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Comptroller Peter V.R. Franchot called on Gov. Larry Hogan and the General Assembly to refrain from major changes to state taxes or regulations for at least the next three years. (File photo)

Franchot’s plea for tax stability doesn’t appeal to some business leaders

ANNAPOLIS — The state’s top tax collector called on Gov. Larry Hogan and the General Assembly to refrain from major changes to state taxes or regulations for at least the next three years.

Comptroller Peter V.R. Franchot Tuesday said businesses in Maryland needs stability rather than “tinkering” every year during the legislative session.

“I’m not a big fan of cutting taxes right now,” said Franchot. “Let’s stay where we are and let’s manage our way forward.”

Franchot said a move to reduce taxes wouldn’t be prudent in light of fiscal challenges faced by the state.

“I’d love to cut taxes, I’m a politician,” Franchot said, adding that while he believes the state could be more competitive in its tax policy, cuts are not likely. “I don’t think it’s going to happen both on the merits and on the politics,” Franchot said.

Franchot’s comments were at a Maryland Chamber of Commerce roundtable discussion with leaders of small business, education and nonprofits that featured candid exchanges regarding  the business climate of the state and its tax and regulatory policies.

A number of business leaders disagreed with the comptroller, saying Maryland should do more to make its taxes competitive with other states.

“We have many, many, many examples of businesses who’ve looked at Maryland, whose decision makers see personally how much income tax they’re going to be paying, corporate-wise how much income tax they’re going to be paying, and Maryland doesn’t even make it to the short list of the three or so they are considering expanding in,” said Karen Syrylo, a certified public accountant with Altus Group.

Karen Syrylo. (submitted photo)

Karen Syrylo. (submitted photo)

Syrylo added that it’s common for her clients to come to her for advice about states to move to because of their concerns about high taxes.

“What we’re doing is losing those folks — losing their income tax, losing their sales tax, losing their property tax and the charitable contributions that they used to make,” Syrylo said.

Syrylo and others pointed to perennial legislation, such as combined reporting and mandatory sick leave, as bills that concern and even drive away prospective employers or business expansion.

Sen. Edward J. Kasemeyer, D-Howard and Baltimore County and chairman of the Senate Budget and Taxation Committee and member of the Augustine Commission reviewing the state’s business climate, acknowledged last week the damaging effects of some of those bills.

“I think we’ve got to understand politically that putting in bills constantly that threaten, that businesses look at as threatening to their existence, is something we should discourage,” Kasemeyer said.

The exchanges at the roundtable came only a few days after a legislative commission created by House Speaker Michael E. Busch and Senate President Thomas V. Mike Miller and led by Norman Augustine began a review of the state’s complicated tax structure.

The commission earlier this year made a number of recommendations that became law, including the creation of a commerce secretary and a panel to review how regulations might affect business in the state.

Franchot Tuesday suggested that instead of making changes to the state’s taxes or regulations, the governor and the General Assembly should instead focus on customer service and making consumers more comfortable with spending.

“There’s a lot of concern out there among our citizens,” Franchot said, citing a lack of confidence in the job market and other economic factors. “As a result, they’re not opening their wallets and spending in this state like we’re accustomed.”

The comptroller, who has a senior aide on the panel, said he respected Augustine and the commission even as he spoke against the potential of lowering taxes.

“We’re better-off focusing efforts on consumers,” Franchot said. “If we do that, the economy will take care of itself.”

 

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