Progressive Democrats propose tax package for education plan

ANNAPOLIS, Md. (AP) — A coalition of unions and progressive Maryland Democrats announced a package of tax measures on Wednesday to raise money for a plan to improve education in the state.

Del. Julie Palakovich Carr, a Montgomery County Democrat, estimated the package of 10 measures could raise an estimated $2 billion by 2030.

“In sum, we need to reform our state tax code not only to provide significant new revenues to invest in our students, but also to make our tax system fairer for the vast majority of Marylanders,” she said.

Part of the proposal involves closing tax loopholes that advocates of the legislation say enable large corporations to avoid paying corporate taxes for profits they generate in Maryland.

One measure in the package would end several tax breaks designed to spur economic development. Another measure would apply a 1% surtax on capital gains income.

Supporters of the package also are backing a measure to reset the state's estate tax exemption limit at $1 million, instead of $5 million — a change approved in 2014.

The package also includes a measure to restructure the state's personal income tax brackets to lower income tax rates on earners below the median while raising rates on higher-income earners and restoring a 7% tax bracket for millionaires.

Recommendations from the Kirwan Commission on education are expected to be a main topic of debate during the legislative session. The plan would phase in wide-ranging recommendations to improve schools over a decade, with the added cost of full implementation reaching about $4 billion annually a decade from now.

Leading Democrats, who control the General Assembly, have said they aren't looking to increase the sales tax, property tax or income taxes this session to help pay for the proposal. Supporters of the Kirwan plan point out that money needed to begin implementing the proposal already has been approved. However, lawmakers are considering some measures to raise added revenues in future years.

One measure already introduced in the legislature would create a new tax on digital advertising.

Republican Gov. Larry Hogan on Wednesday released his $47.9 billion budget plan for the next fiscal year. He has criticized the Kirwan Commission recommendations for proposing billions of dollars in increased spending without a plan to pay for it. Hogan has vowed to oppose major tax increases. He noted, however, that his budget includes $350 million lawmakers approved last year to begin implementing some of the Kirwan plan.

Lawmakers on fiscal legislative committees had breakfast with the governor Wednesday morning to discuss the governor's budget proposal.

Del. Maggie McIntosh, a Baltimore Democrat who chairs the House Appropriations Committee and served on the Kirwan Commission, said after the breakfast that lawmakers are pleased to see the $350 million in the budget. She also said lawmakers were happy to see the governor's budget recognizes school construction needs.

"There's no question this year that the $350 million that we have identified to begin the first year of the blueprint for Maryland’s students is there and ready to go, so the Kirwan Commission report will begin in earnest,” McIntosh said.