From the Halls: A modest tax proposal

Even if you’re not a regular subscriber to the happenings around Annapolis, chances are you’ve heard something about the Kirwan Commission and its now three-year effort to propose sweeping overhauls to Maryland’s K-12 education. While its work is officially slated for completion this fall, we know the Commission has put forward a final framework last week to invest an additional $3.8 billion of general state spending in our public schools by the end of 2030 (this was walked down from the previous $4.4 billion figure reported in December). For those calculating at home, the budget introduced last week by Governor Hogan totals $19.6 billion in general spending.

For the Maryland Chamber of Commerce, thorough investment in putting and keeping Maryland on the cutting global edge of Career and Technical Education (otherwise known in the education community as “CTE”) is a top priority. Robust workforce development programs through strategic business partnerships are critical for the future of this state, especially in light of the ongoing skills gap in the labor market. To the credit of the Kirwan Commission, CTE received a good deal of hard work and scrutiny, and we look forward to seeing the detail in legislation. At a modest fraction of the total estimated cost, implementing a globally competitive CTE system doesn’t come with the same complications of the full $3.8 billion price tag. For that there is no ready-made solution.

On the Backs of Business?

With the idea of partially paying for the Kirwan Commission’s recommendations, a Baltimore-based think tank released a report last week that has proffering up a detailed plan to increase state revenues by $1.9 billion with business in the crosshairs. Included in the proposal is an increase to the top marginal rate to seven percent from 5.75 percent, a special four percent surtax on pass-through businesses, the adoption of combined reporting on the corporate side, the expansion of the sales tax to cover digital goods, and eliminating popular and effective incentive programs such as the Biotechnology Investment Incentive Tax Credit.

It’s tough to think that any problem can be solved by putting it on the backs of Maryland business. With some of the highest business tax rates in the nation, not to mention serious complications from the recent federal tax reform, when does it put the kibosh on business formation and relocation? Already, Maryland has an issue with wealth leaving its borders with $1.6 billion relocating to states such as Florida and Virginia on net between 2015 and 2016.

We Need You in Annapolis

Want to help prevent this proposal from becoming a reality? Tomorrow, January 23rd, we have a distinct opportunity to gain new allies in the fight to keep businesses alive in this state and to make business’s voice heard in Annapolis. The Maryland Chamber’s “Meet the State” event is a full day, immersive experience with the General Assembly and our government affairs team. You’ll not only learn about more upcoming issues that impact your business, you’ll engage in informed discussions with your state legislators about how those issues affect you directly.

We hope you can join us.

What’s up next?

The 2019 legislative session has a lot in store. One piece of legislation coming down the pipeline will call for $15 minimum wage. Our Vice President of Government Affairs, Larry Richardson has all the details on what to expect from this bill.