Tax Alterations Without County Input Depletes Local Resources

MACo Associate Director Barbara Zektick testified before the Senate Budget and Taxation Committee on February 21, 2018 in opposition to Senate Bill 299, “Income Tax Subtraction Modification – Correctional Officers (Hometown Heroes Act of 2018)”.

This would drastically alter the existing income tax modification for retired “hometown heroes”, while reducing county revenues by over $7 million annually by 2023. This subtraction modification approach excludes local jurisdictions from working with policymakers to develop flexible tools to provide tax incentives to different qualifying groups in those areas.

Additionally, with the uncertain effects of tax reform still looming over county revenues it is possible that modifications such as this one could present significant budget difficulties.

From MACo Testimony:

SB 299 is just one of many bills that have been introduced this session to reduce or adjust the income taxes paid by residents of Maryland. The revenue effect of this bill, combined with that of other bills already introduced this session, simply cannot be afforded as a statewide county mandate and could present substantial budget difficulties. This is exacerbated by the fact that counties do not know yet just how tax reform 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.

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.”

For more information on other tax-related bills, follow MACo’s advocacy efforts during the 2018 legislative session here.