Maryland Gov. Larry Hogan (center) smiles alongside Senate President Bill Ferguson (left), House Speaker Adrienne Jones (right) and other lawmakers after the three state leaders signed legislation into law to suspend the state’s gas tax for 30 days on March 18. (Robert R. Roberts/The Washington Informer)
Maryland Gov. Larry Hogan (center) smiles alongside Senate President Bill Ferguson (left), House Speaker Adrienne Jones (right) and other lawmakers after the three state leaders signed legislation into law to suspend the state’s gas tax for 30 days on March 18. (Robert R. Roberts/The Washington Informer)

Maryland Gov. Larry Hogan and state leaders agreed Monday to incorporate $1.86 billion of tax relief over the next five years for seniors, small businesses and low-income families.

It’s estimated about 80% of seniors 65 and older would receive up to $1,750 in state tax relief starting next year, which would need formal approval as part of the state’s overall $58.5 billion fiscal 2023 budget.

Also part of the tax agreement are two other priorities the governor pushed that would extend until fiscal 2027:

  • Work Opportunity Tax Credit, which incentives employers to hire and retain workers from underserved communities who’ve either been laid off or faced significant challenges in employment.
  • Family Budget Booster, which offers sales tax exemptions for essential items such as diapers, car seats, baby bottles and dental hygiene products.

State lawmakers continue to work on the budget details with the goal to sign the measure into law this week.

Democratic leaders praised in reaching a deal with the Republican governor.

“This bipartisan agreement helps hundreds of thousands of seniors on fixed incomes who are struggling with inflation and puts families on a stronger footing as they buy necessities and pay for child care or college,” House Speaker Adrienne Jones (D-Baltimore City) said in a statement. “The significant increase in capital spending, coupled with the Work Opportunity Tax Credit, will help Maryland businesses put more chronically unemployed Marylanders back to work.”

The governor has made tax relief one of his main priorities since he took office seven years ago.

“This agreement will deliver on our promise to provide real, long-term relief for hard-working Marylanders dealing with inflation and higher prices and help create more jobs and more opportunity to continue our strong recovery,” he said in a statement.

The tax break for single seniors would be up to $1,000 who make up to $100,000 in retirement income; married couples would receive up to $1,750 who earn up to $150,000.

Anyone who receives less than $1,000 wouldn’t be eligible for the tax relief.

Businesses already enrolled in the federal Work Opportunity Tax Credit program would receive additional tax incentives for hiring those who struggled to obtain employment. Those individuals include ex-felons, now called “returning citizens,” military veterans, or residents enrolled in the Supplemental Nutrition Assistance Program (SNAP).

The tax relief announcement comes 10 days after the governor, Jones and Senate President Bill Ferguson signed the gas tax relief legislation into law. Maryland became the first state in the nation to officially suspend the state’s gas tax for 30 days amid the coronavirus pandemic and a global war.

Maryland could lose nearly $100 million during what state officials labeled the “holiday gas tax,” which helps replenish the state’s transportation trust fund to repair roads, bridges and conduct transit projects.

Lawmakers pledge to use some of the $7.5 billion surplus money to help cover the loss in revenue.

“The last two years of the pandemic have shown the cracks in our state’s civic infrastructure,” Ferguson said. “As I’ve said since the beginning of the 2022 legislative session, everything we do must prioritize our state’s economy and the health of our residents. This historic agreement demonstrates that regardless of political party, leaders come together to deliver vital services and economic relief for families, seniors, and small businesses.”

Coverage for the Washington Informer includes Prince George’s County government, school system and some state of Maryland government. Received an award in 2019 from the D.C. Chapter of the Society of...

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