ANNAPOLIS, Md. (WJZ) — The latest projections for Maryland’s budget for fiscal year 2020 show the coronavirus having a significant impact, but the state’s shortfall may not be as big as originally thought.
On Thursday, state officials heard two possible scenarios for the end of the fiscal year, one of which included more federal aid.READ MORE: Maryland Dept. Of Health Website Operational After Cyberattack
The scenario without additional federal aid would leave Maryland with a $1.1 billion shortfall by June 30 when the fiscal year ends. By the end of fiscal year 2021, that shortfall would become $2.6 billion and could reach $4 billion by fiscal year 2022, Andrew Schaufele, the director of the Bureau of Revenue Estimates, said Thursday.
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The more optimistic scenario would see Maryland having a $925 million shortfall for fiscal year 2020, climbing to $2.1 billion for the following fiscal year and reaching $2.6 billion in fiscal year 2022.
Comptroller Peter Franchot said the state expects to revise the numbers more frequently given the uncertainty brought on by COVID-19.
“As Mr. Schaufele’s analysis amplifies, what we are experiencing is a snapshot of an economic nightmare. These revenue figures, along with the number of unemployed Marylanders and businesses on the verge of closing their doors
permanently, are unprecedented in their scope and magnitude,” Franchot said.
In mid-April, Franchot said the state could see a shortfall of $2.8 billion by the end of the current fiscal year.
Officials credited the Paycheck Protection Program and businesses keeping employees on their payrolls for as long as possible with dampening the impact.
Still, Franchot warned that without a vaccine on the horizon, things could change significantly in the months to come.READ MORE: Pending Regulatory Approval, Sportsbook At Horseshoe Casino Could Open Friday
“What is very clear, however, is that we could end up in a much worse situation, because it assumes two things: that we have a vaccine, and that we don’t have to endure another closure of the American economy,” he said. “If the latter happens and the former doesn’t, we could end up in a situation that is far worse than either of these scenarios are projecting.”
The prospect of more federal funding is uncertain.
On Friday, the Democratic-controlled House of Representatives passed the $3 trillion Health and Economic Recovery Omnibus Emergency Solutions Act, which includes funds for state and local governments, CBS News reported. The bill is not likely to gain support in the Republican-controlled Senate.
Two days prior, Gov. Larry Hogan, the chair of the National Governors Association, renewed a call for $500 billion in federal funding to ease states’ coronavirus-related financial burdens.
Hogan, a Republican, and New York Gov. Andrew Cuomo, a Democrat and the group’s vice-chair, issued a joint statement calling for bipartisanship.
“With widespread bipartisan agreement on the need for this assistance, we cannot afford a partisan process that turns this urgent relief into another political football. This is not a red state or blue state crisis. This is a red white and blue pandemic. The coronavirus is apolitical. It does not attack Democrats or Republicans. It attacks Americans,” they said.
Earlier this month, President Donald Trump characterized the idea of increasing federal aid as a bailout for “poorly run States.”
Well run States should not be bailing out poorly run States, using CoronaVirus as the excuse! The elimination of Sanctuary Cities, Payroll Taxes, and perhaps Capital Gains Taxes, must be put on the table. Also lawsuit indemnification & business deductions for restaurants & ent.
— Donald J. Trump (@realDonaldTrump) May 5, 2020
“Well run States should not be bailing out poorly run States, using CoronaVirus as the excuse!” he tweeted May 5.MORE NEWS: Man Accused Of Killing Evelyn Player Was Working In Her Church, Attorney Says; Will Plead Not Criminally Responsible