A proposal to give counties more power over their local income taxes received preliminary approval in the House of Delegates on Thursday after Republican attempts to amend the bill failed.
House Bill 319, sponsored by Del. Julie Palakovich Carr (D-Montgomery) would allow local governments to impose local income taxes on a bracket basis, with a maximum rate of 3.2%. It would also require local governments to impose a minimum local income tax rate of 2.25%.
Maryland counties are currently required to levy income taxes at a countywide flat rate between 1% and 3.2%, according to an analysis of the proposal.
Del. Johnny Mautz (R-Middle Shore) and Minority Leader Nicholaus R. Kipke (R-Anne Arundel) introduced a pair of amendments that would’ve placed additional requirements on the legislation, but those proposals were rejected on the House floor.
Mautz’s amendment would have required a countywide referendum before income tax changes, and Kipke’s proposal would have prevented counties from increasing the income tax on residents with a higher income without also lowering the tax on those with a lower income. Kipke and Mautz argued that their amendments add accountability to the tax measure.
“This bill doesn’t provide any assurance that tax relief will be provided to struggling Maryland working families,” Kipke said.
Mautz argued that taxpayers should have the final say over their own local “piggyback” taxes. He worried that, without a local referendum, some taxpayers wouldn’t be aware of the change.
“The people who are paying this piggyback tax deserve the right to know that their piggyback tax is being changed,” he said.
Democrats, on the other hand, pushed back on putting too many strings on how local governments levy their taxes. Del. Jessica Feldmark (D-Howard) described the bill as “enabling” legislation, since local governments would be free to choose how they want to implement the tax.
Mautz’s amendment was rejected by a 42-94 vote, and Kipke’s by a 48-88 margin. The bill could come up for a final vote in the House on Friday.
Republicans vow to amend proposal that would expand tax credit to immigrants
A proposal to expand the Earned Income Tax Credit to thousands of taxpayers without Social Security numbers passed second reading in the House on Thursday, but not before Republicans renewed their objections over including undocumented immigrants taxpayers in the tax relief measure.
Senate Bill 218, sponsored Sen. Nancy J. King (D-Montgomery), was amended in the Senate last week to extend the state’s Earned Income Tax Credit (EITC) to people who file taxes using individual taxpayer identification numbers (ITIN). That broad group of taxpayers, which includes undocumented immigrants, student-visa holders and certain survivors of domestic violence, were left out of the state’s recently passed RELIEF Act.
ITIN filers have also been excluded from federal relief throughout the pandemic, since those aid programs require Social Security numbers. Democratic lawmakers and advocates have characterized the EITC as one of the country’s most effective anti-poverty programs, and say expanding that program to qualifying ITIN holders will help tax-paying families weather the pandemic.
Republicans in both the House and Senate have balked at the proposal, citing the proposal’s estimated $65 million price tag in 2021 and inclusion of undocumented immigrants. House Minority Whip Kathy Szeliga (R-Baltimore and Harford counties) pledged to have additional questions and amendments for the bill Friday.
The proposal to extend tax relief to ITIN filers was initially added to a state stimulus program in a last-minute amendment by House Democrats, but Republican objections threatened to hold up the fast-tracked bill’s progress. Instead, House Speaker Adrienne A. Jones (D-Baltimore County) and Senate President Bill Ferguson (D-Baltimore City) pledged to pass separate legislation to extend the EITC to ITIN filers.
The proposal would allow ITIN filers to receive the already expanded EITC for the 2020, 2021 and 2022 tax years. Palakovich Carr, the lead sponsor of the House version of the bill, said Tuesday that more than 86,000 ITIN filers paid more than $330 million in state and local taxes last year, including more than $100 million in income tax.
Immigrant rights groups say the proposal won’t just benefit ITIN holders, but people with Social Security numbers as well. Families with a mixed immigration status, where one spouse uses an ITIN and the other a Social Security number, are currently excluded from the EITC, CASA Director of Immigrant Integration Pablo Blank said at a Tuesday House Ways and Means Committee meeting.
He noted that, although many ITIN filers are essential workers, they’ve been without relief throughout the pandemic.
“COVID doesn’t discriminate,” he said. “It affects all Marylanders regardless of whether they pay taxes with an ITIN or a social security number.”
