ANNAPOLIS – Gov. Larry Hogan (R) proposed tax breaks targeting retirees, working families and “struggling small businesses” Tuesday.
“I can’t imagine anybody could oppose these common sense” initiatives, said Hogan.
The first-term governor put tax relief and education funding at the center of his legislative agenda, though the governor did not announcement how he plans to pay for the tax cuts.
“On the 20th, we’ll give you our budget, and you’ll see the details,” said Hogan.
During a news conference at the State House, Hogan also unveiled an initiative to encourage manufacturers to set up shop in Western Maryland, the lower Eastern Shore and the City of Baltimore.
Under his proposal, those manufacturing companies would not have pay a corporate tax at all and all state taxes would be waived “for a decade,” according to Hogan.
He specifically targeted “certain new companies who commit to bringing in a certain number of jobs into our most troubled areas of the state where unemployment is the highest.”
For retirees, “We’re proposing a measure that will save 640,000 Maryland retirees $183 million in taxes,” said Hogan.
The 2016 legislative session officially kicked off Jan. 13 when the legislature reconvened. Hogan said his “top priority” this year, like last year, is education funding.
Likewise, he was skeptical about a Democratic proposal to lower in-state tuition rates.
“I don’t want to see cuts to higher education, so that’s probably would a tuition decrease would do,” said Hogan.
The governor trumpeted school spending during his first term in office and pledged to be the first governor to “fully fund” the Geographic Cost of Education Index in both his first and second years in office. He also said the state will contribute more than $600 million to school construction.
Local state Sen. Nancy King (D-39) questioned the governor touting record investments in education funding.
“He’s not adding anything to it. He’s funding what’s mandated,” she said.
King also sounded skeptical about Hogan’s tax cut proposal. The governor said “an overwhelming majority of Marylanders want this” at the Jan. 12 news conference.
“I just need to hear what’s going to be cut, what needs to be cut to do a tax cut,” said King. “The word ‘tax cut’ is just music to people’s ears, but they need to realize that a tax cut for one person is probably a cut in funding for another person somewhere.”
As the governor prepares to unveil his budget next week, Hogan said he is not interested in offering financial relief to localities that will lose millions of dollars from the fallout of a United States Supreme Court decision issued last May.
In the case titled Comptroller of the Treasury of Maryland v. Wynne, the Supreme Court considered arguments about why residents who pay income tax to another jurisdiction for income earned in that other jurisdiction are allowed a credit against the state tax but not the county tax.
A 5-4 majority of the court ruled Maryland’s personal income tax scheme violated the dormant Commerce Clause.
“Well, I think they’ve all been preparing for this for several years and most of the localities are going to have to deal with those problems themselves as we’re dealing with our problems here. But if we can be of some assistance in helping them figure it out, we’ll be happy to talk to them,” said Hogan.
“I’m more concerned about the $200 million taken out of the pockets of taxpayers than I am the $200 million taken out of government,” he added.