Franchot Calls for Small Business Grants
Maryland Comptroller Peter V.R. Franchot apologized for a lack of good news during a webinar last week on the state and regional economy. But there are good times ahead, he also said during the program sponsored by The Patuxent Partnership and St. Mary’s County Chamber of Commerce. And some of his parting advice included ordering a margarita with your next carry-out.
The best news is the solvency of state coffers, but the next “12 to 18 months are going to be tough sledding,” he told attendees. “We need a second stimulus.”
He admitted initial skepticism of the $2.2 trillion the federal government pumped into the national economy in late March to staunch the economic fallout of the COVID-19 pandemic. “It is an unearthly amount.” He described a line of dollar bills running from Earth, to the sun, around the sun, and back as representing the volume of money involved.
“I was skeptical,” he said, describing himself as “tight with a dollar,” but he has become a fan of “spending money in tough times.”
“It did work,” he said of the huge stimulus package the government passed in March. “We need a second one. No matter your politics or persuasion. I’m tight with a dollar. But this did stimulate the economy.”
The stimulus and Maryland jobs in the top of the K economy kept the state fiscally sound. “Tech is doing well, getting paid well,” which, along with the stimulus during the year’s previous quarters, allowed Maryland’s income withholding revenues to hold steady. However, without a second stimulus, the economy at the bottom of the K will deteriorate, more small businesses will close, and that carries a severe domino effect.
Already “1.1 million Marylanders have filed for unemployment for the first time in their working careers. This is devastating to me.”
Maryland’s strong economic health includes a $586 million rainy day fund that Mr. Franchot is urging Gov. Larry Hogan to tap for $10,000 to $15,000 grants to small businesses.
“Public budgets are going to survive,” he told the webinar attendees. “They should be a lower priority than small businesses. … If we wait until December, January for the [state] legislature to come back, it will be too late.”
“Already we have lost 40 percent of our restaurants, closed permanently.” The restaurant and hospitality sector has 400,000 unemployed.
Bonnie Green, executive director of The Patuxent Partnership, asked Mr. Franchot to elaborate on his piece in The Washington Post, “We can’t let Main Street become a Ghost Town” where he argues small businesses must become the top priority in the recovery.
Small businesses need help now, as a medical solution is being sought for the COVID-19 virus. And they are going to need support afterward during the years of rebuilding. “Replacing a small business is so much more difficult than giving a little bit to tide us over.” Meanwhile, he cautions, noting that at 72 he is among the vulnerable, “Do not fool around with this virus. A medical solution is all important. Anyone who has had a brush with it will tell you, ‘Don’t let your guard down.'”
But he also said, “Better days are down the road.”
When the medical solution is in place, and travel restrictions lift, he expects many folks will also have the cash to travel, and more. Banks are reporting the largest checking balances in their histories. “It’s a God awful amount of money,” he said. “We don’t have anywhere to spend it.”
This only applies, however, to those in the top of the K economy who are not spending in shops, restaurants, bars, and gas stations, where a lot of the folks in the bottom of the K economy work. And many of these businesses where money is not being spent are the small businesses needing help to remain open. So, even in these better days ahead, many small businesses will already be gone. “Small businesses are the victims of this pandemic,” he said.
Scott Sanders, owner of Tobacco Barn Distillery, and an attendee, concurred noting that 84% of a small business’ income goes to other local and Maryland firms. “Spending local helps everybody.”
Also harmed are the nonprofits, said Nancy Easterling of Historic Sotterley and was backed up by Chris Kaselemis of the St. Mary’s County Department of Economic Development. Ms. Easterling said it is possible a third of nonprofits will have to close as a result of the loss of revenue.
Gary Kessler, president of Southern Maryland Navy Alliance and TPP board member, provided a perspective on how Naval Air Station Patuxent River is navigating the pandemic . He praised the “good headway made in teleworking” and effective safety protocols adopted for activities that cannot be accomplished remotely, such as work in testing and evaluation labs.
While “programs are impacted,” he said, ” the success of the base’s approach shows in a “community not testing positive.”
Del. Brian Crosby, also attending the webinar, concurred with Comptroller Franchot’s assessment of “rightly recognizing the people struggling the most. Small businesses did nothing to inflict this upon themselves.” Giving a shout-out to some Lexington Park eateries in his 29B District, Del. Crosby chimed in with earlier advice from Mr. Franchot about buying gift cards at neighborhood eateries “such as Showtime Deli, Linda’s Cafe, owned by local people.”
And it was this that brought the comptroller to the margarita. Upon learning that his favorite Mexican restaurant, where he now orders carry-out, clears a great deal more on liquor than food , he championed an emergency order through the state permitting the carry-out of drinks and curbside delivery to residences.
“We’re a wealthy state. Let’s not act as if we can’t come out of this,” Mr. Franchot said. “The state is going to win the economy in Maryland. We’re going to be much more welcoming to entrepreneurs. We are a state of many assets.
“Keep your elbows up,” the comptroller said in signing off, “and stay safe.”
About The Patuxent Partnership
The Patuxent Partnership is a nonprofit member organization that fosters collaboration between government, industry, and academia to advance education through STEM-based initiatives; to advance technology through speaker programs, forums, and networking; to advance science and technology transfer through the exchange of ideas, information, and data related to technologies; and to increase workforce development through an array of initiatives.
To learn more about The Patuxent Partnership and its programs, visit its Leader member page.
