Governor Hogan held a press conference yesterday where he announced a $4.6 billion tax cut for retirees, small businesses, and lower-income Marylanders. The proposal would be funded through Maryland’s budget surplus.
From Governor Hogan’s press release:
“Next to our health recovery from the worst pandemic in more than a century, nothing is more important than our continued economic recovery,” said Governor Hogan. “With all of the important announcements we are making today, we are continuing our focus on delivering exactly what we promised—real, long-term relief to hardworking Marylanders, small business, and retirees, creating more jobs and more opportunity in every corner of the state, and continuing to lead the nation in economic recovery so that our state comes back even stronger and better than ever before.”
The proposed tax relief package would expand on the five-point framework that Governor Hogan announced last fall. The five-point framework includes “increasing the Rainy Day Fund, major tax relief for retirees, direct tax relief for Marylanders, additional relief for underserved Marylanders, and enhancements for state employees.”
From Governor Hogan’s press release:
The Retirement Tax Reduction Act will eliminate 100% of state retirement taxes in Maryland, providing $4 billion in cumulative relief to deserving retirees.
The Working Marylanders Tax Relief Act will make permanent the enhanced earned income tax credit (EITC) in the RELIEF Act of 2021. This bill would provide working families with another $650 million in cumulative tax relief.
Small Business Fee Relief. The governor will also propose legislation to eliminate the filing fees for businesses that submit their annual report online with the Maryland State Department of Assessments and Taxation (SDAT), including the $300 annual filing fee for companies, LLCs, and other legal entities, and $100 for family farms.
The More Jobs for Marylanders Act 3.0 extends the successful More Jobs for Marylanders program an additional five years, through 2027.
The Project Restore Act will codify and make permanent one of the state’s successful COVID-19 economic recovery initiatives, which provides financial assistance for small businesses and commercial developers to revitalize vacant retail and commercial space.
The Governor has not yet released an annual breakdown of the plan and how it would have a long-term impact on the state’s finances, something Democrats said they would need before they consider the proposal. Senator Guy Guzzone, chair of the Budget and Taxation Committee, is quoted by the Baltimore Sun as saying, “We’ve got a very unique opportunity this year to consider a lot of proposals and we’ll really give it all a fair look. We need to see the actual numbers on paper.”
Senate President Bill Ferguson and Speaker of the House Adrienne Jones were interviewed by the Baltimore Sun last week and neither ruled out considering tax cuts.
“There are opportunities to look at addressing tax burdens in the state, but it’s going to be very targeted and purposeful,” said Ferguson, a Baltimore Democrat. “We’re open to conversations.”
Jones, a Baltimore County Democrat, said she prefers “making critical upgrades” rather than agreeing to new long-term spending but indicated she could support a tax cut proposal that “helps those who need it most” rather than “those who already have the most.”
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