If any employees working for the Comptroller of Maryland conducted themselves as some Internal Revenue Service employees apparently did, Comptroller Peter Franchot knows exactly how he would handle it.

“If something like this happens at my agency, I would fire any employee within a country mile of it,” Franchot said Tuesday. “When I walk into the Treasury Building, I check my politics at the door.”

U.S. Attorney General Eric H. Holder Jr. on Tuesday announced there would be a criminal investigation of the IRS’ apparent targeting of conservative groups seeking tax-exempt status.

Good, Franchot said.

“It is incomprehensible to me that just a small number of low level bureaucrats were responsible for this,” he said. “It’s really distressing for me to read about this.”

The comptroller — Maryland’s tax collector — said the IRS ought to be the one government agency in no way entangled in politics. If citizens begin to doubt that, it would be “incredibly unfortunate.”

“I take it personally, because that’s the responsibility I have,” Franchot said. “It’s the one agency that needs to be beyond reproach … We would fire anybody and everybody.”

Powered by Bookmarkify™

The Eye on Annapolis Podcast returns with a look back at a busy weekend in the House of Delegates.

Alex and I discuss the latest on the gun control and transportation bills and whether lawmakers will be able to resolve the major sticking points in the bills in the General Assembly’s final two weeks.

We also examine the prospects of tax increment financing (better known as TIFs) and reveal the man behind the medical marijuana bill.

Enjoy.

Powered by Bookmarkify™

Maryland Comptroller Peter Franchot, who has made his opening statements at bimonthly Board of Public Works meetings can’t-miss political theater for at least the last year, returned to a favorite topic Wednesday morning: handicapping Maryland professional sports.

“I’m making plans for an I-95 Super Bowl between the Redskins and the Ravens,” said Franchot, who in March predicted the Washington Nationals would make the World Series while offering more tepid support for the Baltimore Orioles.

He reminded those in attendance Wednesday of his Major League Baseball predictions but admitted he did not foresee both of Maryland’s National Football League teams making the playoffs. (The Washington Redskins play their home games at FedEx Field in Landover.)

The first round of the NFL playoffs begins this weekend. The Ravens will host the Indianapolis Colts on Sunday at 1 p.m., while the Redskins will host the Seattle Seahawks at 4:30 p.m. The teams would have to win Sunday and then twice more to meet in the Super Bowl in New Orleans on Feb. 3.

It’s unclear whether Franchot’s endorsement is a good sign for fans of the Ravens and Redskins. Both the Orioles and the Nationals made the playoffs after years of ineffectiveness, but neither advanced past the second round.

What is clear is that having two teams in the NFL playoffs is good for the state coffers, Franchot said, because the teams’ success has put consumers in high spirits.

“Trust me, I can see it in the sales tax revenue,” he said. “People feel better.”

Powered by Bookmarkify™

Crews have begun filming HBO‘s second season of White House comedy “Veep” after a successful first season producing the show in Maryland.

Julia Louis-Dreyfus as Vice President Selina Meyer (Photo: HBO)

But the show’s future success in the state may depend on the longevity of a film production tax credit, which will expire in July 2014.

The Film Production Employment Act of 2011 makes up to $7.5 million in tax credits available to film and television productions in the state. The Department of Business and Economic Development administers the credit, which should put 27 percent of film production costs for “Veep” back into producers’ pocket.

Film industry advocates say shows like “Veep” would not come to Maryland without the tax break.

DBED cannot award the credits past July 2014, though, and an attempt to extend the tax credit in this year’s General Assembly session never reached the floor of the House of Delegates after being approved 46-0 in the Senate.

The bill, SB 1066, was sponsored by Sen. Edward J. Kasemeyer, D-Baltimore County and Howard, and increased the amount of total annual credits to $22.5 million while extending the program to July 2016.

DBED estimates “Veep” will have an economic impact of more than $40 million in its second season. Almost 1,000 crew, actors and extras were hired for the first season of the show, which stars former “Seinfeld” actress Julia Louis-Dreyfus.

Powered by Bookmarkify™

A report released Tuesday by the Cato Institute names the best and worst governors for economic growth.

And while Maryland Gov. Martin O’Malley avoided a failing grade — five governors received an “F” — the second-term head of state is only barely passing, by Cato’s standards.

O’Malley, by presiding over a bevy of tax increases since taking office, received a “D” in the institute’s report, eight points worse than his frequent sparring mate, Virginia Gov. Bob McDonnell, a Republican whose policies earned him a “C.”

Of the 16 governors to earn a “D” or worse, 12 were Democrats. All five who received failing grades were also Democrats, while the four governors who earned an “A” grade, including Pennsylvania Gov. Tom Corbett, were Republicans.

In commentary published by The Wall Street Journal on Tuesday, Cato tax policies Director Chris Edwards singles out business taxes as a much-needed area for reform in federal and state government.

“The Council on State Taxation found that state and local levies on businesses totaled $644 billion in 2011, or more than double the annual cost of the federal corporate income tax,” Edwards wrote. “True, the federal corporate tax rate is too high relative to other countries’ and is hurting American competitiveness. But business property taxes, sales taxes imposed on business purchases, and myriad other anti-investment levies imposed by state and local governments also impede economic growth.”

Read the rest of this entry »

Powered by Bookmarkify™

Daily Record columnist and WYPR Senior News Analyst C. Fraser Smith joined me Monday to examine the prospects for a referendum on the same-sex marriage bill, preview Tuesday’s workshop on prisoner reentry and discuss the holding pattern that has become the budget process. Enjoy.

Audio clip: Adobe Flash Player (version 9 or above) is required to play this audio clip. Download the latest version here. You also need to have JavaScript enabled in your browser.

Powered by Bookmarkify™

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.

Read the rest of this entry »

Powered by Bookmarkify™

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.

Powered by Bookmarkify™

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.

Powered by Bookmarkify™

House Speaker Michael E. Busch said Tuesday he did not see “a whole lot of proposals to increase taxes” in the Gov. Martin O’Malley’s upcoming budget proposal.

“We talked about adjusting some of the exemptions that currently exist in the law, particularly on high earners,” said Busch, D-Anne Arundel, after a meeting with O’Malley and legislative leaders that lasted more than an hour.

The governor’s budget will also seek to shift some of the cost of teacher pensions to the counties, Busch said, but would also “give the counties revenue opportunities to make up the difference.”

The speaker said O’Malley’s budget includes an increase of $108 million in K-12 education funding for a total of about $6 billion.

“It’s a huge investment,” he said. “Almost half of our budget goes to education and higher education.”

Busch said the group discussed transportation funding, but said “there was no specific proposal.”

Raquel Guillory, the governor’s spokeswoman, said transportation funding, including a gas tax hike, is still being discussed, but would not be part of the governor’s budget proposal on Wednesday.

Senate President Thomas V. Mike Miller Jr. said earlier Tuesday that he likes where the governor is headed on that issue.

“We’ve talked about the numbers back and forth,” said Miller, D-Calvert and Prince George’s.

Powered by Bookmarkify™