A helpful bill governing local income taxes has passed and will become law.
SB 766 was passed to oversee the county repayment of funds to the state’s income tax reserves – allowing a longer time to fully recognize and account for the Wynne income tax refunds. The bill also creates a statutory system to make whole a local government (either county or municipality) that has been under- or over-distributed its income taxes by accident.
Yesterday, Governor Hogan indicated that he would not sign the bill, but would not veto it — meaning the bill will become law without his signature.
From MACo’s testimony:
To address the Wynne Case, a repayment provision was included in the Budget Reconciliation and Financing Act of 2015 (Chapter 489, Acts of 2015) which spread the repayment of local income tax credits to the State over multiple quarterly distributions. Senate amendments, driven by bill testimony, also respond to these looming pressures, and adjust that timetable to replenish the reserve fund. The revised schedule would more realistically use 20 quarterly repayments, lessening the abrupt “cliff effect” that could otherwise be felt by county budgets as these refunds are absorbed locally.
See previous Conduit Street coverage, Senate Proposal: Delay, Stretch Out Wynne Paybacks.