An Educational News Source for Chestertown Maryland
During a Friday visit to Easton, Maryland Comptroller Peter Franchot spoke via videoconference with The Spy.
Franchot talked about Maryland’s tax season, which began Feb. 12; the state’s COVID-19 stimulus checks, processed by his office; and how Maryland’s economy looks after nearly a year of the pandemic.
This video is about 18 minutes long.
After the House of Delegates nixed a last-minute provision that would’ve included broader stimulus checks for Maryland taxpayers, Gov. Lawrence J. Hogan Jr. (R) plans to sign a billion-dollar relief effort into law Monday.
Hogan’s RELIEF Act, as currently amended and approved by both the House and Senate on Friday, would include sweeping tax relief for small businesses and Marylanders, and direct stimulus checks to certain low-income taxpayers. The proposal was overwhelmingly passed by the legislature Friday after a day of contentious debate over whether to include taxpayers without Social Security numbers, including undocumented immigrants, in the bill’s direct stimulus.
Hogan, who has repeatedly called on the legislature to quickly pass his relief proposal, lauded lawmakers’ fast action in a Friday statement.
“The RELIEF Act will deliver more than $1 billion in tax relief and economic stimulus for struggling families and small businesses,” Hogan wrote. “It will help Marylanders barely hanging on right now as we work to bring this global pandemic to an end. While Washington gears up for yet another partisan fight, here in Maryland we are once again setting an example of what effective and bipartisan leadership looks like.”
A spokesperson for Hogan confirmed that the governor plans to sign the emergency relief package into law on Monday.
The relief package includes direct stimulus payments – $500 for families and $300 for individuals – to low-income taxpayers who filed for the Earned Income Tax Credit (EITC) in 2019. But because the EITC requires a Social Security number, advocates have warned that thousands of Maryland taxpayers would be excluded from those stimulus payments.
House Democrats on Thursday added people who file taxes with individual taxpayer identification numbers (ITIN) who meet the EITC income guidelines to the RELIEF Act’s stimulus checks.
ITIN filers also include undocumented immigrants and “some people who are lawfully present in the U.S., such as certain survivors of domestic violence, Cuban and Haitian entrants, student visa–holders, and certain spouses and children of individuals with employment visas,” according to the National Immigration Law Center.
But the proposal to send ITIN filers stimulus checks was withdrawn Friday after Republican objections and questions over its viability threatened to hold up the bill. Instead, lawmakers plan to pass separate legislation next week to provide assistance to ITIN filers.
More than 86,000 ITIN filers paid more than $100 million in state and local taxes last year, according to Comptroller Peter V.R. Franchot (D), and many of those taxpayers meet the EITC income qualifications.
House Majority Leader Eric G. Luedkte (D-Montgomery County) said the removal of ITIN filers from the relief proposal was a compromise. He promised to quickly pass an “equivalent program” that would provide relief for those taxpayers as early as next week.
“Every Maryland taxpayer in poverty deserves help,” Luedtke said.
In a joint statement, Senate President Bill Ferguson (D-Baltimore City) and House Speaker Adrienne A. Jones (D-Baltimore County) promised to pass legislation to “include every Maryland taxpayer in the Earned Income Tax Credit” next week.
“No Marylander deserves to wonder where their next meal will come from, how to buy their child’s diapers, or how to pay for life saving medicine – especially when they go to work every single day,” the statement reads.
Ferguson and Jones wrote that, combined with the newly passed RELIEF Act, the proposal will be “the best anti-poverty legislation to have passed the General Assembly in years.”
That relief won’t include immediate stimulus payments to ITIN filers, a spokesperson for Ferguson said. It’ll extend EITC benefits to ITIN filers for the 2020, 2021 and 2022 tax years, Ferguson said at a Friday evening media briefing. He noted that Hogan currently holds “all the cards” in determining how to distribute relief funding.
In a Friday statement, CASA Research and Policy Analyst Cathryn Paul demanded the fast passage of that legislation, including a veto override if necessary.
“Today, leaders of the Maryland House and Senate issued a joint statement committing to immediately passing EITC reform expanding coverage to include ITIN filers,” Paul said. “While EITC reform is certainly needed, it is unimaginable that an anti-immigrant Governor like Larry Hogan will not veto the bill when it reaches his desk. Only a veto-proof majority and rapid veto override vote will provide the critical relief needed by immigrant tax filers.”
(Hogan’s wife, First Lady Yumi Hogan, immigrated to the U.S. from South Korea.)
After the House approved of the relief proposal Friday, the bill returned to the Senate floor just before 5 p.m. on Friday and was passed by a unanimous vote, 45-0.
