which essentially paid the salaries and wages of the small business employees. It originally was a loan but it was turned into a grant," Franchot said.
"So we had billions come in from the first stimulus plan," Franchot said. "That money was income withheld for income tax."
In addition to the $586 million in unassigned funds, the state also has a Rainy Day Fund containing $1.2 billion. Franchot said the unassigned funds and portions of the Rainy Day Fund should be used as direct stimulus to the state's struggling small businesses.
“The governor and the General Assembly will have to come together, in a bipartisan manner, to solve the fiscal crisis that we are experiencing," Franchot said. "We could spend (the $586 million) on small business relief without going into the Rainy Day Fund. But, if I were governor, I would spend the $586 (million) and some of the Rainy Day Fund.
"I think Governor Hogan should call the Senate president and the speaker say this is what we want to do," the comptroller said. "I think it is a proper expenditure instead of paying a lot more down the road. Spending now is better than waiting and dealing with closed small businesses all over the place. Not that there aren't a lot all ready, but we could have a lot more if we don't act."
Franchot said local chambers of commerce, economic development staff, credit unions and banks could help identify small businesses that are, "hanging on by a thread."
"The state needs to literally go up and down the street writing checks to those people," Franchot said. "It's not a panacea — it might only be $15,000 — but to those business barely squeaking by, it's a lot of money. It is also a pat on the back from the state saying, 'thank you ... you've been loyal to us and we are going to be loyal to you when the chips are down.'"
Franchot said a second federal stimulus package is needed.
"The federal government certainly should do it," Franchot said. "The first stimulus package was proven to be successful. A second would include, ideally, the states because their budgets have holes in it. We don't want to see down the road our public employees that are essential like first responders, etcetera, laid off.
Follow staff writer Greg Larry on Twitter @GregLarryCTN.