Gov. Larry Hogan gave some welcome news to businesses during last Thursday’s press conference. More than likely most business owners who had to downsize through employee layoffs this year have not thought a lot about unemployment rates or paying back a loan from the state.
Many businesses laid off employees in the spring to offset severe reductions in operations. The consequence for this contraction would come next month when the state administers a tax on each employee’s wages up to $8,500. The business pays this tax and the taxable rate depends on the company’s experience rating, which is calculated through a formula involving chargeable benefits. Hogan’s announcement last year excludes 2020 from being used in that three-year experience rating calculation, resulting in businesses seeing their rating staying flat from last year. If this was not authorized last week, many Maryland businesses would face significant increases in tax liabilities in what is expected to be a disastrous first quarter for most operators. It’s welcome news from the governor, albeit I’m assuming this was not on the minds of many business owners. I know I hadn’t thought about it a lot.
The second announcement rolls the emergency loans doled out by the state last spring into a grant. Back in the spring Hogan announced a grant and loan program for businesses. Within weeks, the grant program dried up because the state was fast in expending $10,000 funding injections to businesses. While the loan program took longer to give out finds, hundreds of businesses in Maryland received flat $10,000 or more loans, which were 0% for the first year and 2% for the next 36 months. The loans were impressive because they were easy to apply and receive and were given with no accountability needed. They were for operation purposes only. Similar to the unemployment announcement, this is a welcomed move but one most likely not on the minds of business operators since the interest didn’t get in until next year (one year after loan issuance).
In these two cases, the governor did Maryland businesses a major solid and should be commended for it.
The fallout of an Anne Arundel County judge’s temporary restraining order blocking the county executive’s ban on limited indoor and outdoor dining should be followed.
Anne Arundel County Executive Steuart Pittman’s ban was set to take effect this week, but the restaurants and bars in Anne Arundel got a stay and will remain open on a limited basis with capacity restrictions until at least Dec. 28 when a final hearing in the case is set.
“The restrictions on the plaintiffs’ businesses were applied in an inconsistent manner from other businesses that contribute significantly to COVID contact sources,” Anne Arundel County Circuit Court Judge William Mumford II wrote in his opinion. “In other words, there appears at this stage to be an arbitrary and capricious application of restrictions to the plaintiff’s businesses when compared to other business activities.”
Currently, most restaurants in Worcester County and around the state are limited to 50% capacity, socially-distanced tables, a 10 p.m. closing time and mask requirements for employees and guests, among other things. Local jurisdictions must, at the very least, follow the governor’s directives, but can make policies and issue order that are more stringent. Such was the case in Anne Arundel County, and in Baltimore City, where a ban on indoor and outdoor dining has been applied.
In a statement after the ruling, Pittman said, “We believe the science from public health experts is clear and it shows that taking actions to limit situations where people gather without masks will prevent the spread of this virus and ultimately save lives. We look forward to a full hearing on the merits of the case.”
When asked about potential further restrictions last week, Hogan said the state was carefully watching the metrics, but more restrictions on restaurants and bars were not immediately in the offing. In fact, Hogan said the state’s contact tracing data indicated family gatherings were the largest generators of new cases and restaurants and bars were somewhere near fifth on the list.
Locally, the Anne Arundel decision on Wednesday was met with relief. Ocean City Hotel-Motel-Restaurant Association Executive Director Susan Jones said on Thursday she and her other colleagues around the state were closely watching the Anne Arundel case unfold.
“I was pleased to learn of the judge blocking the ruling in Anne Arundel County and hope that other jurisdictions follow suit,” she said. “I’ve talked extensively with the president of the Restaurant Association of Maryland over the last few months and we’ve always believed that restaurants are being unfairly targeted.”
Jones agreed with Hogan the contact tracing data does not suggest restaurants and bars, operating at limited capacities while following all of the existing state directives, were not a clearly identified source of spreading the coronavirus.
“All around the nation, contact tracing is pointing to large gatherings in homes as a source,” she said. “Restaurants have always been super compliant from the beginning and done everything possible to keep employees and customers safe.”