Tax credit evaluation bill returns to General Assembly

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.

“But, he said, “some of them just float off, on their own, and you never really know who’s accessing them, how much and what the benefit is.”

The Daily Record examined the issue in December.

Maryland has 341 tax breaks woven into its tax code, but doesn’t examine the benefits of nearly all of them. And in 157 cases, the state isn’t even sure how much the tax breaks cost in terms of lost tax revenue.

Business groups fought against Frick’s effort last year, arguing the provision that would put expiration dates on credits — lawmakers could reauthorize them — would create too much uncertainty for the companies that rely on them. The bill passed the House but died in the Senate budget committee in the waning hours of the legislative session.