“Funding Our Future” Effort Puts A Finer Point on Kirwan Costs, Means

Stakeholder groups supporting the Kirwan education plan have developed a coalition to support tax reforms to help support its substantial costs, including a slate of revenue proposals in a report, “Funding our Future”

The policy debate over school funding, and the goals and costs of the Kirwan Commission plan, has been gaining steam for months leading up to its expected peak during the 2020 legislative session. Now, a coalition supporting the effort is offering specifics on the other side of the equation: how to pay for it.

SEIU Local 500, a labor union representing public sector employees across Maryland, including many public school employees, is among the drivers of a coalition styled as the “Maryland Fair Funding Coalition” seeking to support education investments with changes to the state revenue structure.

From the webpage, hosted by SEIU Local 500, dedicated to the effort:

We are calling on our public officials in 2020 to pass new revenues that:

  • Fully fund the Kirwan Commission recommendations and protect other essential state priorities.

  • Fix Maryland’s upside-down tax code so that profitable corporations and super-rich individuals pay their fair share.

  • Maintain strong investments in other public services and the public servants who provide them.

Funding Our Future describes how Maryland’s richest residents and wealthy corporations can pay their fair share so our students have the schools they deserve.

FOFcoverThe elements of the plan have a distinctly “progressive” flavor. Segments of the report include:

  • Untaxed Wealth and its cost
    to public education
  • A tax system skewed toward
    corporations and the wealthy
  • Funding schools and communities by
    making corporations and the wealthy
    pay their fair share

Coverage from Maryland Matters notes that the proposal embeds a long-time change sought by progressive groups, subjecting multi-state corporations to “combined reporting” for the state corporate income tax. From their write-up:

The report suggests that implementing a combined reporting corporate tax system could keep companies from using tax avoidance strategies. In combined reporting, corporations are required to report total profits including those of subsidiaries, and the state can apply taxes based on the company’s activities in the state.

Twenty-eight states and Washington, D.C., already use combined corporate reporting. In Maryland, the shift could generate an additional $92 million in state revenue each year, according to legislative analysts.

The majority of multi-state corporations operating in Maryland must already calculate combined reporting for other states, according to the SEIU report.

 

The Kirwan debate is already receiving direct attention from both supporters and detractors, and the closer link to revenue systems may only intensify that. Supporters may find the progressive taxation ideas in reports like these to be palatable and fair, while tax opponents will surely identify competitive and administrative issues in their specifics.

Michael Sanderson

Executive Director Maryland Association of Counties
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