{"id":6832,"date":"2016-06-22T07:00:37","date_gmt":"2016-06-22T11:00:37","guid":{"rendered":"https:\/\/www.theseventhstate.com\/?p=6832"},"modified":"2018-04-26T10:27:41","modified_gmt":"2018-04-26T14:27:41","slug":"mocos-giant-tax-hike-part-three","status":"publish","type":"post","link":"https:\/\/www.theseventhstate.com\/?p=6832","title":{"rendered":"MoCo\u2019s Giant Tax Hike, Part Three"},"content":{"rendered":"

By Adam Pagnucco.<\/em><\/p>\n

The need to fund MCPS was one reason given by county officials for their recent hike in property taxes.\u00a0 Another reason was the effects of the U.S. Supreme Court\u2019s decision in the Comptroller of The Treasury of Maryland vs Wynne <\/em>case<\/a>.\u00a0 We examine that issue today.<\/p>\n

The Wynne case started when two Howard County residents with income from a firm that did business in other states applied for an income tax credit to offset their out-of-state earnings.\u00a0 While they received a credit against their state income taxes, they were denied a credit against their county income taxes.\u00a0 The residents sued, and the case made it all the way to the U.S. Supreme Court, where the court sided with the plaintiffs on a 5-4 vote<\/a>.\u00a0 There were two consequences for local jurisdictions.\u00a0 First, they could no longer tax out-of-state income.\u00a0 Second, they owed refunds to residents who had paid taxes on out-of-state income dating back to 2006.\u00a0 Between the two changes, Montgomery County\u2019s Department of Finance estimated<\/a> lost county income tax revenue of $76.7 million in FY17 and FY18, $31.5 million in FY19, and $16.4 million annually after FY19.<\/p>\n

When the Executive sent the council his recommended budget in March, then-current state law required that Montgomery County pay an estimated $115 million in refunds and interest<\/a> in nine quarterly installments stretching into FY19<\/a>.\u00a0 The hit in FY17 was $50.4 million.\u00a0 But Montgomery County State Senator Rich Madaleno, Vice Chair of the Senate\u2019s Budget and Taxation Committee, passed a state bill<\/a> that extended the refund payment period out to FY24.\u00a0 This reduced the county\u2019s immediate liability and the Executive responded by asking the council to reduce his recommended property tax hike from 3.9 cents to 2.1 cents per $100 of assesable base<\/a>.<\/p>\n

Senator Madaleno\u2019s legislation enabled the council to cut the Executive\u2019s original $140 million tax hike by $33.7 million<\/a> and still increase county funding for MCPS by $110 million<\/a>.\u00a0 But the County Council did not take advantage of it.\u00a0 They increased property taxes by the Executive\u2019s original amount anyway, a tax hike of 8.7 percent<\/a>.\u00a0 Why did they do that?\u00a0 We will explore that question soon, but first we will examine another source of potential reductions in the tax hike: savings from collective bargaining agreements.<\/p>\n

More in Part Four.<\/p>\n","protected":false},"excerpt":{"rendered":"

By Adam Pagnucco. The need to fund MCPS was one reason given by county officials for their recent hike in property taxes.\u00a0 Another reason was the effects of the U.S. Supreme Court\u2019s decision in the Comptroller of The Treasury of Maryland vs Wynne case.\u00a0 We examine that issue today. The Wynne case started when two … Continue reading MoCo\u2019s Giant Tax Hike, Part Three<\/span> →<\/span><\/a><\/p>\n","protected":false},"author":4,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[151,33,63,15,132,53],"tags":[1545,1368,2176,1493,1463,1485],"class_list":["post-6832","post","type-post","status-publish","format-standard","hentry","category-adam-pagnucco","category-budget","category-montgomery-county","category-montgomery-county-council","category-property-taxes","category-rich-madaleno","tag-adam-pagnucco","tag-budget","tag-giant-tax-hike-series","tag-montgomery-county","tag-montgomery-county-council","tag-rich-madaleno"],"jetpack_featured_media_url":"","jetpack_shortlink":"https:\/\/wp.me\/p4mKJE-1Mc","jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/www.theseventhstate.com\/index.php?rest_route=\/wp\/v2\/posts\/6832","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.theseventhstate.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.theseventhstate.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.theseventhstate.com\/index.php?rest_route=\/wp\/v2\/users\/4"}],"replies":[{"embeddable":true,"href":"https:\/\/www.theseventhstate.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=6832"}],"version-history":[{"count":1,"href":"https:\/\/www.theseventhstate.com\/index.php?rest_route=\/wp\/v2\/posts\/6832\/revisions"}],"predecessor-version":[{"id":6833,"href":"https:\/\/www.theseventhstate.com\/index.php?rest_route=\/wp\/v2\/posts\/6832\/revisions\/6833"}],"wp:attachment":[{"href":"https:\/\/www.theseventhstate.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=6832"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.theseventhstate.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=6832"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.theseventhstate.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=6832"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}