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The Daily Record tracks news from the State House

Tax credit evaluation bill returns to General Assembly

By: Nicholas Sohr

An effort to shed more light on a small slice of the billions of dollars in tax breaks that Maryland doles out every year is back, revived by a pair of Montgomery County lawmakers.

Sen. Richard S. Madaleno Jr. introduced The Tax Credit Evaluation Act on Tuesday. And Del. Bill Frick, the architect behind the effort, said he’ll drop twin legislation in the House of Delegates as soon as Wednesday.

The bills would require General Assembly committees to review a handful of tax credits every five years to determine if the state should continue to offer them.

The reviews would look at the intent of the tax credits, whether they are actually meeting those goals and whether the tax revenue lost the state is worth it.

“We have to find a way to systematically review our tax credits. You put things in to address a specific need or policy goal and they stay on the books forever, said Madaleno. “We should have some way to periodically review all of these programs to see if they’re serving their intended purpose, and to see if they’re still affordable or worthwhile.”

Madaleno, who serves on the Senate Budget and Taxation Committee, said that lawmakers deal regularly with some tax breaks that are funded through the state’s budget.

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Category: Taxes

The Eye on Annapolis Podcast

By: Nicholas Sohr

The State of the State address is behind us as we enter the fourth full week of the 2012 legislative session.

Lawmakers are already tackling the same-sex marriage issue and are waiting to see Gov. Martin O’Malley’’s gas tax proposal. They know he will call for the 6 percent sales tax to be applied to gasoline, but a key piece of the legislation remains unknown — how O’Malley wants to protect the Transportation Trust Fund from budget-balancing raids. Ethics reform and gambling are also on the docket this week. Listen up.

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Category: General Assembly

Maryland health care exchange could see 360k customers in year two

By: Nicholas Sohr

Some 180,000 people could buy health insurance through a state-run exchange in 2014 and that figure could double the following year, Maryland health officials told a Senate committee Thursday.

Gov. Martin O’Malley’s administration is backing legislation to firm up more aspects of the exchange mandated by President Barack Obama’s Affordable Care Act. Determining the way the state will pay for the exchange, however, will wait until next year, the officials said.

Rebecca Pearce, executive director of the Maryland Health Benefit Exchange, said initial estimates indicate the exchange would cost $30 to $40 million to run in the first year and between $45 million and $60 million in the second.

The exchange’s board of trustees recommended the state examine both “broad-based” health industry fees and transaction-based “user fees” to pay for the exchange.

Maryland officials expect to receive federal dollars to run the exchange in 2014. The system must be self-sustaining in 2015.

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Category: General Assembly

O’Malley highlights transportation projects

By: Nicholas Sohr

Gov. Martin O’Malley outlined his transportation funding initiative Monday, and Tuesday he began tying his proposal to specific road, bridge and transit projects around the state.


Throughout the day, administration officials revealed through email blasts — every half hour, starting at noon — and posts on the governor’s blog “projects that could be impacted” in all 24 local jurisdictions.

They also mounted posters showing schematics, renderings and photos of the projects between the galleries above the Senate and House of Delegates, in the hallway through which dignitaries will travel on their way to Wednesday’s State of the State address.


The projects include the Red Line in Baltimore City, development around the Martin State MARC station in Baltimore County, widening Route 32 in Carroll, a MARC line extension through Cecil and improvements to an intersection in Anne Arundel.

The promise of funding for local projects will likely be key to winning votes for O’Malley’s proposal.

For the last two years, House Speaker Michael E. Busch, D-Anne Arundel, said the support of local political leaders in vote-rich Howard, Montgomery and Prince George’s counties and Baltimore City will be critical.

“If you believe they’re going to vote for it and not expect to get projects, you still believe in Santa Claus,” the speaker told a Maryland Economic Development Association conference earlier this month. “That’s the way it works.”

Senate President Mike Miller said Tuesday the sales tax on gasoline will be “a tough sell.”

The proposal would phase in over three years, adding about 6 cents to a gallon of gas a year, based on Tuesday’s statewide average of $3.50.

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Category: General Assembly

Senate moves to exempt Maryland family farms from estate tax

By: Nicholas Sohr

A bipartisan group of Senate leaders is backing legislation that would exempt family farms from Maryland’s estate tax.

“When someone who owns a farm passes, so often the farm is lost to congestion, to sprawl,” said Senate President Thomas V. Mike Miller Jr., D-Calvert and Prince George’s.

The Senate’s bill will exempt up to $5 million in agricultural property passed to a “qualified recipient” who will use the property for farming purposes.

If the property is sold and not used as a farm within a decade, the estate tax would then have to be repaid.

Senators said too often, family members who inherit farms are forced to sell off pieces of their land to pay the estate tax bill.

“I hear this from a number in the industry, that they’re land rich but cash poor,” said Senate Majority Leader Rob Garagiola, D-Montgomery.

Garagiola, who is running for the 6th Congressional District seat in Western Maryland, was joined in promoting the bill by Sen. David R. Brinkley, a Republican who has also thrown his hat into that race.

“The best farm preservation tool we have is anything that makes farming profitable,” said Brinkley, R-Carroll and Frederick.

Gov. Martin O’Malley, a Democrat, has said he will propose a similar measure to defer estate taxes on family farms until they are subdivided or developed.

