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Alexander Pyles tracks news from the State House

The Eye on Annapolis Podcast

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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.

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Category: General Assembly, Government, Same-sex marriage, Taxes

Tax credit evaluation bill returns to General Assembly

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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

Millionaire’s tax, combined reporting back again

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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

Poll: Most Marylanders oppose gas tax hike

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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

Maryland could tighten high-income tax exemptions

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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.

Category: Taxes

Poll boasts public support for alcohol tax increase

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A new poll commissioned by advocates of an increase to the state’s tax on alcohol found that 66 percent of Marylanders support the hike as a way to fund health programs.

Fewer people — 55 percent — said they support the increase if the funds were used to reduce the state’s $1.6 billion budget deficit. That finding signals an awareness among those pushing the initiative that the cash-strapped General Assembly could see the alcohol tax as a way to ease the state’s budget woes.

“Maryland voters overwhelmingly support the dime-a-drink alcohol tax increase because they know that it will save lives and help Maryland’s economy,” said Vincent DeMarco, president of the Maryland Health Care For All! Coalition.

Beer and wine excise taxes were set in 1972 — beer at 9 cents per gallon and wine at 40 cents. The liquor tax was last changed in 1955, when it was raised to $1.50 per gallon. The proposal pushed by the coalition would raise all three taxes by the equivalent of a dime a drink. Backers estimate it would raise $215.6 million in new revenue.

The coalition is pushing for those funds to be dedicated to programs for the disabled, addiction treatment, mental health and health care coverage for childless adults. But even without that funding, its supporters believe the alcohol tax bump will have public health benefits by reducing drinking.

The alcohol tax increase has gotten more traction than most other tax hikes recently, and promises to do so again in 2011. It will run into intense opposition, however, from alcohol distributors, wholesalers and retailers, a traditional Annapolis powerhouse.

Top elected officials have also said 2011 isn’t the year to raise taxes, though they haven’t ruled them out completely. Gov. Martin O’Malley has repeatedly said his budget will not include tax increases, but hasn’t said he would fight against any such measures approved by the legislature.

Category: Government, Maryland, Taxes

DeMarco calls Andy Harris’ health care stand “outrageous”

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Have you heard the one about the newly elected congressman who ran against the federal health care overhaul, then complained when he learned his government-subsidized plan wouldn’t kick in until a month after he was sworn in?

Vinnie DeMarco has. And he thinks it’s “outrageous.”

DeMarco is the president of the Health Care for All coalition that is pushing the dime-a-drink alcohol tax increase and the lobbyist who successfully pushed for the $1 increase in cigarette taxes in 2007. And the congressman in question is Andy Harris, the Republican state senator who defeated Democrat Frank Kratovil in Maryland’s 1st Congressional District.

Politico reported Monday evening that Harris “reacted incredulously” when told that his health care plan would not kick in until Feb. 1, nearly a month after he is to be sworn in. Harris ran against President Obama’s health care plan during the campaign, promised to work toward repealing the legislation and repeatedly lumped Kratovil in with Obama and House Speaker Nancy Pelosi, who was instrumental and shepherding the bill through Congress.

“For a month, he’ll be like 40 million other Americans,” DeMarco said Tuesday morning. “How can he with a straight face deny them health care while demanding government-subsidized health care for himself?”

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Category: Government, Maryland, Taxes

O’Malley on the offensive

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Gov. Martin O’Malley didn’t waste any time after Tuesday’s primary election.

The Democrat incumbent bought airtime across the state for a TV and radio ad attacking the credibility and record of former Gov. Robert L. Ehrlich Jr. as the votes were still being tallied.

The ad (which we’ve had trouble embedding; click here to watch it) features clips of Ehrlich discussing raising fees during his term, but not taxes, mixed in with people criticizing the distinction.

In a clip the ad uses twice, Ehrlich tells a questioner, “There’s a big difference between fees and taxes.”

A series of quick shots of people saying “It’s a tax” are mixed in.

“If it comes out of my pocket, it’s a tax,” another woman says.

“Typical politician,” a man says near the end of the 30-second spot.

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Category: election 2010, Maryland, Taxes

Early support for alcohol tax hike

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Health care advocates say they have 146 General Assembly candidates signed on to a proposal that would raise the state’s alcohol taxes by a dime a drink.

Their effort was unsuccessful during the 2010 legislative session, when lawmakers swore off tax and fee increases as economically and politically unpalatable.

But, the Maryland Citizens Health Initiative thinks 2011 will be their year. The next election will be four years off and the legislature will face another tough slog to find revenue to raise and costs to cut.

“I think the alcohol tax is going to happen,” said Vinny DeMarco, who heads the initiative and lobbied successfully for the cigarette tax increase in 2007. “The support in the legislature is reflective now of the support in the public.”

DeMarco’s plan would increase taxes on beer, wine and hard liquor the equivalent of a dime per drink to raise more than $200 million. The money would go toward developmental disability services, addiction treatment and prevention, mental health care and health insurance for childless adults — parents are covered under existing law.

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Category: Government, Maryland, Taxes

The ups and downs of stimulus accounting

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From May to August, it appears Maryland lost about $100 million, give or take, in stimulus funds.

Earlier this year, the state officials said Maryland was due $4.3 billion of the $787 billion stimulus spending package. But, when the state released its second quarter spending statistics, the award total was an estimated $4.2 billion.

So what gives?

That total allocation is “a moving target,” said Beth Blauer, who runs the governor’s StateStat office and oversees stimulus spending in the state. Wrapped into that big number — $4.3 billion or $4.2 billion, depending when you ask — are dozens of different types of funding and thousands of projects.

There’s money for home weatherization, road paving, teacher salaries, prison guards, water treatment plants and affordable housing projects, to name a few. Also included are federal matching dollars and extended funding for entitlement programs.

As the quarterly reimbursements come in for things like unemployment insurance and Medicaid — at more than $210 million in April, May and June, Medicaid was the largest single target of stimulus funding — the calculators whir in Annapolis and in D.C. and that bottom line “goes back and forth a little bit based on the entitlement dollars,” Blauer said.

So the $100 million drop from Q1 to Q2 means Marylanders needed less government assistance from the stimulus programs intended to help the needy and sick.

Not a bad way to lose $100 million, eh?

Update 4:13 p.m.:

The good people at StateStat have filled me in on the final numbers for the second quarter (which still includes a bit of guesswork on the future funding of entitlement programs) and the state’s allocation now sits at $4.36 billion.

So much for losing $100 million. In fact, by my count, we’re up. Just goes to show how much of a moving target those numbers are.

Category: DLLR, election 2010, Government, Maryland, Taxes, Uncategorized

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