COMPREHENSIVE ANNUAL Fiscal Year Ended June 30 FINANCIAL REPORT 2020 Curbside Delivery, Annapolis Maryland. PHOTO: MAXIMILIAN FRANZ GOVERNMENTAL EXECUTIVE LEGISLATIVE JUDICIAL BRANCHES Lawrence J. Hogan, Jr. William C. Ferguson IV Mary Ellen Barbera OF MARYLAND Governor President of the Senate Chief Judge Boyd K. Rutherford Adrienne A. Jones Court of Appeals of Maryland Lieutenant Governor Speaker of Peter Franchot the House of Delegates Comptroller Brian E. Frosh Attorney General Nancy K. Kopp Treasurer W W W . M A R Y L A N D TA X E S . G O V I SUBHEAD Outdoor Dining, Annapolis. PHOTO: MAXIMILIAN FRANZ Marylanders can always be counted on Business owners such as Evan Weinstein, to find innovative ways to meet new challenges. owner of Underground Pizza, of Baltimore, While our top priority has been protecting public started a new business model mailing partially health during the COVID-19 pandemic, we also frozen pizzas directly to customers or arranging are working together to protect our economy. direct pick up to cook at home. Our beloved small businesses are facing the In Baltimore, Mount Royal Soaps Company biggest challenge in years as a worldwide health formed an unlikely partnership with Charm City pandemic wreaks havoc on our economy. Businesses Meadworks and Waverly Colors, a local maker of of all sizes across all industries had to quickly pigments for tattoos, to create hand sanitizer. pivot and rethink the way they operate or face Pocomoke City’s Hardwire LLC quickly switched devastating consequences. Sadly, thousands of operations from making body armor that protects businesses have closed due to the pandemic. law enforcement, military and residents to creating However, from all corners of the state, business face shields that protects our front line and medi- owners have stepped up to that challenge, devising cal heroes. new ways to stay open while keeping customers Distillers have taken a break from their passion and employees safe from COVID-19. They have of creating the best alcohol in country to create used ingenuity in the face of adversity to succeed. products to keep their fellow Marylanders safe Businesses from Cumberland to Edgewater, Bel from the effects of COVID-19. Air to La Plata, and all places in between, quickly While this pandemic has affected Maryland adjusted to provide contactless delivery and curb- in ways no one could have imagined, the can-do side service to customers. The streets of places like attitude of these business owners and thousands Annapolis, Oakland and throughout Maryland were more like them across this state will help see the transformed for restaurants to offer outdoor dining. economy through this tough time. II COMPREHENSIVE ANNUAL FINANCIAL REPORT COMPTROLLER OF MARYLAND A MESSAGE FROM COMPTROLLER OF MARYLAND COMPTROLLER Peter Franchot PETER FRANCHOT Comptroller Dear Marylanders, Sharonne Bonardi Deputy Comptroller As Comptroller and Maryland’s fiscal watchdog since Emmanuel Welsh 2007, I have seen the State of Maryland overcome many Chief of Staff challenges over the past 14 years. The year 2020 has Anne Klase Assistant Comptroller been a rollercoaster of change – from taking Brian L. Oliner, Esquire unprecedented steps to protect public health and to Counsel to the Comptroller Dennis Krysiak, Director retooling our economy. Many of us continue to question how the future will look Administration and Finance and how our way of life has changed, potentially for years to come. Andrew Schaufele, Director Bureau of Revenue Estimates Throughout the years, I have maintained a strong track record of holding government Dhiren Shah, Director accountable and making certain that taxpayer money is spent wisely. Maryland’s Central Payroll Bureau long-term fiscal health impacts your fiscal health and that is why I remain committed Daniel C. Riley Jr., Director Compliance Division to responsible economic policies that support our residents and small businesses. Jeffrey A. Kelly, Director Field Enforcement Division A world health crisis has tested our resolve and its impact will reverberate in our Kara Blouin, Director lives for years. From a fiscal standpoint, the COVID-19 pandemic rattled our state’s Human Resources economy, but did not shatter it. Maryland has a strong economic base that should help John Hiter, Director Information Technology Division accelerate our recovery. Susan O’Brien, Director Office of Communications At the forefront of our recovery are small business owners, who make up most of Wayne P. Green, Director the state’s economy. Faced with extraordinary challenges, these local entrepreneurs Revenue Administration Division have risen to the occasion, finding unique ways to stay open, serve their customers, Gary White, Director Tax Payer Services and provide jobs for our community. This report published by: I will always advocate for the success of businesses throughout Maryland. In these GENERAL ACCOUNTING DIVISION tough times, I remain committed to advancing reforms that reduce the prohibitive Sandra L. Zinck, CPA Director regulatory burdens placed