“We have seen livelihoods destroyed and we have seen lives lost. And this is a clear message to Marylanders everywhere … relief is on its way. Not next year, not in the next month, but now. That is why we put partisanship aside and put public service first,” Sen. Craig Zucker (D-Montgomery) said.
Senate Minority Whip Michael J. Hough (R-Frederick) commended the chamber for working through a compromise quickly
“I think the Senate really showed leadership here and did a good thing. We’re going to get direct aid to people, relief,” Hough said. “It’s not a perfect bill, compromises are never perfect … but nonetheless I think this is a good bill overall.
In a Friday press release, leaders of the Maryland Legislative Latino Caucus said Maryland would join California and Colorado if it expands EITC benefits to ITIN taxpayers. According to that release, Attorney General Brian E. Frosh (D) said that the previous proposal to include ITIN filers in the RELIEF Act “would not be viable.”
“Now, more than ever, we must ensure there are no barriers to help those in need,” Latino Caucus Vice Chair Joseline Peña-Melnyk (D-Anne Arundel and Prince George’s) said in the release. “Immigrants have been working to keep our communities afloat during this time, so we absolutely need to step up for them.”
Franchot, in a statement after the vote, said he still believes the RELIEF Act “falls considerably short,” but was improved by legislative amendments.
“I was disappointed that tax-paying immigrants were excluded from receiving direct stimulus payments,” Franchot said. “They are our friends and neighbors who are also struggling to feed their families and pay their bills. The taxes they pay provide financial relief to others, but they are being cast aside without immediate assistance. This is economic injustice, plain and simple.”
His office will work with the General Assembly to “provide EITC benefits to all eligible Marylanders ― regardless of whether they file their taxes with a Social Security Number or an ITIN ― as soon as possible.”
By Bennett Leckrone and Danielle E. Gaines
Gov. Lawrence J. Hogan Jr. (R) touted the state’s vaccine plan and urged state lawmakers to quickly pass his COVID-19 relief proposal in an unusual State of the State address Wednesday evening.
While normally Hogan would have delivered his annual address to a midday joint gathering of the Maryland Senate and House of Delegates, the governor live-streamed his comments. In the address, Hogan urged Marylanders to get the vaccine – but acknowledged it may be some time before everyone is vaccinated.
And as in past years, Hogan emphasized bipartisanship and cooperation in his address.
“Over this past year, as we have faced unimaginable challenges, those words were truly put to the test,” he said. “But together we rose to the challenge, and it is because of the courage, the sacrifices, and the strength of the people of Maryland that the state of our state is more resilient than it has ever been before.
Here’s what Hogan said in his seventh State of the State address:
On the state’s vaccine plan
More than 570,000 Marylanders have received a dose of the COVID-19 vaccine as of Wednesday, Hogan said, and the state is ready to vaccinate many more when the federal government allocates more doses.
“Unfortunately, right now the amount of vaccines being allocated by the federal government is just a tiny fraction of what we need,” Hogan said. “That is the hard truth not just for us in Maryland, but for every state in America.”
Hogan echoed his Acting Secretary of Health Dennis R. Schrader in saying that the state is building “infrastructure” to cope with a larger supply of the long-sought vaccine. He noted that the new single-shot Johnson & Johnson vaccine could soon receive federal approval – and that it’s being manufactured in Maryland.
Despite the limited supply, the state recently opened up eligibility to a much larger portion of Marylanders, leading some Democratic lawmakers to question the rapid expansion. In his rebuttal to Hogan’s address, House Majority Leader Eric G. Luedtke (D-Montgomery) pointed out that Maryland has lagged behind other states in its vaccine rollout.
Luedtke called the state’s vaccine plan “bungled” and criticized Hogan for “abysmal communication” on vaccines.
“The single-most important thing is communication. The public is deeply confused about how to get access to the vaccine,” Luedtke said during a conversational, interview-style response, unlike the pre-filmed rebuttal speeches of the past.
Hogan acknowledged that vaccination will take time, and urged Marylanders to be patient and continue following COVID-related precautions while they await the vaccine.
“It is going to require a great deal of patience for many months while states continue to push the federal government and the manufacturers to increase the production and to drastically increase the allocations they provide to the states,” Hogan said. “In the meantime, we must continue to take the necessary precautions, which keep our families, our friends, and our neighbors healthy and safe.”
On COVID-19 relief and the economy
Hogan again urged lawmakers to pass his billion-dollar relief plan, but made no mention of an additional $520 million amendment that senators tacked onto his proposal this week.
Hogan’s RELIEF Act of 2021 consists mostly of tax cuts and money from the state’s reserves, and includes relief checks of up to $750 for families and $500 for individuals who filed for the earned income tax credit.
