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With federal stimulus talks dragging, Md. governor announces $250 million package for small businesses

Maryland Gov. Larry Hogan (R) speaks at a news conference in Annapolis on Oct. 1, 2020.
Maryland Gov. Larry Hogan (R) speaks at a news conference in Annapolis on Oct. 1, 2020. (Brian Witte/AP)

Maryland Gov. Larry Hogan announced $250 million of state cash Thursday to provide grants and some loans to restaurants, small businesses, closed entertainment venues and struggling arts organizations.

As federal stimulus talks drag on in Congress, Hogan (R) announced he would use about half of the state’s budget savings from last year to expand existing programs and fund new ones to help small businesses struggling because of the economic downturn caused by the coronavirus pandemic. The sum roughly doubles what the state already has pumped into similar programs.

“It’s a desperate situation,” Hogan said. “Many businesses . . . they’re hanging on by a thread. They may not make it another month or two.”

Requests for help from Maryland’s small businesses have far outpaced resources — even with about $10 billion of aid from the federal Paycheck Protection Program going to 81,000 businesses in the state, the governor said.

In two weeks in late March and early April, nearly 20,000 small businesses applied for aid through the Maryland Small Business Covid-19 Relief Grant Fund, prompting the state to close the application window and start a waiting list that remains. About 4,000 applications were approved before the state ran out of money.

Hogan put $45 million more into the program in July. He announced Thursday that a new infusion, of $50 million, will clear the backlog of businesses that qualified and had been waiting since spring. It was not clear Thursday whether the state will accept new applications.

The largest share of new funding announced Thursday — $100 million — will go to what Hogan calls the Emergency Rapid Response Fund for Small Businesses. He said the money will be set aside until the administration determines how it can best be used.

If federal aid arrives before the end of the year, the rapid response money might not be used, he said.

Comptroller Peter Franchot (D), a frequent Hogan ally, had been publicly pressuring the governor to spend $500 million on direct aid to small businesses. His spokeswoman Susan O’Brien said Friday that spending “$150 million in relief for tens of thousands of small businesses in Maryland is not nearly enough, and leaving $100 million for an emergency rapid release fund is empty rhetoric.”

A new program will provide $50 million in grants for the state’s roughly 11,500 restaurants, which amounts, on average, to $434 per business. The money will not have to be repaid, and it can be used on a variety of expenses such as expanding outdoor dining, paying rent, upgrading technology to improve carryout business or buying personal protective equipment. Local governments will distribute the money to businesses that qualify and determine how much each will receive.

The state initially had expected enormous budget deficits for the fiscal year that ended June 30 because of pandemic-related shutdowns. But the multibillion-dollar infusion from the first waves of federal help — plus belt-tightening in Maryland’s budget — left the state with $500 million more than expected.

Another existing program that helps small businesses avoid layoffs will be expanded by between $10 million and $30 million, with the money supplementing employee income and financing telework operations so employees can stay on the job.

Smaller initiatives are aimed at keeping hard-hit businesses afloat, including $20 million for local entertainment and “Main Street” small businesses; $5 million in low-interest loans for disadvantaged entrepreneurs; $3 million to arts organization and artists; and $2 million to promote “hometown tourism” by marketing local stores, businesses and attractions.

“We’re hoping these are the right things and that it will be enough, but we really don’t know,” Hogan said, adding that what the state’s economy needs most is a major stimulus package from the federal government.

The governor said contact-tracing data shows that the top source of coronavirus infections continues to be small family gatherings and house parties. He said the state is closely watching a slight uptick in hospitalizations over the past two weeks, urging people to stick to proven strategies of mask-wearing and social distancing.

The greater Washington region on Thursday recorded 2,114 new coronavirus cases and 21 additional deaths. Virginia added 1,332 cases and nine deaths, Maryland added 743 cases and 12 deaths, and D.C. added 39 cases and no deaths.

Coronavirus cases and metrics in D.C., Maryland and Virginia

Thursday’s caseload was the highest in a single day across the region since Oct. 8, when 2,673 infections were announced, fueled by a one-day reporting issue in Virginia.

Despite the daily increase, the regional rolling seven-day average of new infections stood at 1,709 cases, holding mostly steady for more than a week. Maryland’s daily average has risen through October, standing Thursday at 633 cases — the state’s highest since Sept. 17.

The pandemic’s economic fallout was evident Thursday, when figures from the U.S. Labor Department showed 25,669 new unemployment claims were filed last week in D.C., Maryland and Virginia. That was up slightly from the 23,369 claims filed a week earlier.

Dana Hedgpeth contributed to this report.

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Coronavirus news in D.C., Virginia and Maryland

The latest: More than two years into the pandemic, covid cases in the D.C. region are rising again, , while liberal Montgomery County asks who deserves credit for its robust covid response. Meanwhile, Black funeral directors still face a daunting amount of deaths from covid and the omicron wave has had an unequal toll in the DMV.

At-home tests: Here’s how to use at-home covid tests, where to find them and how they differ from PCR tests.

Mapping the spread: Tens of thousands have died in the local region and nationwide cases number in the hundreds of thousands.

Omicron: Remaining covid restrictions in the D.C.-area, plus a breakdown of variant symptoms and mask recommendations.

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