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Governor Hogan Orders State Spending and Hiring Freeze – State Revenue Drop of $2.8 Billion Expected

Governor Hogan Orders State Spending and Hiring Freeze – State Revenue Drop of $2.8 Billion Expected

Today, Governor Larry Hogan instituted a spending and hiring freeze on all State government agencies, except for COVID-19 related expenditures and payroll. The Governor stated that the entire rainy-day fund (projected to contain $1.3 billion) may be expended on expenditures and efforts related to COVID-19 and to cover the revenue shortfall.

Earlier today, Maryland State Comptroller Peter Franchot announced that the State general fund revenue projection for the current fiscal year ending June 30, 2020 could be $2.8 billion less than expected – representing a drop of 18%.  This estimate was described as ‘worst case’ and assumes the ‘stay-at-home’ order continues through June 30, 2020.  Comptroller Franchot indicated these estimates will continue to be refined and updated.

While not specifically referenced during Governor Hogan’s press conference today, there is growing consensus in Annapolis that reductions (“cuts”) to the operating budget may be considered by the Board of Public Works prior to the return of the General Assembly in January 2021.

Regarding legislation passed in this year’s legislative Session, Governor Hogan stated that it is “very unlikely” that any legislation which increases State expenditures would be signed into law. This does not necessarily mean such bills will be vetoed – as the Governor has the authority to allow legislation to take effect ‘without his signature.’

We will continue to provide updates as they become available.  At RWL we continue to stand ready to assist you during these difficult times.  We can be reached at (410) 269-5066 and https://www.rwllaw.com/.

 

 

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