By Len Lazarick, Len@MarylandReporter.com
A Senate committee voted on four of Gov. Larry Hogan’s tax relief proposals Friday, significantly scaling back three of them and outright killing a fourth.
Average taxpayers will see little to no immediate effect of any of the measures as passed by the Senate Budget and Taxation Committee.
PERSONAL PROPERTY: The committee did vote to cut personal property taxes for small businesses with less than $10,000 of physical assets, but the relief won’t happen for two years.
AUTOMATIC GAS TAX HIKES: Hogan’s proposal to stop automatic gasoline tax increases passed two years ago was stripped from SB589, but the committee did vote to limit increases triggered by the Consumer Price Index to 3%, rather than 8% cap in current law.
With inflation still under control, the CPI is not expected to go above 2.5% in the near future, a legislative analyst told the committee.
“It goes up, but it never goes down,” said Sen. George Edwards, R-Garrett. But he conceded the new CPI cap “is better than what’s in there.”
MILITARY PENSIONS: A proposal to totally exempt all military pensions from taxes over four years was replaced with a plan to increase the current exemption of $5,000 in retirement pay to $10,000. This tax exemption for military retirees has passed the Senate in past years, but died in the House Ways & Means Committee, according to its main sponsor Sen. Doug Peters.
FIRST RESPONDER PENSIONS: The Hometown Heroes Act, SB594, a bill to exempt up to $29,000 of the pensions of police, firefighters and other first responders, was defeated based on its cost — $3 million next year rising to $11 million in fiscal 2020. This applies to any first responder retiring over age 50. In Maryland, anyone over 65 has a state income tax exemption on pension income up to $29,000, the maximum Social Security benefit.
Four senators opposed the committee’s unfavorable report on this administration bill: Sens. Addie Eckardt, R-Dorchester; Edwards; Andrew Serafini, R-Washington; and Roger Manno, D-Montgomery, who had sponsored his own version of the hometown heroes bill before Hogan introduced his.
RAIN TAX: The Senate has already passed its own version of Hogan’s repeal of the so-called “rain tax,” a stormwater remediation fee. But even if a county actually repeals a tax to fund treatment of polluted stormwater in an effort to meet a federal mandate to clean up the Chesapeake Bay, the county must still submit a plan to remediate stormwater and the money to pay for it.