Del. Eric Bromwell Supports Tax and Fee Relief

Before the 2016 General Assembly was gaveled into session, Governor Larry Hogan proposed his plan for $400 million in tax relief over the next 5 years for Maryland citizens, businesses and manufacturers. The plan includes:

• Increasing the Earned Income Tax Credit for families whose annual income is less than $53,000 a year, saving them $27 million over the next two years.

• Increasing the personal tax exemption for seniors, 65 and older, from $1,000 to $5,000 over the next 5 years, netting 640,000 seniors $183 million.

• Rolling back increases in more than 100 different fees to save taxpayers $51 million.

• Eliminating the state's 8.25% corporate income tax for 10 years to encourage new manufacturers to bring jobs to Western Maryland, the Eastern Shore and Baltimore City.

It should be noted that Maryland ranks 41st among the states in providing a positive business climate. I don't have to tell you that's not good. Perhaps Governor Hogan's proposed tax incentive will help the state's unfriendly business image improve. Moody's, one of the three bond rating houses, reveals that Maryland citizens pay 3.5 cents of every dollar earned to state or local income taxes. That's two-thirds higher than the national average of 2.1 cents and a penny higher than similar East Coast states.

Governor Hogan has stated that he wants to roll back some of the state's spending formulas for schools, public safety, etc. which dictate annual spending increases. In fact, 83% of budget spending is based on these formulas. I never did think it made much fiscal sense to automatically increase spending in any area in the middle of shrinking revenue or an economic downturn. It should be pointed out that during the 2008 recession and thereafter, the General Assembly has made one-time changes in the formulas because that was the only sensible thing to do. Otherwise, these mandated formulas might as well be carved in stone.

But it cannot be denied that they take away flexibility for both the Governor and the Legislature to craft sensible spending plans. Nevertheless, I fear the Governor will have a fight on his hands from the Legislature when he tries to tweak these mandated formulas.

As of today, I have signed on as a co-sponsor to several of the Governor’s bills that are looking to change this atmosphere. As you may already know, I have also spent my entire career in Annapolis opposing these unnecessary tax and fee increases. I am proud to support Governor Hogan on these initiatives.