Help for Small Businesses, Funding for City Dock and New Taxes
January 29, 2020,
When the General Assembly is in session you can count on a lot of legislative activity and lets not forget that the Annapolis City Council and County Council are still meeting twice a month as well. So far 511 bills have been introduced in the State Senate and 675 in the House of Delegates. Some items of interest include a package of legislation from the Senate Small Business Jobs Workgroup, a funding mechanism for City Dock and more talk about state and County tax increases. Read below for more details.
Small Business Legislation
A group of Senators, including Katie Fry Hester, Guy Guzzone, Mary Beth Carozza, Doug Peters, Cheryl Kagan, Chris West and Brian Feldman have formed the Small Business Jobs Workgroup. This bipartisan group of senators understands that small businesses are a crucial part of our state economy and that we all benefit when small businesses succeed. The Small Business Jobs Workgroup combined their ideas and produced a legislative package for the 2020 session. The package will address the following topics:
· Pass-Through Entities Adjustment (Senator Guzzone)
· SHOP Tax Credits to Increase Access to Affordable Healthcare for Small Business (Senator Hester)
· Small Business Regulatory Burden Reduction (Senator Hester)
· Creating a Maryland Regulatory Common Application (Senator Kagan)
· Workgroup on the Digital Economy and Industry 4.0 (Senator West)
· Commission on Tax Policy, Reform and Fairness (Senator Feldman)
· Agricultural Exemption for the Minimum Wage (Senator Miller/Senator Carozza)
· Sick Leave Verification for Seasonal Employees (Senator Carozza)
We will continue to monitor the work of the Senate Small Business Jobs Workgroup and the progress of their proposals to help small business.
Funding for City Dock Project
There has been a lot of interest in replacement of the Hillman Garage in Downtown Annapolis along with the new proposal to re-imagine City Dock and create a more compelling and environmentally sensitive public space. Currently, the City is moving forward with the plans to replace Hillman and it will select a developer for the project by the Spring of this year. At the same time, efforts are underway to establish a new “finance authority” to help fund the City Dock project.
Since the issue of sunny day flooding and the ongoing threat of a rising sea level due to climate change has a great impact on City Dock and other areas of the State, Senator Sarah Elfreth has introduces SB 457 which would allow communities with a population of at least 30,000 to a establish a “Resiliency Authority” that would be able coordinate funding and issue bonds for projects that are related to the impact of climate change. This is an innovative piece of legislation that would make funds available for the City Dock project and other environmentally important projects around the State. The Chamber is very interested in this bill since it can provide a significant investment into Downtown Annapolis, which will provide improvement for the business owners, customers and the general public.
Taxes and More Taxes
No matter how you slice it, the Kirwan Commission’s recommendation to improve the public education system and update school buildings is going to require new tax revenue. We have already seen legislative proposals to tax digital advertising (SB 2) and there is talk about a tax on digital downloads and streaming music/video services. This new type of tax is being referred to as a modernization of the tax code, but it could make Maryland a leader in digital taxation (which is not a good thing) and could hamper the future development of tech related jobs. The estimated cost for the Kirwan recommendations over the next four years is $4 billion dollars, with the State picking up $3.6 billion and the Counties having to find the rest of the money.
Meanwhile, the drumbeat for more taxes can be heard at the County level as County Executive Steuart Pittman is actively working to get legislation passed that would allow the County to implement a progressive income tax (higher tax rates for higher income households). In addition, during his Budget Town Halls, the County Executive stated that he has not ruled out another property tax increase to cover the cost of operations. At this time, we have not heard any discussion from the County Executive or County Council about how they would generate the required funding for Kirwan recommendations.
All this “tax talk” comes at a time when the State is facing a structural deficit, according to the Department of Legislative Services, before any of the Kirwan costs are factored into the equation. The Chamber is concerned about the negative impact new taxes would have on Maryland businesses and consumers. While it is important for government to provide quality services, particularly in the area of education, it is equally important for state and local governments to be good stewards of our tax dollars and not create a negative business climate.