Maryland’s top tax collector is calling for a statewide incentive to coax out-of-work residents to return to the workplace.
Comptroller Peter Franchot, speaking at Wednesday’s Board of Public Works meeting, called on Gov. Larry Hogan to offer the carrot rather than a stick — the cancellation of the state’s participation in a federal program that offers additional pandemic-related weekly payments to displaced workers.
“I would hope we could do something differently before (Hogan’s decision) actually takes effect,” said Franchot. “I would hope that we could come up with a carrot rather than a stick to get people back to work. This economy is complicated. It’s not like a switch, you can’t just flick it, open and say you’re going to go back to work. It’s more complicated than that.”
Hogan, a Republican in his second and final term, announced that the state would withdraw next month from a federal program that offers a $300 per week supplemental jobless benefit to workers displaced by the pandemic. The governor cited the improving economy and sharply declining pandemic measurements as well as a growing number of available jobs both in Maryland and nationally.
Franchot said displaced workers were counting on the payments.
“If I were to say at the end of today that I am going to stop the (tax) forbearance and the taxes for small businesses are due not on July 15 but at the end of this week, the business community would be furious with me and say, ‘No, we planned and budgeted for that. You can’t do that, you’re really jeopardizing things and pulling the rug out from underneath us,'” said Franchot. “In a way we’re also pulling the rug out from underneath the hundreds of thousands of Marylanders who are expecting the $300 payment, and it’s federal money. People, just like businesses, budgeted for it, planned for it, strategized they were going to get it.”
Hogan, who chairs the three-person board, did not respond to Franchot’s proposal.
Nationally, the Bureau of Labor Statistics reported last week that April saw a record number of job openings. The 9.3 million positions are the most since the data was tracked and reported in December 2000.
Maryland gained 3,800 jobs in that same month. Over the last year, the state has reported more than 27,000 new jobs since January and 12 consecutive months of increased new jobs.
At least 25 states, including Maryland, have announced plans to end early the $300 per week additional payments made available through the American Rescue Plan, which is set to expire in September. Some criticize the program for incentivizing workers to remain unemployed.
Businesses in recent weeks have struggled to find workers to fill open positions. Some have resorted to offering higher pay and other incentives, including smartphones, to attract applicants.
Some states also are offering incentives to encourage workers to return to the job market.
“As my mother said, honey works better than vinegar,” said Francot. “Carrot works better than the stick.”
Colorado and Connecticut, which are continuing in the federal program, announced they would offer bonus payments to workers who find jobs.
Colorado’s Jumpstart program offered a $1,600 grant to those who found a job in May and $1,200 to those who find a job in June.
Back to Work Connecticut provided one-time bonuses of $1,000 to 10,000 workers who found jobs before May 30, providing they keep those jobs for the next eight weeks.
Arizona’s back-to-work program offers a $2,000 bonus to displaced workers who work 40 hours per week in at least eight of the first 10 weeks. Those who work 20-hour weeks in the first 10 weeks can get a $1,000 bonus.
Oklahoma is offering $1,200 to the first 20,000 unemployed workers who return to the workplace by Sept. 4 and work at least 32 hours per week for six consecutive weeks.
“I’m not suggesting that’s something Maryland should do, but maybe we could take a look at your decision and come up with some other more, something that incentivizes people rather than penalizes them or punishes them,” said Franchot. “In other words, people want to do the right thing, and if we can do something that was positive rather than negative, I think it would be much better for the state.”
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