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Anne Arundel Chamber: Hogan’s “Relief Act” helps offer bridge to other side of pandemic economy

Updated: Oct 1, 2021

Anne Arundel Chamber of Commerce CEO Mark Kleinschmidt said in an interview Tuesday that Maryland governor Larry Hogan’s proposed $1 billion Relief Act of 2021 could act as a bridge, helping local businesses past their current struggle, to a better economy later this year.

The proposed relief bill, included in the governor’s proposed budget includes at least five initiatives which seek to move business and the public past the worst of the pandemic. They include:

*Direct stimulus payments for low-to-moderate income Marylanders not requiring an application that would aid over 400,000 Maryland residents. The payments would include benefits of up to $750 for families, and $450 for individuals who filed for the Earned Income Tax Credit (EITC) when filing their taxes. A second-round of state stimulus for EITC filers would provide an additional $250 for eligible families and $150 for individuals.

*A repeal of all state and local income taxes on unemployment benefits

*A sales tax credit to 55,000 Maryland small businesses of up to $3,000 per month for four months— for a total of up to $12,000, intended to free-up much needed resources to protect payrolls and sustain operations.

*An extension of unemployment tax relief for small business, which would seek to prevent substantial tax hikes in 2021, codifying an emergency order the governor issued last month.

*A restriction against any tax increase triggered by the use of state loan or grant funds.

Hogan press conference, 1/19/21

“This economic recovery budget and the Relief Act of 2021, with all of its immediate tax and stimulus relief, are far and away the most important things that the legislature must address right now,” Hogan said in a statement yesterday.

A bridge to recovery


Kleinschmidt said he believed such measures by the state, along with help from the federal government as well as Anne Arundel County, would likely provide a way to help area businesses to continue operating until a hoped for economic recovery arrives later this year.

“It’s not going to be a solution, but it’s a bridge that will help a lot of struggling businesses and consumers get through this pandemic,” he said.

“You see all levels of government trying to do something. Most economists predict things will pick up in the latter part of 2021. Any financial help to individual businesses prior to that is very welcome.”

He believes a long-term local recovery from a pandemic-induced economic downturn will depend on the distribution and application of the coronavirus vaccine. Whether the public gets the shot or not may also determine their willingness to get out, go shopping, and loosen their purse strings.

“There’s a lot of pent-up demand,” he said. “The rebound will get get back to where we were (in 2019). The hope is we’ll get back to that level. A lot of that is related to consumer confidence, which is definitely related to immunization, and a large percentage of the population being immunized.”

He believes that might happen by the latter half of 2021.

The chamber’s CEO also noted Governor Hogan’s proposed sales tax credit may have the effect of giving small business owners the options of increasing profits through the credit, lowering prices to stimulate customer traffic, or a combination of both.

“It’s something to stimulate additional business—create a bridge and get through to the other side, but also create some incentive for people to get out and do some business,” Kleinschmidt said.

The federal government’s second round of the Paycheck Protection Program (PPP), which opened fully to applications by businesses on January 19, would also have a significant positive impact on the health of local small business, Kleinschmidt said.

“There’s much more emphasis on the second round of PPP to target small business,” he noted. “And there’s also a provision in there that restaurants can access a little bit more money.”

He said the PPP requires 60 percent of the funds used by a business go toward supplementing its payroll, while 40 percent go toward other operating expenses such as rent or utilities.

The chamber’s outlook

The Anne Arundel Chamber of Commerce currently has about 375 member businesses. Its CEO said some people tend to think the organization is a government institution, but it is actually a trade organization, relying on member dues to stay afloat.

The chamber has experienced some attrition during the pandemic. At a time when member businesses may need chamber assistance the most, membership dues are often one of the first expense reductions that owners choose to implement, Kleinschmidt said.

“We’ve tried to accommodate our members, because this is probably the time when they need the chamber of commerce the most,” Kleinschmidt said. “We’ve instituted a dues-relief program, where we give people a longer period of time to make their membership payments.”

The chamber offers networking and programming opportunities to its members year-round. There are informational webinars available, regular online networking opportunities, and monthly “high focus events” that feature subject matter experts and notable local speakers.

“February 18 is our economic outlook webinar with an economist from the Fed (Federal Reserve), and a couple CEOs to say what they see on the horizon for the economy,” Kleinschmidt said.

In March, Annapolis Mayor Gavin Buckley is scheduled to speak to chamber membership. In April, there will be a program featuring a summary of upcoming legislation impacting local business. And in May, County Executive Steuart Pittman plans to speak to the chamber.

But the CEO said the Anne Arundel chamber of commerce is available to help and answer some questions from non-members too. It is an attitude motivated by the chambers mission to try to help keep the local economy healthy.

“If you’re not a member give us a call,” Kleinschmidt said. “At the end of the day, we’re all in this together.”