Maryland lawmakers’ tax relief plan leaves many with higher state tax bills – The Baltimore Sun
While state lawmakers have carved out more relief for younger taxpayers, the working poor, military retirees, small businesses and retired corrections officers, they decided they had to delay more relief for all taxpayers until they could see precisely how much state tax bills increase as a result of the federal changes.
In the meantime, they’ve approved a plan to spend about $300 million of the estimated $400 million in new state revenues generated by the higher state tax bills, setting aside most for education and the rest for a rainy day.
Benjamin Orr, executive director of the nonpartisan Maryland Center on Economic Policy, said state policy makers were smart to avoid giving back all the new additional tax revenue before they know exactly which taxpayers will be paying how much more — and before they know whether the federal government plans to reduce state aid.
“Yes, it’s a small fix. I also think it’s an appropriate fix,” Orr said. “It’s a huge tax bill, and all of us are trying to still figure out all the ins and outs about what it does.”
With the possibility of future federal budget cuts to state programs that many Maryland residents care about — funding for the Chesapeake Bay, for example — Orr agreed it was prudent to take a wait-and-see approach.
“We just have no clue what President Trump and Congress are going to do in terms of budget cuts,” he said. “We need to plan ahead for these potentially drastic changes in support we get from the federal government.”
