Governor Larry Hogan, Senate President Bill Ferguson, and House Speaker Adrienne Jones today announced a bipartisan agreement to provide $1.86 billion in tax relief for Maryland retirees, small businesses, and low-income families over five years.
This bipartisan tax relief agreement, which does not affect local revenues, includes the following provisions for FY23-FY27:
- Tax Relief For Retirees: State income tax credits for individuals 65 and older making up to $100,000 in retirement income, and married couples making up to $150,000 in retirement income. As a result, 80 percent of Maryland’s retirees will receive substantial relief or pay no state income taxes. ($1.55 billion)
- The Work Opportunity Tax Credit: State match for a federal program that incentivizes employers to hire and retain chronically unemployed workers from underserved communities that have faced significant barriers to employment. ($195 million)
- Family Budget Boosters: Sales tax exemptions for child care products such as diapers, car seats, and baby bottles, and critical health products such as dental hygiene products, diabetic care products, and medical devices. ($115.6 million)
According to a press release:
“Today, we are announcing the largest tax cut package in state history with major and long-overdue relief for Maryland’s retirees,” said Governor Hogan. “Cutting our state’s retirement taxes is something we have been trying to accomplish for seven years, and I want to thank the leaders of the General Assembly for working with us to get this done for Maryland’s seniors. This agreement will deliver on our promise to provide real, long-term relief for hard-working Marylanders dealing with inflation and higher prices, and help create more jobs and more opportunity to continue our strong recovery.”
“The last two years of the pandemic have shown the cracks in our state’s civic infrastructure,” said President Ferguson. “As I’ve said since the beginning of the 2022 legislative session, everything we do must prioritize our state’s economy and the health of our residents. This historic agreement demonstrates that regardless of political party, leaders come together to deliver vital services and economic relief for families, seniors, and small businesses.”
“The House started this session with a clear goal of helping Marylanders left behind in the post-pandemic recovery,” said Speaker Jones. “This bipartisan agreement helps hundreds of thousands of seniors on fixed incomes who are struggling with inflation and puts families on a stronger footing as they buy necessities and pay for child care or college. The significant increase in capital spending, coupled with the Work Opportunity Tax Credit, will help Maryland businesses put more chronically unemployed Marylanders back to work.”
The bipartisan agreement also makes a one-time record $800 million investment in the Blueprint for Maryland’s Future while maintaining a record level in the Rainy Day Fund. Further, this agreement uses the surplus to make strategic and historic investments that:
- Support public safety and victims of crime;
- Ensure Maryland’s world-class health system by supporting hospitals, nursing homes, and assisted living facilities;
- Expand Medicaid dental coverage for adults, in-home medical care, and autism services;
- Help families by expanding access to child care, providing bonuses for public school staff, and increasing student aid at higher education institutions;
- Spur local economies and job opportunities through capital funds for school construction, affordable rental housing, state facility maintenance, and local transportation infrastructure; and
- Protect against the growing threat of cyber attacks.
This agreement follows bipartisan discussions that included Department of Budget and Management Secretary David Brinkley, Senate Budget and Taxation Committee Chair Guy J. Guzzone, and House Appropriations Committee Chair Maggie McIntosh.
Later this week, Governor Hogan, President Ferguson, and Speaker Jones will hold a bill signing ceremony for these measures.
Stay tuned to Conduit Street for more information.