2018 End of Session Wrap-Up: County Tax Revenues

The segments below provide a brief overview of MACo’s work to protect and grow county revenues in the 2018 General Assembly – one aspect of which is defending local tax autonomy and county tax revenues.

Follow links for more coverage on Conduit Street and MACo’s Legislative Database

MACo’s 2018 Tax Bill Positions

In general, MACo advocates that local tax structures should remain a local prerogative. MACo is concerned with the carryover county fiscal effects of subtraction modification legislation and prefers approaches that provide local autonomy to determine the best way to provide tax incentives, rather than those that mandate reductions in local revenue sources. In 2018, counties were particularly reluctant to support additional subtraction modifications on a piecemeal basis, because it is impossible to truly forecast the real repercussions of federal tax reform.

On each of the following subtraction modification bills, MACo suggested 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 not only relieve counties from shouldering the burden of the costs for these benefits, but they also provide a benefit to eligible filers who do not itemize their deductions on their returns.

2018 Subtraction Modification Bills

Push Icons-NOT IDEAL

MACo opposed two bills which expand the existing subtraction modification for retired “hometown heroes,” applying it to correctional officers. According to the bills’ fiscal notes, local revenues would decline as a result of the bill by approximately $1 million in fiscal 2019; however, it is not clear from the fiscal note whether the thousands of local and federal correctional officers are included in that estimate. One of the bills failed, but the other, House Bill 296, passed the General Assembly. House Bill 129 Information | House Bill 296 Information | MACo Coverage

Push Icons-IMPROVEDMACo opposed a bill broadly expanding the existing subtraction modification for retired “hometown heroes,” depleting county income tax revenues by over $7 million annually by fiscal 2023. House Bill 354 / Senate Bill 299, part of the Governor’s legislative package, was amended to relate only to specified State correctional employees, eliminating any negative local fiscal effect, according to the Department of Legislative Services. The bill passed by the General Assembly and awaits the Governor’s signature. Bill Information |MACo Coverage

Push Icons-IMPROVEDMACo supported a bill to expand the existing military retirement income tax subtraction modification with amendments. House Bill 327 as amended limits the amount of income that may be exempted from tax to the first $15,000 of income received, and phase-in the exemption. The bill passed the General Assembly with amendments and awaits the Governor’s signature.  Bill Information

Push Icons-DEFEATEDMACo opposed a bill which expands the existing
subtraction modification for college savings plans from $2,500 to $5,000. House Bill 131 received an unfavorable committee report and was withdrawn by its sponsor, while its cross-file, Senate Bill 650, did not advance out of Committee. Bill Information |MACo Coverage.

 

Push Icons-DEFEATEDMACo opposed a bill allowing a subtraction modification under the State income tax for income from a qualified transfer of stock or membership interest of a Maryland corporation or limited liability company to certain employee ownership entities. House Bill 613 received an unfavorable report and was withdrawn by the sponsor. Bill Information

Push Icons-DEFEATEDMACo opposed a bill allowing a subtraction modification for certain income realized from the creation of an employee stock ownership plan, an employee ownership trust, or a direct share ownership plan. House Bill 876 / Senate Bill 498 did not advance out of its committees in the House or Senate. Bill Information |MACo Coverage

For more information on tax and revenues legislation tracked by MACo during the 2018 legislative session, click here.

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