ANNAPOLIS—Gov. Lawrence J. Hogan Jr. made good on his promise to introduce tax relief in his first term in office.
The Republican governor announced proposals, some of which are similar to bills already working their way through the legislature, to reduce the personal property taxes for businesses, eliminate the automatic increases to the state’s tax on motor fuel, and eliminate taxes on retirement income for some residents.
The proposals were part of a 10-point agenda revealed during a nearly 30-minute speech in which the newly-minted Republican governor described the state in sometimes unflattering terms.
“No state can match the beauty of the Chesapeake Bay, our beaches and farms, or the mountains of Western Maryland, the Port of Baltimore, or the historic charm of every corner of our state,” Hogan said. “But while our assets are many, and our people are strong and hopeful, their state is simply not as strong as it could be — or as it should be. We have a lot to do, to get Maryland back on track and working again.”
Hogan reached back to some of the touchstone issues of his campaign: taxes, foreclosures and a lagging state economy with businesses and residents he said have flown the state.
“We fail all Marylanders if we simply accept these dismal facts as the status quo,” Hogan said. “I refuse to accept the status quo, because the people of Maryland deserve better.”
The speech was Hogan’s first pass at laying out his agenda for the balance of the 90-day legislative session. His 10 points touched on tax relief, education, the environment, substance abuse and transportation, including:
- Repealing the state’s requirement that several counties enact a tax to pay for stormwater pollution reductions, more commonly called the rain tax by Hogan and others. However, counties would still be required to abide by the federal mandate and would need to find some way to pay for the program.
- Exempting police, firefighters, military and other first responders from paying taxes on retirement income.
- Exempting small businesses from paying personal property taxes on the first $10,000 of property. That tax is paid directly to local jurisdictions. Republican legislators said Hogan has included nearly $7 million in his budget to offset the loss of revenue to counties.
- Repealing automatic increases in the gas tax, similar to a bill proposed by Sen. James Brochin, D-Baltimore County.
- Providing tax credits to residents who make voluntary contributions to private schools.
- Restoring funding to the public campaign financing program, which Hogan used to win his election in 2014.
Hogan said he would also introduce legislation in the coming week that would make it easier to start and operate a charter school in Maryland.
Calling his agenda ambitious, the governor recognized philosophical differences between himself and a legislature controlled by Democrats. He vowed to work with the opposition.
“I am prepared to create an environment of trust and cooperation, one in which the best ideas rise to the top based upon their merit, regardless of which side of the political debate they come from,” he said.
But Hogan drew a clear line he said he would not cross.
“Budget choices are never easy, and you may have different ideas and solutions,” Hogan said. “And we look forward to hearing them, and to working together with you to find common ground — as long as those solutions don’t include increasing taxes, spending more than we take in, or going further into debt.”
The speech contained applause lines for House and Senate Republicans who stood more than a dozen times. Democrats sat mostly silent, save for some applause when Hogan announced a forthcoming executive order pertaining to the growing problem of heroin addiction in all corners of the state.
Following the speech, Democrats expressed disappointment and in some cases irritation at Hogan’s agenda and his description of the state.
Senate President Thomas V. “Mike” Miller, a long-time friend of Hogan, said he was disappointed with the speech and described it as hollow campaign rhetoric, full of promises “he knows he can’t keep,” given the constraints of the state budget.
“Campaigns are over and not it’s all about what’s doable,” Miller said following the speech. “Maybe he’ll grow into the job. I hope he will. I hope he’ll understand what’s doable and he’ll tell the truth to the people.”
In the House, Speaker Michael E. Busch said other Democratic legislators were disappointed with Hogan’s continuing characterization of the state.
“I think all you had to do was look at the faces of the people in the Democratic party that came through a tough recessionary period when Wall Street had failed and (legislators) had to make the tough decisions to continue to fund their education system and take care of Maryland’s most vulnerable — children and senior citizens,” Busch said. “It’s very hard to do that and they made the tough decisions in not only cutting the budget but also raising revenue.
“I think they thought he was speaking down to them,” Busch said. “The general tone for the vast majority of the Democrats was not well-received.”