Republican attempts to amend the bill in the Senate failed: Senate Minority Leader Bryan W. Simonaire (R-Anne Arundel) attempted an eleventh-hour amendment that would’ve restored King’s child tax credit bill to its original language. As originally proposed, SB 218 would have created a refundable credit for the state’s income tax equal to $500 for each child dependent under the age of six or under the age of 17 with a disability. The credit would apply to taxpayers who make a federal adjusted gross income of $6,000 or less.
The Senate amended the proposal to extend the EITC to ITIN filers, and changed the proposed child tax credit by removing children under the age of six from the proposal but keeping the tax credit for children under the age of 17 with disabilities. Simonaire argued that Democrats should have attempted an entirely new bill rather than changing the child tax credit.
“Let’s take care of the most vulnerable in our state first,” Simonaire said. “And if you want to bring another bill back, you can deal with this. But we have to take care of those who are hurting the worst in our state first, before we start giving it to those who are unlawfully in our country.”
Whether or not the House Republican amendments will mirror Simonaire’s remains unclear. Szeliga said the proposals weren’t available in time for the second reading of the bill Thursday, but would be ready for the House’s Friday session.
Debate over county commissioner elections postponed
Heated debate over a proposal to change how several counties elect their commissioners continued Thursday, with Republicans attempting several amendments.
House Bill 655, sponsored by Del. Brian M. Crosby (D-St. Mary’s) would change the way five counties – Calvert, Charles, Garrett, Queen Anne’s and St. Mary’s – select their commissioners. Commissioners in those counties are currently elected by a countywide vote regardless of what district they’re from, a system that Crosby argues is “anti-democratic.”
Crosby’s proposal would require that, if a county commissioner is running to represent a specific district, the commissioner’s election must be decided by voters in that district.
Voting rights groups and other proponents of the bill argue voters of color are disenfranchised by those counties’ current systems, since their local vote is diluted by the countywide majority. Opponents, including local leaders and the Maryland Association of Counties, argue that the measure would infringe on local governments’ authority.
Del. Matthew Morgan (R-St. Mary’s), who previously delayed the bill so he could write up an amendment, brought forward a proposal that would have expanded the bill to include school board elections in counties where school board members run by district but are elected by a county-wide vote. That includes Montgomery, Queen Anne’s and St. Mary’s counties.
Morgan argued that, since proponents say the current system is undemocratic, every election should follow the same protocol.
House Majority Leader Eric G. Luedtke (D-Montgomery) urged Morgan to withdraw the amendment, and said he was drafting a bill that would address the same issue in school board elections. Morgan agreed to withdraw the amendment after a conversation with House Ways & Means Committee Chairwoman Anne R. Kaiser (D-Montgomery).
Del. Wendell R. Beitzel (R-Garrett and Allegany), a former Garrett County commissioner, introduced an amendment that would remove his home county from the proposal. He said the current proposal is “unfair,” and said he expects the county would switch to at-large, countywide elections if the proposal passed.
Morgan likewise argued that his county would switch to at-large elections if the bill passed. He put forward a separate amendment that would’ve switched St. Mary’s county to an at-large system for electing commissioners, but that proposal was rejected in a 45-93 vote.
Beitzel’s amendment remains pending after Wilkins requested the legislation be postponed for another day, given the number of proposed amendments.
Superintendent oversight measure passes
The House passed an emergency bill that would increase legislative oversight of the state superintendent of schools by requiring Senate confirmation. House Bill 465 would also create a one-year cooling off period before state school board members could be hired as state superintendent.
The state superintendent serves a four-year term and is currently appointed by the State Board of Education with no input from the legislature. There’s an ongoing search for the next state superintendent.
The bill passed 98-40 and moves on to the Senate, where there is no crossfile.
Access to menstrual products
House Bill 205, sponsored by Del. Kirill Reznik, was also approved by the House on Thursday. That bill would require public schools to provide free-of-charge menstrual products in middle and high school restrooms, beginning in October. The measure passed the House 93-43. A similar bill, with bipartisan sponsors, remains pending in the Senate.
Editor’s Note: This story was updated to correct the income tax brackets that counties could levy under House Bill 319. Amendments from the House Ways and Means Committee would keep the maximum at 3.2%, which is also the same maximum rate allowed under current law.
Danielle E. Gaines contributed to this report.
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Roundup: House Republicans Attempt Amendments on Local Tax, Election Measures – Maryland Matters - Josh Kurtz
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