Howard County Maryland Blog

Local Politics and Current Events

Annapolis proposes a tax cut?

Posted by Ed C on Saturday, March 21, 2009

[Update] – Well it looks like I messed this one up. I misinterpreted the statement about the $60 million hit. This is just another confirmation that the state and county income tax revenues are going to be way down this year. Thanks to Warren Miller for the clarification. Ed C.

Original is below the fold if you really want to see how far off I was on this one.

Okay, stop laughing.  The House Appropriations Committee is trying to balance the Maryland State budget by passing the “costs” to local governments. Sure, the taxpayer (that’s you and me) will most likely end up paying more, but I guess that beats the elected legislators from actually making a tough decision.

All of the articles that I’ve been able to find have this little gem, without further explanation (this one is from the Examiner):

The other big hit to local jurisdictions came from a $60 million cut in income tax collections counties are allowed to take. Maryland has a so-called “piggyback” tax on the state income tax, which enables counties to take up to 3.2 percent in income tax from taxpayers.

According to the Comptroller of Maryland:

Maryland’s 23 counties and Baltimore City levy a local income tax which we collect on the state income tax return as a convenience for local governments.

How can the state cut $60 million from something that is only collected as a convenience? Are they proposing to reduce the rate? I thought this tax was set by the counties? I could have sworn that it was the County Executive James Robey that increased the rate by 30% to the maximum rate (3.2%) allowed. (Howard and Montgomery counties are the only two jurisdictions that levy at the maximum rate of 3.2%.)

According to the Baltimore Sun, Howard county is expecting a drop-off in income tax this year (the first time since 1964). And now the state is proposing to take even more.

Raising the sales, corporate and other taxes in the 2007 special session to close the “structural deficit”, receiving 3.8 billion in “stimulus” money this year and we still have a state deficit. At what point will Annapolis actually decide that reducing state spending is an alternative?

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