The scene on Main Street America is bleak. In urban and rural areas, shuttered storefronts have become an all-too-familiar sight. Maryland is no exception. From my hometown in Takoma Park to beautiful Severna Park, businesses are hanging on for dear life.
Since the coronavirus pandemic wreaked havoc on our nation, I’ve talked to owners of restaurants, retail shops, manufacturing plants and arts and cultural centers. They’ve pivoted their business models and adapted to ever-changing rules to ensure customer safety. For example, I know people who ordered weekly groceries or ready-to-go lunchbox meals from Garry’s Grill to help this favorite local restaurant keep the lights on and their employees paid.
Entrepreneurs are finding new ways to pitch products and curbside pickup is now the norm – especially at places like The Cottage and Park Home. Restaurants like La Posta Pizzeria and Park Tavern created outdoor dining spaces and pray for good weather so they can continue to serve outside. It’s still possible to enjoy the Chesapeake Bay’s bounty by ordering a crab pretzel at Severna Park Taphouse or a succulent crab cake from Sullivan’s Cove. Restaurants are increasing delivery options, complete with to-go cocktails and other alcoholic beverages, often the largest source of profit in a world with razor-thin profit margins. I think the margheritas to go from Vida Taco Bar single-handedly saved the restaurant!
These hardworking small businesses seldom ask for assistance from government, but now they’re crying out for help. For the sake of our economy and communities, we must respond immediately. In Maryland, we are fortunate to be in a strong fiscal position to offer small businesses — the heart and soul of our state’s economy — a lifeline.
We ended fiscal year 2020 with a $586 million fund balance, thanks in part to our federal jobs, as well as the federal stimulus and expanded unemployment programs, which helped stave off economic disaster. We should put this fund balance toward a small-business relief and rescue program immediately.
Simply put, in the absence of state support, more businesses will shut down, taking with them thousands of jobs, direct and indirect economic benefits and community investments. Imagine a Severna Park without Jeno’s Steaks or Donut Shack.
You might be asking, isn’t this the same Peter Franchot who has pushed to squirrel away as much money as possible to weather future economic uncertainties?
Maryland has $1.2 billion in its Rainy Day Fund, and I’m certainly not advocating we drain that account. It might be needed to fund our most critical needs, to protect our most vulnerable citizens and to stabilize our economy.
The fact is, we’re still facing significant revenue shortfalls over the next several years, so we must brace for the likelihood that the worst may be yet to come. But if we don’t help our businesses now, we might wake up on the other side of this pandemic with Main Street as a ghost town.
Even the country’s best economists cannot predict how the pandemic will affect the labor market and spending patterns. The uncertainty of what lies ahead, when flu season collides with the coronavirus, leaves us staring into a potential economic abyss.
There is a lot we don’t know, which is what makes revenue forecasting such a difficult endeavor.
We don’t know whether a surge of the coronavirus would trigger a second economic shutdown. We don’t know how much longer small businesses can hang on with shrunken profits. We don’t know how political events might unfold and impact the economy for better or worse.
What we do know, and what the numbers show, is the influx of federal aid in the form of loans to businesses, stimulus payments to citizens and enhanced unemployment have helped prevent, at least for the time being, an economic catastrophe.
Without that direct and rapid injection of funds to consumers and small businesses, we’d be in far worse shape. I’m confident that another much-needed stimulus will work as we head into the unpredictable fall and winter months.
What I’m not confident about is the ability of Congress to put down the partisan swords and pass a second stimulus package anytime soon. President Trump has done little to show he can broker or is even interested in brokering such an agreement.
As such, states must act on their own.
Leaders in Maryland should not hesitate to take the $586 million fund balance and invest it in the small businesses that fuel our tax base, employ our neighbors and support our communities.
If Maryland Governor Larry Hogan and the General Assembly could approve $8.5 billion in taxpayer incentives to lure Amazon’s second headquarters to our state — an ultimately unsuccessful endeavor that I supported — we can certainly spend about 7 percent of that to save thousands of Maryland’s small businesses.
We have the means to take action. We must not let this opportunity pass. We need to help our beloved local businesses now.