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State House Talks State Aid

Rosalind Helderman

Prince George's has pulled the trigger on its net taxable income proposal, a complicated budgetary issue that Montgomery delegates were warning could cause friction between the neighboring jurisdictions. Or, at least, it has kind of pulled the trigger.

We told you about the issue a little while back. You can read more here. It's complex, but the short version is that Prince George's has been quietly pushing for a few years to change the date when the state looks annually at federal income tax income returns, for purposes of deciding the wealth of each jurisdiction. The calculation is key because it helps determine how much state aid each county receives. If the date were changed, Prince George's would get a lot more aid; Montgomery would get less.

Del. Justin Ross (D-Prince George's) has now submitted a bill that would require that the state use either the current date, Sept. 1, or Nov. 1 for the calculations, whichever would result in more state aid for a given jurisdiction. (Ross's bill will get a number and be posted online tomorrow.)

The either/or option is intended to benefit counties like Prince George's, which would receive more if the date were changed, while holding Montgomery and Baltimore County harmless by allowing the status quo to remain in those jurisdictions. Both get more under current system.

Under Ross's bill, only the state budget would lose out--paying more in education aid to some jurisdictions without paring back commensurately in other areas. But Ross also included a line that says the bill would only become effective if money existed in the budget to pay for the proposal, a way to insulate the state budget during the current crisis.

So, in the end, the bill is more about laying down a marker on the issue than actually having budgetary impact. "The hope is to keep the idea alive," Ross said. "As the federal stimulus package gets wrapped up and the money comes back to the state, we want this to be in consideration. We believe there's a fairness issue here."

By Rosalind Helderman  |  February 12, 2009; 3:31 PM ET
Categories:  General Assembly , Rosalind Helderman  
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