Session Update: Tax and Revenue Legislation

This post summarizes the status of various tax and revenue bills that MACo either considered or took a position on.

Overriding of Property Tax CapsHB 83 and SB 740 would authorize the county council of a charter county to set a property tax rate higher than the rate authorized in the county’s charter. In addition, HB 83 would require a two-thirds vote of the council and SB 740 would require the additional revenue to only be used for the sole purpose of funding the approved budget of the county board of education. MACo opposed the message and precedent of both bills in allowing state policy to override those actions that have been approved by a jurisdiction’s voters.  Status: No action has been on these bills in their respective Committees, House Ways and Means and Senate Budget and Taxation.  However, similar provisions have been included in the Maintenance of Effort legislation, HB 1412 and SB 848.

Collection of Lead Poisoning Compensation Fee Through the Property TaxHB 472/SB 873 would establish a Lead Poisoning Compensation Fund and assess a fee that residential property owners must pay if their units were built before 1978. The fee would be collected by the county in which the property is located through the property tax. MACo supported the bill with amendments to address the costly, administrative complexities HB 472 would place on the counties to collect the fee through the property tax.  Status:  Both bills have been heard in their respective committees, House Environmental Matters and Senate Finance.  The Housing and Real Property Subcommittee of House Environmental Matters will be taking up HB 472 early this week.

Telecommunications Reform CommissionHB 563/SB 567 would establish a 13 member Telecommunications Tax Reform Commission to assess the feasibility and fiscal implications for State and local governments of a competitively neutral telecommunications tax and fee system that encourages investment in broadband networks and eliminates the disparate treatment of similar telecommunications service providers.  The bills would also impose a far-reaching moratorium on State and local governments imposing new, or raising existing, telecommunications taxes and fees. MACo offered amendments to eliminate the moratorium; expand representation on the Commission; remove cable franchise and public, education, and government access channel (PEG) fees from the scope of the study commission; and extend the time frame of the Commission’s review.  Status:  House Ways and Mean’s Vice Chair’s Subcommittee has voted favorably on the bill with amendments to address MACo’s concerns.  The full committee should vote this week.  It appears that the Senate plans to adopt the House amendments.

County Income Tax and Imposing on a Bracket Basis: SB 218 would increase the maximum tax rate a county may impose on an individual’s Maryland taxable income to 3.5% and authorize a county to impose the increase to the county income tax rate on a bracket basis. This legislation was introduced to assist local governments with offsetting some or all of the costs associated with the teacher pension shift. MACo expressed its appreciations for the intent, however, it strongly opposes these additional cost shifts to county government and therefore, also opposes any proposals to assist counties with accommodating these costs.  Status:  SB 218 was voted unfavorable by the Senate Budget and Taxation Committee.

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