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Earned Sick Leave
The Maryland Budget and Tax Policy Institute (MBPTI) supported HB 735 and SB698, requiring that employers provide employees with earned sick and safe leave and requiring employers to allow employees to use earned sick and safe leave. The bill would have benefited Maryland’s economy, reduced health care costs, and helped working families provide and care for their members. Earned sick leave is an important public health tool, enabling employees to take care of their health or the health of their children in a timely manner, and protecting coworkers, diners, or other customers from infection.
The cost to Maryland businesses would have been low, amounting to about 25 cents per hour per employee according to the Institute for Women’s Policy Research. More importantly, the business savings – primarily due to reduced turnover but also to increased productivity as a result of less sickness in the workplace, healthier customers, and other effects – completely offset these costs. The experiences of Connecticut and San Francisco show that earned sick leave requirements can be part of a vibrant, growing economy.
Unfortunately, the bill was opposed vigorously by business organizations. The House bill was withdrawn; the Senate bill died in committee. Yet the evidence shows that paid sick leave is not just a humane practice; it is good economic policy. MBTPI will support this legislation in the future.
Life-saving cigarette taxes
MBTPI supported legislation to add $1 per pack to Maryland’s tobacco taxes (HB 683/SB 700). This would have improved Maryland’s health by discouraging smoking, especially among young people. And it would have provided revenue which could be directed to health services. Both House and Senate bills died in committee, though. MBTPI will continue to support this measure on the principles of promoting good health and providing needed revenue.
Reforming corporation taxes
The state corporation tax got a lot of attention this session. Many bills were submitted to reduce the corporation income tax rate. Others proposed reforms to modernize the corporation tax, most notably by requiring “combined reporting” a tax system that prevents multi-state corporate groups from using subsidiaries and affiliates to avoid Maryland corporate income tax.
MBTPI supported a joint strategy of broadening the tax base and lowering the rate. The Institute supported combined reporting and other reforms to discourage corporate tax shifting and to broaden the corporate income tax base. A majority of the states with corporate income taxes have closed these loopholes.
We also supported a reduction in the corporation tax rate from 8.25 percent to 7.5 percent. Lowering the corporate income tax rate to 7.5 percent would put it near the same rate at which most Maryland personal income is taxed (including both state and local income taxes). We believe that this package would protect the revenue base needed to fund public services that are important to the economy, make Maryland’s tax system fairer and more modern, and help local Maryland businesses.
All of the bills to alter the corporation income tax either died in committee or were reported unfavorably. MBTPI continues to support sensible business tax reform.
Protecting resources for schools
MBTPI supported legislation to protect future education funding (HB 1474/SB 958). Over a decade ago, Maryland enacted a groundbreaking set of education finance reforms know as the “Thornton Program.” These reforms were based on a rigorous study of the actual costs in the state’s best-performing schools. They were intended to assure adequate education funding for all students, and to provide the resources necessary to reduce systematic performance gaps between students of different income categories and racial and ethnic groups. During the period of the Great Recession and its aftermath, the state found it necessary to limit the growth in the formula amounts. HB 1474 would have helped to prevent further erosion in Maryland’s commitment to full and fair public school funding. The bill died in committee. MBTPI will be calling on Governor O’Malley to fully fund the inflation increase in school costs in the next budget, and will again support legislation to protect future school funding.
Evidence-based policies
MBTPI supported legislation to promote evidence-based policy outcomes. SB 831 would have established a Committee on State Budget Evidence-Based Policy Options. The Committee would have reported annually on areas of opportunity within the operating budget where the state could benefit from evidence-based policies. This bill also died in committee. Over the summer, we will look at other states that have adopted this practice to gauge its success.
Unlike some states (Texas), Maryland’s legislature meets every year. MBTPI will be keeping track of these issues, and others, and pursuing them further in the 2014 legislative session.
