Alarmed at the prospect that needy families will be hurt by Gov. Lawrence J. Hogan Jr.’s decision to end supplemental unemployment benefits in early July, members of the General Assembly scrambled on Wednesday to blunt — and perhaps block — his action.
Legislative leaders sought advice from Attorney General Brian E. Frosh (D) about a possible special session — and a powerful committee chairman said he will introduce legislation to advance the effective date of Maryland’s $15-per-hour minimum wage law.
The flurry of activity was set in motion by Hogan’s decision to end the $300-per-week supplemental unemployment insurance benefit that some Marylanders have been collecting, effective July 3.
The state will also stop providing a $100-per-week payment that “mixed earners” — typically gig workers who have multiple sources of wage income — have been receiving.
In addition, people who have been out of work for more than 26 weeks will see their benefits end.
Congress approved enhanced payments last year in response to the COVID-19 pandemic.
In announcing his actions, Hogan pointed to the state’s improving economy and the surge in the state’s supply of vaccines. Even though 70% of adults have received at least one dose of a COVID-19 vaccine, the governor said many employers are having trouble finding workers.
Two dozen Republican governors have taken similar steps, with many arguing that jobless benefits create a disincentive to seek work.
More than 175,000 Marylanders receiving Pandemic Unemployment Assistance — which expanded eligibility to the self-employed, independent contractors and gig workers — and those receiving payments after extended periods out of work — more than 86,000 people as of May 8 — would lose benefits entirely under Hogan’s action.
All Marylanders receiving unemployment would stop receiving an enhanced $300 payment. As of May 15, there were 42,895 continued unemployment claims in the state; an additional 8,625 new claims were filed in the week ending May 22.
In a letter to Hogan, Senate President Bill Ferguson (D-Baltimore City) and Unemployment Insurance Oversight Committee co-chairwoman Kathy Klausmeier (D-Baltimore County) wrote, “Solving problems requires more than buying into partisan narratives that ignore the very real plight of countless Marylanders facing complex futures.”
The lawmakers urged the governor to reconsider his actions and look at ways to incentivize people back into the labor force, such as those adopted by Colorado.
If Hogan fails to alter his position on supplemental unemployment benefits, the leaders wrote, ”our chamber will be forced to consider all other tools at our disposal to ensure our state’s prosperity.”
The fiscal year 2022 budget was approved by the General Assembly earlier this year — and lawmakers were unclear on Wednesday whether they have the power to force Hogan to reverse his stance. Lawmakers adjourned in April and are not scheduled to return to Annapolis until January.
Comptroller Peter V.R. Franchot (D) urged lawmakers to consider an emergency special session to insist that Hogan keep the payments flowing.
In an interview, Frosh said it would be a challenge for lawmakers to find a way to block Hogan immediately.
“It’s going to be tough to get it done right away, but it may be possible,” he said. “We’ll see.”
A former legislator from Montgomery County, Frosh hammered Hogan for ending federally-funded benefits at a time when many out-of-work residents have yet to find new jobs.
“The fact is, if you’re looking to help the economy and help businesses, the best thing you can do is put money in the hands of low-income families, because it goes right back out the door,” he said. “They spend it.”
Frosh called the supplemental payments “a lifeline for folks who are unemployed” — and he said GOP claims that benefits discourage job-seeking are “fallacious.”
Although the unemployment rate has dropped since the height of the pandemic, the attorney general said many jobs don’t pay enough for people to make ends meet, a claim echoed by Del. Dereck E. Davis (D-Prince George’s), the chairman of the Economic Matters Committee.
Davis told Maryland Matters he will introduce legislation in January to move up the effective date of Maryland’s $15-an-hour minimum wage law by 2 1/2 years.
Under his proposal, employers with 15 or more workers would be required to pay at least $15/hour effective on July 1, 2022, instead of January 1, 2025.
Employers with fewer than 15 employees would have to boost pay starting on July 1, 2023, instead of January 1, 2026.
“I don’t think we need to take away the benefits. I think we need to increase the wages,” Davis said. “It’s simple economics.”
Davis said he was motivated to offer the legislation in response to Hogan’s actions on Tuesday.
Legislative Black Caucus Chairman Darryl Barnes (D-Prince George’s) will co-sponsor the measure, which has the support of Speaker Adrienne A. Jones (D-Baltimore County).
“If this is strictly dollars and cents, what that tells me is that they’re not paying enough,” Davis said.
Senate Minority Leader Bryan W. Simonaire (R-Anne Arundel) said Davis’s proposal buttresses his belief that the General Assembly is lurching to the left.
“It’s a constant attack on small business, without the balance,” he said. “This is just another way they can redistribute wealth. … Thank God we have Hogan in office to provide a little balance to the legislature.”
Davis said he will pre-file his bill — and he intends to hold a hearing on it at 2 p.m. on the first day of the 2022 session.
The state’s top fiscal officers also hammered Hogan for ending supplemental benefits.
Treasurer Nancy K. Kopp (D) said the move will cause the most harm to single women with children or older dependents, who will now live in “greater misery.”
Franchot, a candidate for governor, noted that the supplemental federal benefits are set to expire on Sept. 6. He said pandemic-era stimulus payments to individuals and businesses have helped the state’s economy weather the pandemic because they are “economic multipliers.”
“We’re giving up, voluntarily, $1.5 billion in additional economic stimulus,” he said. “And it’s not even our money. It’s coming from Washington.”
“This is about compassion for those who are suffering through no fault of their own,” Franchot added. “The end of the pandemic is in sight. We owe them a bridge to it.”
Del. Kathy Szeliga (R-Baltimore and Harford counties) applauded Hogan’s action.
“With so many businesses unable to fully operate because they cannot find workers, it makes sense,” she said. “There are ‘help wanted’ signs everywhere. Americans are logical. If you pay them to stay home, they will. It’s time to get people back in the labor market and working for a brighter future for themselves and their families.”
An organization representing small business owners also said it welcomed Hogan’s decision.
“Small business owners have been among the hardest hit by the COVID-19 crisis. While they are seeing their sales grow amidst a steady economic recovery, a record 44% of owners reported job openings that could not be filled in NFIB’s latest jobs report,” said Mike O’Halloran, the head of NFIB-Maryland.
“The Governor is right to call this a ‘critical problem.’ Now that capacity restrictions and closings are behind us, we’re hopeful these jobs will quickly be filled as the summer is unofficially underway.”
Even if lawmakers don’t return to Annapolis, they hope to pressure him to allow benefits to flow an additional month — until early August — to give jobless Marylanders more time to find work.
“It’s not like he’s saving the state money by doing this,” Montgomery County Executive Marc B. Elrich (D) said.
Late on Wednesday, the nine Democratic members of Maryland’s congressional delegation issued a statement urging Hogan to reconsider cutting off the benefits.
“…The governor unnecessarily bowed to partisan pressure and ignored the needs of struggling workers and families. We urge the governor to reconsider this decision, which will cost our state money in the long run — and wastes federal resources we fought hard to secure,” the lawmakers wrote. “Marylanders are anxious to get back to work, but this pandemic is not over and many unemployed Marylanders are still suffering.”
By Bruce DePuyt and Danielle E. Gaines