Income measurement fueling aid battle

February 05, 2009|By ANDREW SCHOTZ

WASHINGTON COUNTY -- A battle over the measurement of wealth is pitting two metropolitan counties against the rest of Maryland.

At issue is when the state should compile "net taxable income" data from tax returns to calculate state aid.

If the measurement date moves from Sept. 1 to Nov. 1, as has been proposed before, it would shift millions of dollars away from Baltimore and Montgomery counties to other counties.

Washington County Public Schools would have gained as much as $3.8 million in fiscal year 2008, according to Anthony Trotta, the school system's chief legal counsel.

Del. Doyle Niemann, D-Prince George's, sponsored a bill in 2006 in favor of Nov. 1, but it didn't make it out of the House Ways and Means Committee, whose chairwoman represents Montgomery County.


Niemann said the switch would allow a more accurate reading of wealth, as measured by income-tax returns. Baltimore and Montgomery counties have a high percentage of late filers, so those counties' wealth is underreported on Sept. 1, he said.

A truer reading, though, would have cut Montgomery County's state aid by as much as $25.9 million in fiscal year 2008 and Baltimore County's by as much as $8.9 million.

Twenty other school systems would have gotten more aid, most notably Prince George's, which would have gained as much as $24.5 million, according to a summary chart. Two school systems would have had no change.

Ardath Cade, Washington County Public Schools' lobbyist, said the Maryland Association of Boards of Education expects the battle to return this legislative session.

Washington County school board members agreed Tuesday to support the change to Nov. 1.

Niemann said he isn't filing the bill again, but Del. Justin D. Ross, D-Prince George's, might.

However, Ross said he prefers "a broader discussion" about fair aid distribution rather than focusing on this one debate.

A state Department of General Services analysis says the federal government, a few years ago, extended the income tax filing extension deadline from Aug. 15 to Oct. 15. The on-time deadline remained April 15.

"In general, late filings make up a higher percentage of net taxable income in the more wealthy districts," the analysis says.

From Sept. 1 to Nov. 21 of 2005, net taxable income increased 21 percent in Talbot County, 19 percent in Montgomery County and 14 percent in Baltimore County.

The Prince George's County school system has the issue at the top of its 2009 legislative agenda, saying it's losing about $23 million a year because of the lag between the state measurement and the federal filing deadline. "This needs to be corrected as soon as possible," a draft of the county's legislative agenda says.

In 2006, Montgomery County spoke out against Niemann's bill, calling it one of many attempts to alter a public education plan and aid formula created by a state commission. The plan should be fully funded before changes are considered, Montgomery County's written statement says.

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