Gov. Larry Hogan said Friday that he has ordered the state to institute an immediate budget and hiring freeze. Hogan said he made the decision in response to the announcement that the state is projected to lose as much as $2.8 billion in estimated revenue for the 2020 fiscal year ending July 1 due to business shutdowns aimed at preventing the spread of the coronavirus.
The director of the state’s Bureau of Revenue Estimates, Andrew Schaufele, made the announcement during a virtual press briefing on Friday morning. He was accompanied by Maryland Comptroller Peter Franchot.
“This would represent a fifty percent decrease in revenues over the next 90 days and up to a fifteen percent reduction in revenues for the fiscal year, which ends on July 1,” Hogan said at an afternoon news conference at the State House in Annapolis.
“At my direction, the state is immediately instituting a budget freeze on all state spending across all state government agencies,” Hogan said. “The exceptions are COVID-19-related expenses and payroll necessary to support our employees.
“The State of Maryland is also instituting a hiring freeze effective immediately. The Maryland Department of Budget and Management will be determining options and making recommendations for budget cuts, which will be required in all state agencies. This will include cuts to so-called mandated spending.”
Hogan said that many of the 679 pieces of legislation passed by the General Assembly during the 2020 legislative session call for “substantial increases in state spending.” The governor said he is “very unlikely” to sign any legislation that would increase state spending. He said it is even possible that the state may need to spend all of the money in the rainy day fund to address the crisis. The rainy day fund consists of money set aside for unpredictable events.
Senate President Bill Ferguson pointed out that the legislature allocated several funding streams that can be used to address the crisis.
“It is too early to know with certainty whether these funds will be insufficient to cover the costs associated with Maryland’s appropriate and timely response to COVID-19’s spread in our State,” he said in a statement. “Regardless, it’s clear that hard choices are ahead.”
Hogan the state is making progress in processing the record number of unemployment claims that have been filed during the past month but acknowledged that there is considerable room for improvement. “Even one unemployed Marylander not being able to be handled is completely unacceptable to me,” Hogan said. The governor said he has “activated the full weight of the state government to assist the Department of Labor in ensuring that all unemployed Marylanders” regardless of how or when they file, “will receive every single penny that they’re entitled to as quickly as is possible.”
Hogan said that today he issued a proclamation that ratifies a decision by the State Board of Elections to hold the June 2 primary election by mail but to allow in-person voting for those who are unable to vote by mail. The elections were previously scheduled for April 28. Three weeks ago Hogan announced that the elections would be postponed due to concerns about the spread of the virus. Hogan stressed the importance of social distancing for those who would vote in person.
“We are joining them in strongly urging every Marylander who can vote by mail to cast their ballot by mail. We understand there are a small number of exceptions — including individuals without a fixed address and voters with special needs. We want to stress that in these rare cases, where people must vote in person, significant social distancing practices must be implemented by the state and local election board officials.”
Labor Secretary Tiffany Robinson sought to reassure Marylanders who are having trouble filing unemployment claims due to excessive call volumes and online difficulties.
“Right now I can assure you that we are all hands on deck to provide Marylanders with the financial support that they need.”
The department has made of several changes to expedite the claims process such as “adding additional servers,” Robinson said. She urged Marylanders to file claims during “off hours” such as “early in the morning and late at night.” She noted that the department has increased the time window for filing and that claims can now be filed from 7 a.m. to 6 p.m. EDT Monday-Friday. Robinson said the after the holiday weekend, the department will expand the window even further to allow claimants to file on Saturday as well.
Robinson said the department is working to address staffing shortages.
“We’re also in the process of ramping up the size of our unemployment insurance team by temporarily reassigning over 150 state employees and hiring additional contractual employees. We’re in the process of more than doubling our claims center staffing.”
There are 6,968 confirmed cases of coronavirus in Maryland as of Friday morning, Hogan said, and 171 people in Maryland have died from COVID-19 in the past three weeks. He said 1,414 people have been hospitalized with the virus and 397 of them have recovered.