Maryland is Not Prepared for the Recession, and the Coronavirus Crisis will Worsen the Situation
Maryland could have done more to prepare for the recession, which is taking hold amid the COVID-19 pandemic. While our state has taken some positive steps, such as funding emergency reserves and expanding Medicaid, gaps in our policies still leave some Maryland families and our public investments vulnerable, according to a new report from the Center on Budget and Policy Priorities. As a result, state responses as much as federal ones will be essential in the weeks and months ahead.
“Recessions harm people with lower incomes the most, and the growing coronavirus pandemic will worsen an already tenuous situation,” Maryland Center on Economic Policy Executive Director Benjamin Orr said. “Maryland’s members of Congress and state lawmakers must continue to expand and streamline state policies that soften the economic crisis by protecting residents from job losses and wage cuts, health insurance losses, barriers to education, and other cascading effects.”
Even the highest performing states will struggle to manage the fiscal and public health crises that are currently unfolding. While the federal government’s proposed economic responses will provide much needed assistance, federal aid to states and localities remains more essential now than ever.
“State policy is very important in determining how people fare in a recession,” explained the report’s lead author, Michael Leachman, Senior Director of State Fiscal Research at CBPP. “This recession is likely to be significant and difficult for all states – but especially severe for those that have failed to prepare.”
No state scores in the top ten for all four areas of recession preparedness, which include budget reserves, unemployment insurance, Medicaid, and higher education. Maryland is less prepared than most states in ensuring that unemployment insurance benefits reach the people who need them and could take additional steps to strengthen its reserves and access to Medicaid.
- Adequate budget reserves help lawmakers avoid cuts to essential services, which are especially important in times of economic crisis. Maryland has built up some reserves and as a wealthy state is considered fairly able to weather financial crises, but still ranks 37th among the states, with reserves only equaling about 7% of annual expenditures.
- Strong unemployment insurance systems affect how well families do families during and even after a recession. Maryland ranks lower than most states (in 34th and 35th place) both in terms of the share of workers who are eligible for unemployment insurance and in the amount of benefits. Benefits reach only 22 percent of unemployed workers, and average weekly benefits only equal about one-third of the state’s average weekly wage, making it harder for families to get by. Recently passed emergency legislation will provide some greater access to unemployment for those affected by the current crisis.
- Accessible Medicaid coverage also makes it easier for families who have lost jobs or are suffering other adverse impacts to get health care. Maryland has taken a number of positive steps to increase access to Medicaid, but there are still a couple more steps we can take to make it stronger.
- Affordable colleges and universities allow residents to boost their skills and training when jobs are scarce. Maryland ranks better than many other states on some measures of college affordability because of the investments we have made in our education system. There are some additional steps we could take to ensure all Marylanders can afford to access postsecondary education if they want it.
Maryland’s state and federal lawmakers can and must do more to protect residents from health and economic hardship. Federal support for state and local governments will help states maintain essential public services and deliver additional assistance to Marylanders struggling to afford the basics during the recession. And state policymakers should act as soon as possible to strengthen programs like unemployment insurance and Medicaid so that this vital assistance is able to reach everyone who needs it.
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Media Contacts
Elizabeth Lee, Center on Budget and Policy Priorities, 202-408- 1080
Kali Schumitz, Maryland Center on Economic Policy, 410-412-9105, ext. 701
