Business Groups Warn Against Tax Hikes to Fund Kirwan Reforms

    Cailey Locklair, president of the Maryland Retailers Association

    Business groups responded Tuesday evening to a Kirwan Commission funding plan put forward by a labor union that included corporate tax increases.

    “The union said they propose raising taxes on ‘profitable corporations and super-rich individuals,’ but large employers can easily pick up, move to a business-friendly state, and take their employees with them. We’ve already seen it happen in Maryland,” Mike O’Halloran, state director of the National Federation of Independent Business in Maryland, said in a statement. “Then any massive increase in school funding falls on the backs of small businesses and all taxpayers who are left holding the bag.”

    SEIU Local 500 released a 35-page report Tuesday morning outlining a series of proposed tax changes that could generate $1.6 billion annually to fund education reforms proposed by the Kirwan Commission on Innovation and Excellence in Education.

    The “Funding our Future” report proposes several changes including:

    • Initiating combined reporting for multi-state corporations based on the amount of business they conduct in Maryland;
    • Eliminating some tax credit and subsidy programs for businesses; and
    • Establishing a new 7 percent income tax rate for Marylanders who earn more than $1 million annually.

    NFIB, the Maryland Chamber of Commerce and the Maryland Retailers Association said in response that any drastic increase in state taxes will ultimately fall upon taxpayers and small businesses. For years in Annapolis, the business groups have opposed legislation to achieve some of the SEIU proposals.

    “This union-backed plan of more taxes will create an untenable situation for small businesses, their employees, and Maryland taxpayers,” Cailey Locklair, president of the Maryland Retailers Association, said. “Labor unions are going back to the well with this plan. The public understands more taxes mean less opportunities for growth.”

    Christine Ross, president and CEO of the Maryland Chamber of Commerce, said the SEIU proposals would hurt small businesses in Maryland, which make up 92 percent of companies in the state and employ more than a million people.

    “The Maryland business community has a longstanding commitment to supporting education, and this misguided proposal will hamper our ability to continue to invest in educational programs and workforce development opportunities for students across the state,” Ross said.

    The Kirwan Commission on Innovation and Excellence in Education will meet Thursday in Annapolis for a day-long meeting which could culminate in final decisions on how to move forward with education reform plans and how to fund them.

    Current estimates would require state and county education funding to steadily increase over the next decade until an additional $4 billion would go to public schools in 2030.

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    Danielle E. Gaines
    Danielle Gaines most recently worked for Bethesda Beat covering Montgomery County. Previously, she spent six years at The Frederick News-Post as the paper’s principal government and politics reporter for half that time, covering courts and legal affairs before that. She also reported for the now-defunct The Gazette of Politics and Business in Maryland and previously worked as a county government and education reporter at the Merced Sun-Star in California’s Central Valley.