Peter Franchot has served as Maryland’s Comptroller for the last 14 years. Prior to being elected Comptroller, he served twenty years in the House of Delegates, representing the residents of Montgomery County. Nevins & Associates President David Nevins recently spoke with Comptroller Franchot to discuss what it’s like to be a Comptroller during the Covid-19 crisis, the current state of Maryland’s economy and his future plans to run for Governor of Maryland.

David Nevins: This is quite a time to be a comptroller. What is the state of Maryland’s economy in light of the impact of COVID-19?It must be virtually impossible to predict tax revenues significantly in advance, correct?

Peter Franchot: The pandemic has had an enormous economic impact on the state – along with the health and medical impact that it’s had. We’re not quite clear what the reality of the revenues will be. It’s a challenging time and an unusual tax season. I personally believe I’m playing a constructive role. Back in March I said there would be a tax holiday – I said I wouldn’t collect any state taxes from individual or business taxpayers on April 15th. The delay in collecting taxes helped our businesses stay open and our neighbors employed, pay their rent and mortgages, and put food on the table. We will not know the amount of revenue collected from July 15 until late August at the earliest.In June, the Maryland Bureau of Revenue Estimates presented two scenarios. Two – because of the rapidly evolving nature and the heightened nature of the fiscal uncertainty caused by the COVID-19 pandemic.The first scenario shows a $925 million reduction in FY 2020, $2 billion in FY 2021, and nearly $2.6 billion in FY 2022. The second scenario would result in a $1.1 billion reduction in FY 2020, $2.6 billion in FY 2021, and almost $4 billion in FY 2022.

DN: What are your thoughts on each of these scenarios?

PF: These two scenarios assume several factors that, in many cases, are beyond our control. The first scenario, for example, assumes that Congress will provide financial assistance to states and local governments, and that additional stimulus packages will be approved to assist struggling Americans, small businesses, and corporations…Which is certainly a very optimistic outlook given the deep partisan divide that has currently paralyzed Washington. What is very clear, however, is that we could end up much worse, because it assumes two things: that we have a vaccine, and that we don't have to endure another closure of the American economy. If the latter happens, and the former doesn’t, we could end up in a situation that is far worse than either of these scenarios are projecting. As Comptroller and as Chair of the Board of Revenue Estimates, I’ve consistently used this platform to warn against massive spending, urge fiscal caution, and advocate for saving as much money as possible. We’re not like Washington… we just can’t borrow and borrow and accrue unsustainable deficits that we pass along to future generations. As I’ve said in the past, we cannot be socially responsible if we’re not fiscally responsible. And, as we enter this era of economic devastation, I cannot emphasize enough that now is the worst possible time, under the worst possible circumstances, to enter into massive spending projects and take more money out of the consumers’ pockets during a time when hundreds of thousands of our fellow Marylanders are experiencing job loss, potential job loss, reduction in income. We will overcome this public health crisis. The best minds in science and medicine will find a vaccine. And policymakers will find a way to avoid another closure of the economy, while safeguarding the health and well-being of our citizens, especially the most vulnerable among us.

DN: What words of advice do you have for local business owners and operators in the state of Maryland, given the current virus situation and the impact it’s had fiscally?

PF: Well, a week after the Governor ordered the economic shutdown here in Maryland, I publicly called for him to immediately release $500 million from the State’s Rainy Day Fund to provide immediate financial assistance to as many businesses as we can to prevent them from bellying up. The Governor decided to go with a much lower amount, at $175 million, and we’re still experiencing delays in getting those funds out to the applicants, which is completely unacceptable. I encourage business owners and operators to tell the Governor to release more funds from the Rainy Day Fund to help these businesses keep their lights on. The federal PPP was helpful, but that was just a band-aid to stop the bleeding. And it was being given to huge, cash rich corporations instead of the little guys – which are the bulk of Maryland’s employees and tax base.I’ve spoken with countless small businesses out there, and they are struggling. So, I think we need to see governments at all levels explore more options to provide financial and regulatory assistance as they weather through this economic tornado.One of the more frustrating experiences that I’ve heard from small businesses – as your question alluded to – is the fact that a lot of them applied, and received notifications of approval, only to be informed later on that their approval status has been rescinded due to inadequate funding. This is very problematic, of course, because small businesses took the State at our word and made business decisions based on the understanding that they would receive some financial assistance through these grants and loans – such as retaining their workers, purchasing equipment and even staying open – based upon the expectation of receiving these funds down the road. It’s very unacceptable, I think, for the State to go back on its word to small businesses who are already struggling to survive, and I have urged the Commerce Department and the Administration to go back and find additional dollars to honor our commitment and to keep our word.

DN: Something that I have admired about your professional service the most – you’ve been one of the very few to remain politically independent. As a member of the small Board of Public Works, that’s not such an easy task, especially since, sadly, we live in an era of such divisiveness politically. How do you make that work?

PF: Here’s the secret formula. I am 72 years old. I’ve been an elected official for the last 34 years and I’m going to be the Comptroller for another two years. I don’t need to be in my office or have a lot of fear. That’s the beauty of being older and more experienced. I don’t need to be looking over my shoulder all the time. I used to when I was younger and more vulnerable politically. I call things as I see them. Sometimes I’m not 100% correct and that’s ok because I’m authentic. I’m very humbled that I’ve got a great job and I’m relatively popular, but I’m not close to perfect. Often they say long tenured politicians get stale - I’m actually a long-tenured politician who is capable of delivering the public service people deserve. I’m able to speak independently on different issues. For example, I’m very upset about the current situation with the pandemic. The United States has dropped the ball – we’re not only challenging the health and safety of our citizens, but we’re also challenging the economic prosperity of our country. I’m frustrated on both sides. I’m pretty frustrated with the situation in Maryland right now, I have to admit. Our cases are going back up and we may find ourselves in a bad situation again. As much as I have said that Governor Hogan has been vigorous, I find that to be waning a bit. Like I said, I call it as I see it.

DN: You mentioned earlier that you’re going to be comptroller for another two years. I’ve also heard you say it’s “up or out” for you. What does that mean for your future?

PF: I do plan on running for governor. I happen to think I have hundreds of ideas of experimental programs that could be piloted at little expense in the areas of healthcare, education, transportation, public safety, and social and economic justice. You have to have the experience of being in elected office for a long time and the wisdom to be able to suggest things that some people will like and some people won’t like. I want to have a clinic where we reimagine the state – we’re not just funding old, stale ideas, but testing out new and exciting ideas. I’ll leave you with that.