upon Maryland businesses. For us to survive, businesses ACCOUNTING OPERATIONS large and small must partner with our communities to ensure long-term fiscal help. AND FINANCIAL REPORTING Elana Schulman, CPA, CFE Despite everything that has happened, I remain resolute in our core mission at the Assistant Director Maryland Comptroller’s Office: being respectful, responsive and getting results for REPORTING MANAGERS Maryland taxpayers. George Cherupil Sheena Asseviero, CPA I am eager to work, hand-in-hand, with residents and business owners to ensure a Tania Ivanova healthy Maryland and a thriving economy today and years to come. ADMINISTRATIVE SUPPORT Megan Arnold Sincerely, ACCOUNTANTS E. Kenneth Henschen, CPA Mahima Dave Corinne Williams Denise Latimer Maryland Comptroller, Peter Franchot Andrews Philip W W W . M A R Y L A N D TA X E S . G O V III SUBHEAD Above: A woman glues parts of the Hardwire face shield together, in March 2020, at Hardwire’s facility in Pocomoke City, Maryland. Hardwire hired dozens of college students and recently unemployed hospitality workers to ramp up production of its face shields. Left: A worker sets a completed face shield aside to continue assembling shields in March 2020. The company produced up to 100,000 face shields a day. Hardwire, LLC – Pocomoke City, Worcester County. PHOTOs: MATTHEW PRENSKY Before the COVID-19 pandemic hit, In just 30 days, the company went from testing Hardwire LLC in Pocomoke City was focused on a prototype to making 8,000 shields a day to keeping people around the world safe by creating eventually 100,000 a day. During that time, they protective armor used by military, law enforcement, hired more than 100 people to help with production. businesses, schools and everyday people. Since then, the Worcester County-based company But with the spread of COVID-19, Hardwire has created millions of face shields for people quickly shifted gears to making face shields. across America. IV COMPREHENSIVE ANNUAL FINANCIAL REPORT COMPTROLLER OF MARYLAND SUBHEAD CHRISTOPHER MYERS PHOTOGRAPHER MYERS CHRISTOPHER PHOTO: PHOTO: Known for its artisanal suds and skincare products, Mount Royal Soap Company in Baltimore formed an unlikely partnership with alcohol maker Charm City Meadworks and Waverly Color Company, a producer of high-end tattoo ink, to produce hand sanitizer to combat COVID-19. Mount Royal Soap Co., Baltimore City. PHOTOs: ________________ Mount Royal Soap Co. in Baltimore developed tizer gel hundreds of units daily in two varieties. a partnership with Charm City Meadworks and Mount Royal supplied the materials to make the Waverly Colors, a local maker of pigments for sanitizer, Waverly Colors repurposed their bottles tattoos, to make hand sanitizer. and Charm City provided a production space. Mount Royal’s usual products include artisanal The move helped save jobs and provided a great soaps, skincare and bathing products. But by April, service to the community, with some of the products the three began to collaborate to make hand sani- being donated to residents and civic groups. W W W . M A R Y L A N D TA X E S . G O V V SUBHEAD McClintock Distillery, Frederick County PHOTOs: MCCLINTOCK DISTILLERY COVID-19 was a disruptive force to Maryland’s beer and wine to supplement production. economy, and the craft alcohol industry was no Regular shipments of hand sanitizer were exception. Despite the struggle to remain open and supplied to Johns Hopkins for medical professionals, profitable, the Maryland Distiller’s Guild responded while the rest was dispersed to our first responders, to the critical shortage of hand sanitizer, a necessary other medical facilities and charitable organizations tool to fight the spread of the disease. More than 17 caring for society’s vulnerable population. The Free State distillers heeded the call, from Frederick distillers stepped in at a critical time when those to Ocean City, and Baltimore to St. Mary’s County, most susceptible to the virus needed them. switching production from manufacturing spirits to The shift to production of hand sanitizer was producing more than 50,000 gallons of hand sanitizer not without its advantages. During extraordinarily in six weeks. dark economic times, manufacturing sanitizer The transition was seamless as the process of helped distillers keep the lights on. For some, like manufacturing sanitizer was quite similar to the McClintock Distilling in Frederick County, the need distillation of spirits. When a shortage of ingredients for hand sanitizer was so great they were forced to threatened production, Maryland wineries and expand into an adjacent space to keep up with breweries provided an assist by donating unsalable demand. VI COMPREHENSIVE ANNUAL FINANCIAL REPORT COMPTROLLER OF MARYLAND SUBHEAD McClintock Distillery, Frederick County PHOTO: ALYSSA MALOOF & LYON DISTILLERY Despite the shift in production, Maryland’s Barn Distilling’s 700 MPH Bourbon, aged in a distillers were constantly innovating, and avidly Marine Harrier jet’s external fuel tank, demonstrated working to create quality spirits.