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Final votes pending on tax breaks and ban of tax drones

Bryan P. Sears//March 18, 2016

Final votes pending on tax breaks and ban of tax drones

By Bryan P. Sears

//March 18, 2016

ANNAPOLIS — The Maryland Senate will take up votes as early as Monday on two bills that will help taxpayers but in different ways.

The Senate gave preliminary approval to a bill that would modestly reduce the top four personal income tax rates and expand a tax credit for low-wage earners on the same day they voted to gut a bill that would allow the use of drones for property tax assessments and turn it into a ban.

“None of these changes are dramatic but we’re trying to to make life better for everybody,” said Sen. Edward J. Kasemeyer, D-Howard and Baltimore Counties and chairman of the Senate Budget and Taxation Committee.

The reductions of 1 to 3 percent will mostly benefit those earning between $60,000 and $100,000; the lowest reductions will go to those earning more than $500,000, Kasemeyer said.

The top rate will decrease from 5.75 percent to 5.6 percent, phased in over 5 years. The personal exemption for the average taxpayer will increase by $200 over five years to $3,400.

The total package will reduce state revenues by $232 million annually once it is fully phased in by 2020.

A trigger provision would freeze the tax reductions should the economy soften or there is a shortfall in expected state revenues.

“We could have been more aggressive, but I think we were trying to be conservative in case things went bad,” Kasemeyer said.

Not all legislators are happy with all the reductions.

Sen. Paul G. Pinsky, D-Prince George’s County, noted that some of the reductions would benefit the state’s biggest earners, the so-called “1 percent.”

A recent report by Phoenix Marketing found that Maryland had the highest per capita rate of millionaires at 1 in 13 residents.

Kasemeyer noted that some of that wealth is the result of rising home values.

“This is a giveaway to the very wealthiest Marylanders, at the expense of everyone else. It can’t legitimately be called middle-class tax relief,” said Benjamin Orr, Executive Director, Maryland Center on Economic Policy, a progressive budget policy organization.  “Strengthening the Earned Income Tax Credit to help working people who struggle to get by on low wages is an important and welcome step that shouldn’t be paired with a tax break that gives the greatest benefit to millionaires.”

Tax Drone

The Senate also gave preliminary approval to an amended version of a bill that would have allowed the State Department of Assessments and Taxation to use aerial technology to assist with the inspection of properties that would be used to set the taxable value.

“Tax drones,” said Sen. Roger P. Manno, D-Montgomery County. “You can’t make this stuff up.”

The state in conjunction with local governments had used the technology on manned aircraft in a small number of counties but needed enabling legislation to move ahead with a statewide program.

Officials with the assessments agency said that budget cuts and less than adequate staff have thwarted efforts to personally inspect properties, which is done in three-year cycles. In the best-case scenario, the department is only inspecting about 27 percent of the more than 700,000 properties that are supposed to be reviewed annually.

The photography technique would allow the agency to build a three-dimensional picture of each home. That photo would later be compared to other photos as well as to building permits to determine if additions or other improvements had been made to a property. Those with changes would be flagged for a visit by an inspector.

State and county officials said that the bill did not specifically mention drones. Lawmakers, many of whom were angered over the use of the technology, said the bill would not prevent them from using unmanned technology.

But Democrats, led by Sen. Roger P. Manno, D-Montgomery, and Sen. Edward J Kasemeyer, D-Howard and Baltimore Counties and chairman of the Senate Budget and Taxation Committee, moved to prevent the program.

An amendment was added to Gov. Larry Hogan’s proposed fiscal 2017 budget that forbids the agency from spending money for aerial property surveys. Manno led the effort in changed the bill from one that would have enabled the agency to use the technology statewide into a bill that prohibits the practice.

Republicans tacked on an amendment that also stripped the ability of local governments to use the technology.

“What’s good for the cow is good for the herd,” said Sen. J.B. Jennings, D-Baltimore and Harford Counties and Senate minority leader.


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