Maryland’s RELIEF Act Could Cost The State American Rescue Plan Money

The federal law prohibits states receiving these funds from enacting tax reductions or credits.


Annapolis, Md (KM) The $1-billion RELIEF Act approved by the General Assembly and signed into law by the Governor could endanger Maryland’s funding form the American Rescue Plan. The $1.9-trillion COVID relief plan passed by Congress contains a provision prohibiting state and local governments which receive funding from this act from enacting tax reductions or tax credits, and then using federal money to make up for any lost revenue.

The RELIEF Act provides tax relief and economic stimulus for families and small businesses suffering economically from the COVID-19 pandemic. Because of this act, Maryland could lose out on $200-million from the American Rescue Plan. “I hope not. I have my fingers and toes crossed that all that money will come to the state. We certainly need it,” says Comptroller Peter Franchot.

Maryland is expected to get $3.9-billion in federal aid. “The money is very important and we hopefully will not be penalized for something that was well intentioned, put it that way,” Franchot says.

The US Treasury Department is expected to offer more details on how this law will affect how the money is doled out.

No matter how much Maryland receives, Franchot says he’s urging the General Assembly and the Governor to set up a panel of fiscal experts to oversee how this huge amount of money is spent. He says this board will make sure the money is spent appropriately on residents and small businesses which are in need. “Making sure there is as little fraud as possible involved in the applications for some of that money,”: he says.

Frederick County is expected to receive $50-million from the American Rescue Plan.


By Kevin McManus