Times are tough, my friends, and I’m not even talking about our obvious health-related issues.
No, I’m talking about the economy … although there’s really no separating COVID-19 from the economy these days, is there? They’re intertwined.
Still, CPAs, you have some expertise on the economy side of the scale, don’t you? So let’s focus on that.
Brace yourselves. It isn’t pretty.
Maryland Comptroller Peter Franchot and Bureau of Revenue Estimates Director Andrew Schaufele say it’s possible that Maryland’s revenue estimates will fall short by up to $2.8 billion for Fiscal Year 2020. That’s $2.8 billion … with a B.
“I have repeatedly sounded the alarms on the need for our state to put away as much money possible to help us weather fiscal and economic storms that may come our way,” Franchot said. “The storm has finally arrived, and it is stronger and more devastating than we’ve ever seen before. Thousands of businesses have had to close their doors, and hundreds of thousands of Marylanders now find themselves without a job.”
Yes, things are bad, and we knew they would be. Here are some data points to back up those dire projections.
- Cumulative lost General Fund dollars by tax type and fiscal year
- Cumulative Maryland initial unemployment insurance claims — recent recessions
- Tax Year 2018 withholding by industry
- Estimated sales tax impact
At the same time, Maryland Gov. Larry Hogan is planning to enact a state budget freeze in response to the health crisis.
“The state will only spend money on coronavirus-related expenses and payroll, Hogan said,” The Baltimore Sun reported. “Additionally, the state will institute a hiring freeze and look for possible cuts in the budget. The Republican governor also said he was unlikely to sign into law any bills that require additional future spending.”
All of this sounds like bad news — and from the short-term perspective of Maryland residents and businesses, it is.
But it also represents a huge opportunity for our profession.
This is your sweet spot, CPAs. Who knows the language of business better than you? Our profession is positioned perfectly to help our state and our nation right their economic ships when we emerge on the other side of this crisis.
“If there’s ever been a time for us as CPAs and as a profession to exhibit strong leadership in our communities, this would be that time,” MACPA President and CEO Tom Hood said recently. “There are a whole lot of things happening at the federal and state level, and ultimately many of them will probably flow through the tax system — which all of you are experts at. So let’s look at this and say, ‘What would an extraordinary person in my situation do right now?’
“Let’s choose,” Hood added, “to be extraordinary, and to show Maryland how this profession can make a huge impact as experts in the language of business.”
The MACPA is already taking steps toward that end. We have joined a coalition of business groups (headed by the Maryland Chamber of Commerce and other business-centric associations) that are collaborating on ways to help restart Maryland’s economy in a post-coronavirus world. That work — and our economy — will grow stronger as the virus weakens.
We’ll need your help and expertise. Few are as well prepared as CPAs to help our state and our nation strengthen their economies once again.
This is our opportunity to be extraordinary. Let’s seize it.