By Justin Snow, Justin@MarylandReporter.com
A bill sponsored by Gov. Martin OMalley that would help save family farms and preserve Maryland agriculture by increasing farm estate tax exemptions met with little opposition in a hearing by the House Ways and Means Committee on Tuesday.
Perhaps not by accident, the hearing coincided with Farm Day in Annapolis. The committee heard testimony from a number of farmers and agricultural representatives, including OMalleys Secretary of Agriculture, Earl Hance, who testified on behalf of the governors bill.
It eliminates some of the stress that comes with generational transfer at a time when most farmers are land rich and cash poor, said Hance.
OMalleys proposed bill, which is nearly identical to two other bills being considered by the committee, would grant an exemption to the states estate tax for farms valued up to $5 million, under the agreement that the land remains agricultural. The legislation hopes to provide a safety net for family farms, which often face liquidation at the passing of a relative when the states 16% estate tax is imposed.
Moreover, the legislation would impose a 10-year recapture law, allowing the state to reclaim those tax benefits if agricultural land is used for other purposes within a decade of the owners death.
Some lawmakers voiced concerns that 10 years was not a long enough recapture period, citing that many farms have been in families for hundreds of years. But few were opposed to a measure that has been introduced repeatedly.
Snack tax opposed
That discussion was in stark contrast to a snack tax proposed by Del. Jay Walker, D-Prince Georges. The bill would collect the states 6% sales tax on foods like potato chips, pretzels, and cheese puffs. Such a law would generate $13 million annually for the general fund. Noting the growing problem of childhood obesity, Walker hopes to deter consumption of junk foods.
The bill faced fierce opposition from several members of the food and grocery industry, as well as conservative members of the committee. Del. Joseph Boeteler, R-Baltimore County, blasted the bill for attacking an industry that is putting out a legal product.
Opponents argued that when it comes to issues concerning obesity, preventive measures ultimately come down to education rather than taxation.
This is not the first time the state has considered a tax on snack foods. A similar law was enacted in 1991, but later repealed in 1997 after the opening of a Frito-Lay factory in Harford County.