Maryland Gov. Larry Hogan (R) announced Thursday that he plans to spend the largest surplus in the state’s history on extending tax relief, boosting the state’s rainy day fund and increasing benefits to state employees.

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       Hogan offered a proposed framework for spending of the $2.5 billion, which largely comes from increased tax revenue, but no details on what type of break seniors and working and poor residents could receive, or how much compensation state employees could expect.

       During the news conference, Hogan also made his first comments on the indictment of his former chief of staff, Roy McGrath. McGrath, who resigned as Hogan’s top aide last year after it was publicly revealed he got a large severance package from the quasi-governmental agency he previously led, was indicted earlier this week in federal and state court with a long list of charges, including fraud, embezzlement and secretly recording Hogan and other state officials.

       Md. Gov. Hogan’s former chief of staff is indicted on federal wire fraud charges

       Asked about the indictment, the governor called McGrath’s actions “kind of an outrageous situation” and “kind of disgraceful.” Hogan said he was interviewed by prosecutors and directed his staff to cooperate with the investigation. He also said he did not know what was discussed in the conversations McGrath allegedly recorded.

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       State officials released updated revenue figures last week that showed that the doomsday predictions in the spring of 2020 not only did not come to fruition but — largely due to the federal government’s stimulus funding and actions taken on the state level — Maryland is in better fiscal shape at the end of this fiscal year than it has been in decades.

       “Already, some politicians see this as a chance to go on a big spending spree with pet projects, big payouts to special interests and new mandated increases in spending,” he said. “That is not going to happen on my watch.”

       Hogan said one of his top priorities will be reducing taxes for seniors.

       “Cutting retirement taxes is one of the most important things we can do and it’s something we have been trying to accomplish for seven years,” he said.

       Buoyed by federal stimulus, Maryland reports $2.5 billion budget windfall

       Hogan said he plans to build off the $1.1 billion stimulus package he worked with legislative leaders on earlier this year. The package included a temporary expansion of the state’s lump-sum cash benefit for the working poor, known as the earned-income tax credit and considered one of the most generous in the nation.

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       Treasurer Nancy K. Kopp (D) noted the state’s fiscal health on Wednesday at the start of the meeting of the Board of Public Works, where she sits with Hogan and Comptroller Peter Franchot (D).

       Kopp said the revenue estimates illustrate a picture of “two Marylands,” where there are “people who are doing very well and then others who are profoundly hit by the pandemic and continue to be hit and have not had a chance to bounce back.” She said she hoped efforts will be made in coming weeks and months to help those most in need.

       Budget Secretary David R. Brinkley said the governor’s upcoming budget, which will be submitted in January, will direct more than half a billion dollars to the state’s reserve fund, known as the rainy day fund. Currently, the fund is at $1.1 billion. The proposed infusion would increase it to $1.67 billion.

       Buoyed by federal stimulus, Maryland reports $2.5 billion budget windfall

       Maryland’s dire budget projections so far have not come to pass

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