Despite the fact that all of the legislature’s committee hearings are virtual again this year, that hasn’t slowed down Annapolis and they have been busy introducing legislation. I think it’s a race between the House of Delegates, who have introduced 543 bills and the Senators, who have introduced 541!
All in just 16 days, and we have 74 more days to go! To be fair, it will slow down in a few weeks, so the bills can be heard in committee, and then for those bills that pass, they will move to the full floor of each body for an up or down vote. If a bill passes there and hasn’t already been “cross-filed” it moves over to the other body for debate and a vote. Proposed legislation must pass both the House and Senate before it is presented to the Governor for passage or a veto.
MACo has held three legislative committee meetings, and we have discussed 55 bills to date. There are some that are similar to bills that MACo took positions on in past years. So, it is helpful to be a veteran of the committee to be able to more quickly understand the impacts of the proposed legislation and make an informed decision.
I am going to focus this week on the bills that really affect our businesses. There are some that are good and some, not so much. Government needs to do what we can to help support business especially small ones that have been harmed by the pandemic for the past two years and then there are times that government needs to get out of the way.
HB 268 “Property Tax – Exemptions for Business Personal Property” is a bill that MACo took an unusual position on. Normally, when a bill is introduced in which the State proposes a subtraction modification to the income tax or property tax, we will oppose it with a statement that says that the State should consider issuing a “State Tax Credit” instead. From our statement “The General Assembly routinely considers broad or targeted tax incentives to stimulate economic growth, encourage beneficial activities, or attract and retain residents. These proposals sometimes focus exclusively on the state’s tax structure, but often extend to local revenues as well.” When the State is making policy decisions that directly affect the counties and reduces one or both of our only two main sources of revenue, we need to guard this local autonomy and advocate against one-size-fits-all policies that override local decision- making.
In the case of HB 268 however, MACo decided to support it. This bill changes the eligibility for exemptions from the personal property tax for businesses that had a total original cost for equipment purchases of less than $20,000, which doubles the current exemption of $10,000. It also prohibits the State from requiring the submission of a property tax return at all for certain businesses. In this situation, where MACo would have normally opposed because it would reduce our revenue, the counties recognized that small business needs help and we are always trying to attract and retain businesses. The relatively small impact that reduces the tax generated, we believe will be more than offset by keeping more businesses viable and keeping more people employed. These businesses create jobs and their employees then pay the taxes and live and work and support our community businesses.
HB 89 / SB 480 “Child Care Stabilization and Expansion Grant Program” establishes a grant in the State Department of Education to help provide financial support to licensed child care providers that are in danger of closing or going bankrupt in the next year due to financial hardship. The program would increase access and availability then award grants ranging from $1,000 to $50,000. This program could have the added benefit as the Kirwan education law expands to include access to all Pre-K students. Some school buildings lack the capacity to include this expansion and this may allow a licensed child care to fill the gap of Pre-K access. We also believe that this will benefit our citizens
who have jobs, since there are more daycare facilities available to take care of their children, so they can get back to work.
HB 8 / SB 275 “Family and Medical Leave Insurance Program has the potential to be detrimental to small business. There is a federal law (FMLA) that requires employers with 50 or more employees to give 12 weeks of unpaid leave to care for a family member and guarantee that they can come back to their job and also maintain their health benefits. We all agree this is an important measure for families going through a crisis. This bill would establish an insurance fund and have the employer and employee split the cost of .75% as a payroll deduction. However, a major difference between this and the Federal law, is that it would apply to every business, even if there is just one employee. Why is this a potential problem? It is not necessarily just the cost, but if a business has only a handful of employees, finding someone to be trained, fill the gap, and run the business if someone is out for three months is challenging. The intentions of this legislation are good but amendments will be needed to make this workable for all, the businesses and the employees.
We had our first guest speaker this week. Vicki Gruber from DLS gave an overview of the Governor’s budget which allowed the committee to gain insight and ask questions. A quick look at the 2022-23 budget is about $58 billion, which is a decrease of $3.5 billion, however that is due to the temporary federal aid from Coronavirus relief and Cares act ending
Also, this week, the Board Officers and other leadership from MACo had the opportunity to meet virtually with House Speaker Adrienne Jones and Senate President Bill Ferguson. This was a very productive, positive and open discussion about their leadership priorities and also the Counties priorities. We have another meeting scheduled with them in a few weeks and MACo appreciates that dialog and is so important to building that relationship and understanding where all parties are coming from.
I hope this helps continue to give an understanding of our review process so that all the citizens understand how important our county voice is. The items that come up at the State level absolutely affect our citizens at home. Without the input of a representative from each county and a seat at the table to influence policy in Annapolis, we could be left out of the conversation.
The Governor’s spending plan leaves a record balance of $3.6 billion in the rainy-day fund. There will be much debate this session over what to do with the surplus. Should it be one time spending on short-term and capital items or used to provide long-term tax cuts? Stay tuned.
Laura Price is President of the Executive Board of Directors of MACo, former chair and current member of Budget and Tax, member of MACo’s Initiative subcommittee, Talbot’s legislative liaison and member of the Talbot County Council.