Fiscal Briefing Highlights Budget Big Picture

The Department of Legislative Services (DLS) today presented its annual fiscal briefing to the General Assembly budget committees. This briefing provides a comprehensive overview of the Governor’s proposed FY 2021 operating and capital budgets, aid to local governments, and the State’s economic and revenue outlook. The Quick Look at Fiscal 2021 Budget shows that the Governor’s proposed budget leaves a general fund balance of $414.4 million at the end of fiscal 2020 and $108.5 million at…

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Governor Hogan Proposes $1 Billion Tax Cut for Retirees

Governor Larry Hogan yesterday unveiled a proposal to cut taxes for retirees by more than $1 billion over the next five years. “People who have been lifelong Marylanders and have contributed so much, and still have more to offer, are moving to other states for one reason—our state’s sky-high retirement taxes,” said Governor Hogan. The bill would eliminate all state tax on the first $50,000 of income for retirees making up to $100,000 in federally…

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General Assembly Will Again Consider Carbon Tax

The Maryland General Assembly will again consider legislation that adds a tax on greenhouse gas emissions with a goal of zero emissions by 2040. The bill sponsors say Marylanders are already paying for pollution through costs associated with damage to public health and the environment.  “Our Children’s Future Act” will be introduced by Delegate Fraser-Hidalgo and Senator Kramer during the 2020 session. This will be the third time carbon tax legislation is introduced in the…

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New Jersey Enacts SALT Cap Workaround for Small Businesses

New Jersey Governor Phil Murphy signed legislation Monday giving small businesses in the Garden State a workaround for the cap on state and local tax deductions (SALT) under the Tax Cuts and Jobs Act (TCJA) -- the 2017 federal tax overhaul that capped SALT deductions at $10,000 – a move of particular import in states like Maryland. This bill permits pass-through businesses, including S corporations, limited liability corporations, and other business partnerships, to shift the…

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When Do State Tax Changes Spill Over Into County Budgets?

As the 2020 session ramps up, talk of state tax changes have filled the headlines. A level deeper, though – what state tax decisions might have direct or carryover effects on county budgets? A quick primer: PERSONAL INCOME TAXES The state income tax is the top source of general revenue, and the biggest overall target for policy changes. Since county tax rates are independent of the state rates – counties are affected by some state…

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Kirwan “Chatter” Already In High Gear

As the General Assembly session nears, school funding is looming as the top issue for legislators and their new leadership teams. Public discourse is already raising multiple angles on the ambitious plan and its road ahead. The Kirwan plan, a multi-year proposal to ramp up funding and expectations for "world class schools," is already dominating the legislative discussion - even as the session hasn't kicked off. MarylandReporter.com has a thorough summary of these issues, including…

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General Assembly to Consider Sports Wagering Proposal

The State’s fiscal picture, and a pending commitment to substantial new education investments, has driven talk of authorizing new activities that carry substantial new revenue potential. The Maryland Department of Legislative Services last year estimated that legalized sports wagering in Maryland could generate annual revenues of $35.6 million. The U.S. Supreme Court last year struck down a 35-year-old federal law that banned sports betting in most states – opening the door for Maryland to authorize,…

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IRS Revamps Free File Program, Nixes Noncompete Agreement with TurboTax

The Internal Revenue Service (IRS) this week announced an agreement with Free File, Inc. (FFI) designed to bring more clarity for taxpayers choosing to use free online software during the 2020 filing season. According to the IRS, the new agreement will help make the Free File program more taxpayer-friendly while strengthening consumer protections in several key areas. The Free File program is a partnership between the IRS and tax-preparation companies to provide free tax-filing software…

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