The bill was not part of the legislative agenda the governor rolled out on Monday, but his administration has said it will be coming soon.

Category: General Assembly

Millionaire’s tax, combined reporting back again

By: Nicholas Sohr

Two proposals that consistently rankle business interests big and small in Annapolis resurfaced Wednesday for their annual appearance in the State House.

They are, of course, the millionaire’s tax and combined reporting. (S.B. 249 and S.B. 269, respectively, if you’re keeping score at home.)

Both are viewed by liberal lawmakers as untapped revenue streams that could be used to ease the state’s persistent fiscal woes.

The millionaire’s tax would raise the individual income tax to 6.25 percent for people who make more than $1 million a year. Business leaders argue that the tax rate – it was passed in 2008 and expired in 2010 – make the state unfriendly to top earners and is unfair to small businesses that file tax returns as individuals.

Combined reporting is a way of assessing corporate taxes based on an apportioned share of company’s revenue nationwide. The goal is to stop companies from stashing revenue in states with lower tax burdens.

Both bills have made frequent appearances in Annapolis in recent years and have failed to gain traction as business groups have fought to keep them from emerging from tax committees in both chambers.

There does not appear to be any more interest in the proposals this year, but with a $1.1 billion budget gap looming and a host of already unpopular balancing measures pushed by Gov. Martin O’Malley, the bills are worth keeping an eye on.

Category: General Assembly, Taxes

O’Malley meets with his tweeps

By: Nicholas Sohr

Gov. Martin O’Malley held his first “Tweetup” Monday morning, fielding a handful of questions from 16 Twitter followers who met in person to discuss issues in the state.

“We have an opportunity in these times to be better connected than ever before,” O’Malley said, kicking the event off.

The questions ranged from softballs — “What book are you reading now?” was the first one — to specific policy questions, like whether libraries would also have to shoulder a share of pension costs along with the counties.

O’Malley said that issue, along with how school funding requirements would be affected by the proposed pension shift, are yet to be decided.

The governor said the state has a “tremendous opportunity” this year to bring in tourist dollars associated with the bicentennial of the War of 1812, an event that could also help clean up Baltimore’s image.

“You have to talk about the good things happening in the city,” O’Malley said. “It’s not a good way to sell newspapers, but it’s a good way to sell the city.”

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Category: General Assembly, Government

Coin show threatens to leave Baltimore over O’Malley budget

By: Nicholas Sohr

The general manager of three annual coin shows in Baltimore threatened to move the events to another state following a proposal by Gov. Martin O’Malley to eliminate a tax break for sales of precious coins and bullion.

David Crenshaw, general manager of Whitman Coins and Collectibles Expo LLC, said the measure included in O’Malley’s budget would “result in significant loss of economic benefit to Maryland and Baltimore since our three shows would most likely move to a friendlier state with no sales tax.”

“Other attractive cities have been anxious to host the national shows due to their overwhelming success in generating economic benefits to city businesses,” Crenshaw wrote to The Daily Record on Thursday.

O’Malley included the proposal to close the precious coin sales tax loophole in the budget he outlined Wednesday. The budget, and the closure of the loophole, still face legislative changes.

The Daily Record wrote extensively about the precious coins tax loophole and the billions in tax breaks the state gives away every year. The tax break in question exempts sales of coins and bullion of more than $1,000 from the sales tax.

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Category: General Assembly

Poll: Most Marylanders oppose gas tax hike

By: Nicholas Sohr

More than three-quarters of Marylanders oppose proposals to raise the state’s gasoline tax, according to a study released Wednesday.

Some 76 percent of voters oppose raising the tax by 10 cents, according to the poll conducted for the Mid-Atlantic Petroleum Distributors Association by Gonzales Research and Marketing Strategies Inc.

A gas tax hike was viewed favorably by 23.1 percent.

Gov. Martin O’Malley is expected to announce a package of tax and fee increases to raise more money to spend on transportation.

Opposition to the gas tax hike — the state’s gas tax has been 23.5 cents per gallon since 1992 — is widespread

Some 90 percent of Republicans oppose raising it 10 cents, as do 68 percent of Democrats and 74 percent of independents.

All but a handful — 96 percent — oppose indexing the gas tax to inflation to allow for automatic increases without legislative approval, and 84 percent strongly oppose such a measure.

Only 3 percent came down in favor of automatic gas tax increases.

“This survey confirms what we hear from our customers on a daily basis,” said MAPDA president Peter Horrigan. “Gas prices are too high and now is not the time to raise fuel taxes causing us to pay more.”

The telephone poll of 808 registered voters was conducted from Jan. 9-15. The margin of error is 3.5 percent.

Category: General Assembly, Taxes

Wait, what’s that number?

By: Nicholas Sohr

Gov. Martin O’Malley unveiled his fiscal 2013 budget proposal in an hour-long press conference complete with a three-page news release and 38 PowerPoint slides that left members of the media swimming in proposed cuts, taxes and spending figures.

One number, however, never made an appearance. The big one. The actual size of O’Malley’s proposed budget.

The answer can be found on page 7 of the budget highlights book  – more of a Patriots blue this year as opposed to Ravens purple last year.

The budget proposed by O’Malley contains $35.9 billion in spending, up 3 percent from the $34.8 billion budget for fiscal 12.

Category: General Assembly

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