ANNAPOLIS — Last-minute changes to a deal between the House, Senate and Gov. Larry Hogan threaten to delay, if not derail, a bill to provide emergency pandemic relief.
The bill was on the fast track to passage in the House and to possibly be on Hogan’s desk by the end of the day. Those efforts were stymied when members of the Latino Caucus pressed for individual payments to workers, many of whom are undocumented immigrants, who pay taxes using an Individual Tax Identification Number rather than a Social Security number.
“This amendment attempts to address a harmful, deeply harmful oversight in the bill,” said Del. Eric Luedtke, D-Montgomery and chair of the Ways and Means Revenues Subcommittee.
A day earlier, he told the same subcommittee that lack of such a provision represented “a flaw in this proposal” but told delegates a separate bill could be passed to try to address the issue.
Passing a pandemic relief package is a top priority for Hogan, House Speaker Adrienne Jones and Senate President Bill Ferguson.
The changes added by the House committee late Thursday afternoon would provide a direct stimulus payment to ITIN filers who would have qualified otherwise for the earned income tax credit but are ineligible because of federal law. Joint filers who resided in Maryland in the last two tax years would be eligible for a $500 payment. Individuals would receive $300.
“I believe we should help our neighbors,” Luedtke said.
The change caused some Republicans on the House Ways and Means Committee to question whether the late amendment broke a negotiated deal.
“Is it fair to say that by adding this to the bill and destroying the comity we all worked for for weeks and we all wanted to put COVID-19 relief first to help people, is it possible the proponents of this are risking delays or risking some of the relief they want … because they’re kind of going back on a deal and we’ve gone back on a plan we all agreed to?” asked Del. Jason Buckel, R-Allegany. “Does anybody have concerns?”
The House Ways and Means Committee voted Wednesday to amend the Senate version of the pandemic aid legislation, which Hogan dubbed The RELIEF Act of 2021 — The Recovery for the Economy, Livelihoods, Industries, Entrepreneurs and Families Act. The plan was to have the full House vote on the bill with a possible final vote coming early enough Thursday to send the plan back to the Senate for final approval.
The House reduced the cost of the Senate version from $1.5 billion to an estimated $1.2 billion.
Under the changes passed Wednesday by the full House Ways and Means Committee, workers eligible for the earned income tax credit would see a significant jump in their benefits for the next three years.
Under Hogan’s original plan, nearly $270 million in direct payments would go those eligible for the earned income tax credit. Families would receive $750 in additional payments while individuals will receive up to $450. A total of 40,000 people would be eligible, and no application would be necessary.
The House committee Wednesday approved language increasing the payment for a family with two children earning $25,000 per year to roughly $4,000 over the next three years in addition to the proposed instant payment.
Individuals who qualify would receive a $300 instant payment from the state as well as an additional $540 annually for the next three years, bringing the total state payment to more than $800 this year and nearly $2,000 over three years.
Hogan’s proposal, passed by the Senate, would have permanently exempted unemployment benefits from state income taxes.
The bill amended by the committee limits the tax exemption on those payments to two years. The panel is also recommending the exemption be means-tested based on income. An individual who earns less than $75,000 and families earning less than $100,000 in tax year 2020, including their unemployment benefits, would be exempted.
The bill also contains aid for utility and housing payments as well as for allowing some businesses to keep up to $9,000 in sale taxes; pandemic loans and aid to nonprofits would be forgiven.
Lawmakers have been working feverishly in concert with Hogan in an attempt to get the emergency legislation passed before Saturday, when the state and federal governments begin accepting income tax returns.
The committee Wednesday passed the legislation without including language that would have provided benefits to the ITIN filers.
But on Thursday members of the House Latino Caucus pressed for the addition, and the full House, which met in morning and afternoon sessions, delayed a vote on the bill.
Hogan, speaking to reporters, repeated his call for quick passage of the legislation.
“We were very pleased that the RELIEF Act passed unanimously in the Senate,” said Hogan. “We’ve been talking with the presiding officers for more than a month about this. This is emergency legislation that is desperately needed to put money in the pockets of individuals and small businesses that are in need. We’ve been working in good faith with the House and Senate on our shared priorities, and we were prepared to sign the bill into law so we can get started sending these out.”
He called the late changes a distraction and hinted that it could derail efforts to provide assistance to individuals and businesses.
“We just heard today, out of nowhere, that the House is proposing something which I haven’t even heard the details of yet,” said Hogan. “I can assure you that any attempts at distractions or delays will prevent this desperately needed relief from getting out to Marylanders. It’s an unfortunate occurrence. We hope that the Senate can talk some sense into the House. We look forward to getting this historic relief act through. If the House has some ideas about doing other things perhaps they should do that with a separate piece of legislation.”
The fate of the bill is uncertain.
The window for passing the legislation in the House Friday morning in time to have it in the Senate by noon when that chamber meets is rapidly closing.
It was unclear on Thursday night if there was support for the changes in the Senate, which unanimously passed the initial bill last week.
Still, some delegates expressed hope that Hogan will accept the changes rather than veto his own proposal.
“I don’t agree with the governor on a lot of things,” said Del. Jessica Feldmark, D-Baltimore and Howard counties, “but I have to believe that he has enough decency and humanity that he would not hold up this entire package over helping residents who feed us and take care of us and clean our offices and keep our society running.”