Tax Benefit Mandate Handcuffs Local Jurisdictions

MACo Policy Associate Kevin Kinnally submitted written testimony in opposition to House Bill 540, “Labor and Employment – Pre-Tax Transportation Fringe Benefit – Requirement (Maryland Pre-Tax Commuter Benefit Act), to the House Economic Matters Committee on February 13, 2018.

This legislation would mandate counties to provide a pre-tax benefit for certain workplace transportation costs. While jurisdictions currently have the discretion to administer this benefit, the bill introduced here would force counties to offer the credit without consideration of local budgets or differences in modes of transportation in areas across the state.

From MACo Testimony:

According to the bill’s fiscal note, local income tax revenues would decline by more than $2 million per year. This is exacerbated by the fact that counties do not know yet just how federal tax reform, and the state reaction to it, will affect their revenues.

MACo suggests that consideration be given instead to providing state tax credits, which do not mandate the depletion of resources from all counties for education, public safety, and needed community services. State tax credits also afford a far greater range of effect to encourage employees to avail themselves of the new benefit.

Counties in their dual roles as employers and tax collectors object to proposals that mandate specific employer decisions, and potentially deplete local revenues without input by local elected officials.”

Follow MACo’s advocacy efforts during the 2018 legislative session here.