“I am once again calling on the legislature to pass this bill and get it to my desk as soon as possible, so that I can sign it into law, so that it can take effect immediately,” Hogan said. “There is absolutely nothing more important for the legislature to do, and Marylanders simply cannot afford to wait.”
The amended bill received preliminary approval in the Senate on Wednesday. Final debate is currently scheduled for Friday.
But the proposal might see even more additions in the House. Luedtke said there’s bipartisan agreement that relief needs to get to Maryland families and businesses fast but said the House may take a “slightly different position” than the Senate on how to best help Marylanders.
“We believe that the bill should absolutely be focused, laser-tight, on making sure Maryland middle class families and small businesses have the support they need,” Luedtke said.
Hogan touted his proposed budget as “structurally balanced with absolutely no tax increases,” and no layoffs for state employees. He said he’s also proposing more than $1 billion in tax cuts for retired Marylanders, which he said will keep “tens of thousands of Marylanders from feeling our state.”
“Now more than ever, Marylanders need to be able to keep more of their hard-earned money in their own pockets,” Hogan said.
Luedtke said the problem isn’t high taxes, but rather low taxes on wealthy Marylanders and businesses. He slammed Hogan’s veto on the proposed digital ad tax, which legislators plan to use to fund the also-vetoed Blueprint for Maryland’s Future education reforms.
“It’s not that taxes are too high, it’s that we let too many people get away without paying their fair share,” he said. He noted that House and Senate leaders are set to unveil unemployment insurance reform tomorrow.
On Maryland’s recovery
Hogan said he’s issued more than 85 emergency health orders since the onset of the pandemic and noted that it was only a few days after his 2020 State of the State address that he met with other governors and federal officials in the District of Columbia to learn more about the spread of the coronavirus.
He lauded Maryland small businesses, essential workers and teachers for their actions over the past year and noted the Maryland National Guard’s role in distributing COVID-19 tests and, more recently, at the Capitol on Jan. 6. “When our democracy itself came under attack, they were first to arrive to protect our nation’s capital,” he said.
He also praised health care workers, and noted Daisy Solares, a Baltimore City resident and respiratory therapist at the University of Maryland Medical Center. He said Solares, who lost her father to COVID-19, was one of the first Marylanders to get the vaccine. She described it as a “step forward at healing,” Hogan said.
The pandemic “will not end overnight,” but Marylanders working together can “get life back to normal once again,” Hogan said.
“A better future is on the horizon where we can get back to doing the everyday things we all miss, like celebrating with friends and family at a crowded restaurant or taking our kids and grandkids to a baseball game,” he said. “A better future where our kids are thriving, our communities are safer, and our economy is booming once again. We will get there, but we must continue looking out for one another and continue working together to build that better future.”
In his response, Luedtke said the Democratic majority in the General Assembly will be focused on racial equity in the state’s pandemic recovery. He said he hopes Hogan works with the legislature as they attempt to pass police reform and pursue House Speaker Adrienne A. Jones’ (D-Baltimore County) racial justice agenda.
Luedtke said Maryland is “well-positioned” to lead the nation in economic recovery in the next few years but said an equitable recovery will be important as the state moves forward.
“The inequalities that exist in our society have been brought to light like never before,” Luedtke said.
Comptroller Peter Franchot announced that nine agency branch offices reopened Monday, March 16, and will be open from 8:30 a.m. to 4:30 p.m. weekdays.
Taxpayers are still urged to call 1-800-MDTAXES for assistance or contact the comptroller’s office by email.
If necessary, residents of Talbot, Caroline, Queen Anne’s, Dorchester and the Lower Shore counties may visit the Salisbury branch office in Sea Gull Square at 1306 South Salisbury Blvd., Suite 182, Salisbury, or call 410-546-8100 for assistance.
Residents of Kent County may visit the Elkton Branch Office in the Upper Chesapeake Corporate Center at 103 Chesapeake Blvd, Suite D, Elkton, or call 410-996-0465.
Two branch offices — Upper Marlboro and Frederick — are located within county courthouses and are subject to local courthouse policies. The Upper Marlboro office will remain closed and there will be limited public access to the Frederick office. For a complete list of branch offices, visit www.marylandtaxes.gov.
Taxpayers who would typically use the Upper Marlboro branch should visit the offices in Greenbelt or Waldorf. Taxpayers who use the Frederick branch can visit the Hagerstown or Wheaton offices.
Md. Comptroller Peter Franchot
“Critical taxpayer services provided by our branch offices will be met by our staff, who will be exercising an abundance of public health caution,” said Franchot. “Our staff is committed to doing everything possible to ensure continuity of critical functions, including processing tax returns, distributing tax refunds, processing state payroll and making vendor payments.”
