O'Malley pushes tax break for family farms
Maryland Gov. Martin O'Malley (D) took the unusual step Wednesday of testifying on legislation sponsored by a pair of freshman lawmakers -- one of them a Republican -- that would cost the state money at a time when it is battling budget shortfalls.
The bill would partially exempt agricultural property from the estate tax, a goal O'Malley told the Senate Budget & Taxation Committee is consistent with his vision for preserving family farms.
"This bill is really about securing a stronger future for Maryland farming," O'Malley told the committee. "The loss of even one family farm is unacceptable. ... No farmer should ever lose their farm when they lose their parents."
The bill would exempt the first $5 million of an agricultural property from the estate tax if it is passed on to someone who pledges to continue using it for farming. The estate tax applied the property value above that would be limited to 5 percent, significantly less than is often the case now.
The Senate version of the bill is sponsored by Sen. Ronald N. Young (D-Frederick). The House sponsor is Del. Kathy Afzali (R-Frederick). O'Malley had planned to testify at the House hearing on the bill last week but had a last-minute conflict.
An analysis of the bill by legislative staff says it could cost the state $2.3 million in tax revenue in fiscal year 2012. Agriculture Secretary Earl F. Hance told the Senate committee he believes the true cost could be significantly lower but said the economic impact of preserving farms could exceed that cost, in any case.
| March 9, 2011; 3:01 PM ET
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