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Maryland Legislative Update  
Update for February 25, 2022

Maryland Legislative Update: An update from Council President COL Bob Norton, USA (Ret):

I realize that I have been tossing a lot of information your way on the doings in Annapolis. Thanks for your patience and consideration.

This time, I want to provide my analysis of the six (6) bills in play that would partially or completely eliminate Maryland tax on Uniformed Services retired pay.  They are all over the lot.  Sometimes I think there's a secret strategy to churn the legislative process with lots of bills in this area to keep MOAA and other groups off balance.  If there is a strategy, it's worked because MOAA partisans have been at this issue for 23+ years with only modest progress to date.

Below is my handicap of the major bills in play.  We, MOAA Maryland, are free to pursue them all or to pick targets of opportunity to advance the objective.  Please share any thoughts with me and Legislative Chair, Lynn Nash: at this point, we will focus primarily on the DEL Rogers' bill, the DEL Novotny bill and maybe one other.  Thanks.  

A.  Bills that would eliminate the state's tax on Uniformed Services Retired Pay or raise the current 'income tax subtraction' -- in order of priority.  

 1. Phase Out State Tax on Mil Retired Pay.  HB 317.  DEL Reid Novotny's (Dist. 9A, Howard) would phase out the state tax over four (4) years beginning this year.  For this year, the reduction would be the HIGHER of the current $15K or 25%.  For the succeeding three years, add the higher of $15K or 50%, 75% and 100%.  I testified on HB 317 today.  

2. Phase Out Over 6 Yrs. For Senior Retirees Only.  HB420 / SB405.  Gov. Hogan's NEW approach, the previous 6 attempts having failed in the MGA.  HB420 would phase out the state tax over six (6) years, 10% per year for the first 5 years and the remainder, 50%, in the 6th year BUT only for military retirees >65 Yrs and who are fully retired.  We won't know the exact mechanics until the fiscal note comes out.  So, apparently, the bill would reach the objective for most MOAA MD members but do nothing for transitioning SM seeking a second career.  And it would not do anything for those who work beyond >65.

 3. Double Current $15K 'Subtraction'.  HB 597.  DEL Mangione.  This bill would double the existing 'subtraction' from $15k to $30K.  All the other controls would remain in place.

4. Raise Subtraction from $15K to $20K.  HB 461 / SB130.  DEL Mike Rogers (Dist. 32) and SEN Jackson, new Chair of the Vets Caucus.  Raises the current 'subtraction' from $15K to $20K.  All other controls remain in place.

5. Create Modest $3K Subtraction for ALL Veterans.  HB 124.  DEL Brooks.  New WEIRD entry in the sweepstakes.  Would authorize a $3K 'subtraction' to ALL 390+K veterans in the state.  

 6. Create $20K Subtraction for 100% Disabled Vets Only.  HB 473. DEL Nick Charles (Member of Key Revenues Subcomm. of House Ways and Means).  Bill would create a $20K 'subtraction' ONLY for 100% service-disabled veterans.

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B. Bills Likely to Pass One or Both Chambers in the 2022 Session.

 1. Create $20K Subtraction for 100% Disabled Vets Only.  HB 473. DEL Nick Charles (Member of Key Revenues Subcomm. of House Ways and Means).  Bill would create a $20K 'subtraction' for 100% service-disabled veterans ONLY.  Lowest cost measure due to small cohort: 700 vets rated 100% disabled.  Bill cleared Committee and House of Delegates unanimously last session (2021).

 2.  Raise Subtraction from $15K to $20K.  HB 461 / SB130.  DEL Mike Rogers (Dist. 32) and SEN Jackson, new Chair of the Vets Caucus.  Raises the current 'subtraction' from $15K to $20K.  All other controls remain in place.  Rogers has worked tirelessly to gain co-sponsors and work the key Revenues Subcommittee; and urge the MOAA MD CoC and MD Mil Coalition to back him.  MMC and MD CoC Alerts last week.  More to follow.

 3. Double Current $15K 'Subtraction'.  HB 597.  DEL Mangione.  This bill would double the existing 'subtraction' from $15k to $30K.  All the other controls would remain in place.  More expensive than Rogers' $20K solution but a nice bump up.

4. Phase Out Over 6 Yrs. For Senior Retirees Only.  HB420 / SB405.  Gov. Hogan's NEW approach, the previous 6 attempts having failed in the MGA.  HB420 would phase out the state tax over six (6) years, 10% per year for the first 5 years and the remainder, 50%, in the 6th year BUT only for military retirees >65 Yrs and who are fully retired.  We won't know the exact mechanics until the fiscal note comes out.  So, apparently, the bill would reach the objective for most MOAA MD members but do nothing for transitioning SM seeking a second career.  And it would not do anything for those who work beyond >65.  Hogan & staff have used past versions of these bills to flog the legislature.  The MGA has responded in the past by cashiering them.

 5. Phase Out State Tax on Mil Retired Pay.  HB 317.  DEL Reid Novotny's (Dist. 9A, Howard) would phase out the state tax over four (4) years beginning this year.  For this year, the reduction would be the HIGHER of the current $15K or 25%.  For the succeeding three years, add the higher of $15K or 50%, 75% and 100%.  Done.  Complete.  We win.  Novotny dropped this bill at my request but did not line up any co-sponsors nor make nice with the Revenues Subcommittee and the full Ways and Means Committee.  Likely a tough sell this session, in my opinion, especially if the cost to state and counties is significant.

 6. Create Modest $3K Subtraction for ALL Veterans.  HB 124.  DEL Brooks.  New WEIRD entry in the sweepstakes.  Would authorize a $3K 'subtraction' to ALL 390+K veterans in the state. Likely, one of the priciest of the options and wouldn't really have a significant impact on veterans' state tax returns.  A little bit for every vet.

 Thanks for All you do.

Bob Norton

MOAA MD Council of Chapters

President

 

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