More than ever, taxpayers are urged to file their Maryland state income tax returns electronically, including the use of direct deposit for refunds. Taxpayers can email their questions to taxhelp@marylandtaxes.gov or call 1-800-MD-TAXES for help weekdays from 8:30 a.m. to 7 p.m. (extended hours during tax season remain in effect.)
Last week, Comptroller Franchot announced certain business tax payments currently due in March, April and May will now be due June 1. The extension applies to businesses filing sales and use tax, withholding tax, and admissions & amusement tax, as well as alcohol, tobacco and motor fuel excise taxes, tire recycling fee and bay restoration fee returns.
The Kent Commissioners on Tuesday heard from the county’s five municipalities on the need for a tax differential–and the response was mixed.
The differential is a rebate on property taxes town residents pay the county for services like police, street cleaning and planning & zoning, which the town provides and pays for out of its own budget. The differential exists in the vast majority of counties in the form of a lower county tax rate to town residents or a direct cash payout to the municipality, but not in all cases.
Kent is one of only three counties in Maryland that does not provide a differential to its municipalities.
Chestertown Mayor Chris Cerino and the Town Council have maintained that withholding a differential to Chestertown amounts to double taxation because the county does not provide these services within town limits–yet town residents are taxed at both the municipal and county levels.
“We provide three major services that you otherwise provide to every member of the county accept in a few of these incorporated towns,” Cerino said at a commissioner’s work session with the county’s mayors on Tuesday, Feb. 11.
An ongoing argument between Chestertown and the county is a grant-in-aid for waste disposal that the county discontinued in fiscal 2015.
Since then, Cerino has gone to the commissioners unsuccessfully each year to have the grant-in-aid reinstated. This year he requested a $250,000 rebate for fiscal 2021 to help recover some of the cost of services.
Cerino said the town bears the expense of police, street maintenance and planning & zoning at a cost of just over $3 million annually–and that the town’s request for $250,000 is a bargain for the county. He pointed out that the town sends $8.6 million in property and income tax revenue to the county annually, according to data the town obtained from the Maryland Comptroller’s Office.
“The $250,000 I’m requesting as a proportion of the [county’s] $50 million budget is one-half of one percent of the total budget,” he said. He said it would represent the smallest rebate to any municipality in Maryland.
Cerino lamented that the lack of a differential was an economic handicap for Chestertown because it discouraged investment in Opportunity Zones and Enterprise Zones.
“It’s becoming the place with by far the highest tax rate,” Cerino said. “If you want to draw in new businesses…it’s in your best interest to give us a little kickback so we can keep policing ourselves. It saves you money and allows us to keep our tax rates low.”
But the Kent Commissioners have maintained that they provide support for services that benefit Chestertown in a manner that equals or exceeds an annual payment of a differential. The commissioners also maintain that these services are above and beyond what other counties provide their municipalities.
Millington Councilman Kevin Hemstock said determining a differential for the incorporate areas was easy because “that wheel has already been invented.”
He referenced a news article from 1989 that reaffirmed the county’s commitment to continue a five-cent tax differential to the municipalities in a year when property taxes were increased 33 cents to close a $1 million deficit.
“It was equitable and it adjusted itself for inflation in various tax assessments,” he said. “We don’t have to come up with an exact amount, somewhere along the line the county did that already.”
Betterton Town Mayor Don Sutton said he was not seeking a differential and said a review at the town’s finances indicated no significant inequities that would require one.
“We’re OK this year,” he said.
Rock Hall Mayor Dawn Jacobs expressed no real need for a differential either and said there was a strong relationship with the Kent County Sheriff’s Office to support the town’s three police officers. She said the county was also providing needed support with emergency services and equipment.
Galena Mayor John Carroll said they looked for duplication of services and found that the lack of a differential wasn’t “burdensome” to the town. He said any future rebate that could be justified should translate into a tax rebate directly to the citizens and not a cash payout to the town.
“[A rebate] going back into the coffers of the town isn’t always better than going back to the taxpayers,” he said.
Commissioner Tom Mason asked Cerino if Chestertown would raise taxes if the county provided a differential directly to the citizens.
Cerino responded that the town would in fact recoup the differential by raising taxes on residents, but the additional revenue would help the town increase services.
“If you did give us a 5-cent differential on the county tax rate that potentially allows us to raise our taxes by an equivalent amount and it would be a wash for the taxpayers,” Cerino said. “It would help the taxpayers because it would allow us to stay solvent and keep our own police force…and get back on track paving streets.”
