Andrea Mansfield, on behalf of MACo, testified in opposition of SB 387, Income Tax Exemption Amount – Elderly Individuals, to the Senate Budget and Taxation Committee on February 24, 2016.
This bill increases the personal exemption for individuals 65 and older from $1,000 to $5,000 over four years beginning with tax year 2017.
MACo is concerned with the fiscal effects of this legislation and would prefer approaches that provide local autonomy to determine the best way to provide these incentives, rather than those that mandate reductions in local revenue sources.
From the MACo testimony,
SB 387 is one of many bills that have been introduced this session to reduce or adjust the income taxes paid by residents of Maryland. According to the bill’s fiscal note, local revenues would decline by $14.8 million in fiscal 2018, increasing to $66.2 million in fiscal 2021.
This revenue effect, combined with that of other bills that have been introduced this session, is simply not affordable as a statewide county mandate and could present substantial budget difficulties.
MACo’s preferred approach on this bill and other similar proposals is that it be enacted as a “local option.” This would give counties maximum flexibility to achieve local goals and manage their budgets to provide needed services.
Counties welcome the chance to work with state policymakers to develop flexible and optional tools to create broad or targeted tax incentives, but resist state-mandated changes that preclude local input.
An identical cross-filed bill, HB 455, was heard on February 25 in the Senate.
For more on 2016 MACo legislation, visit the Legislative Database.