New laws set to take effect

June 29, 1997


Staff Writer

State income tax relief is set to begin in Maryland this week, but actually it won't.

The five-year, 10-percent state income tax cut is just one of the new laws that goes into effect with the start of the state's new budget year July 1, but taxpayers won't see any savings until January of next year.

"The thing you have to make clear to the public is this thing doesn't start until 1998," said Assistant State Comptroller Marvin A. Bond.

Bond said the tax cut, which was approved by the General Assembly this year, must hold until January so it can keep in sync with the tax year, which is identical to the calendar year. Starting the cut this week would mean altering the income tax structure in the middle of the tax year - something that could be a logistical nightmare, he said.


"You can't change these things midstream," he said.

The new budget year brings with it many other laws. Included are the new "smart growth" laws aimed at limiting suburban sprawl, a college tuition savings plan and a repeal of the state's tax on potato chips, pretzels and other snack food.

One of the most important pieces of local legislation passed this year in Annapolis also goes into effect - a $2.5 million partial state bailout of the city of Hagerstown's pension debt.

Another local law will increase the salary of Board of Education members from $3,600 to $4,800, to take effect after the next school board elections next year. The salary for the school board president will increase from $3,700 to $4,900.

Del. John P. Donoghue, D-Washington, chairman of the county's legislative delegation, said he is hopeful that legislation he sponsored that alters health care regulation will broaden access for self-employed individuals.

Another bill that becomes law this week will give people more time to file appeals to the state Tax Court. Del. Robert A. McKee, R-Washington, said he sponsored the legislation after getting a complaint from a constituent whose appeal arrived by mail at the Tax Court after the 30-day period allowed for appeals to be filed.

McKee's law will allow all appeals to be considered if they are only postmarked within the 30-day appeals period.

"In my mind it's a lot fairer system," he said.

McKee is a member of the Ways and Means Committee, the House of Delegates panel that reviews tax issues. But he doesn't have high hopes that the income tax cut will spur economic growth in the state.

"I don't see where it's going to do a lot," McKee said.

When the tax cut begins next January, most taxpayers will notice only a modest change in their paychecks. That's because the tax cut is being split between reducing the tax rate and increasing personal exemptions on annual tax returns.

"It's kind of typical government. It's kind of a compromise to keep everyone happy," McKee said.

That means the average taxpayer, who pays about $716 a year in state income tax, will see a yearly savings of about $14.32.

The Herald-Mail Articles