Transcript: Tax Relief and Economic Growth Announcement – January 11, 2022
GOVERNOR HOGAN: Good afternoon. Joining me is our Chief Legislative Officer and Senior Counselor Keiffer Mitchell, and I’m also pleased to have Commerce Secretary Mike Gill who, as of today, is once again leading the Maryland Department of Commerce. Welcome back, Mike.
Nothing is more important than our continued economic recovery. Even with all the pressures of the pandemic, inflation and the supply chain crisis, our state continues to have one of the best economic recoveries in the nation. Our unemployment rate is the lowest that it’s been since before the pandemic, and we’re adding jobs more than twice as fast as the rest of the country. CNBC recently named Maryland as the single most improved state for business in America. We achieved that by taking swift and decisive actions and by keeping much of our economy open throughout the pandemic. We provided more than $2.1 billion in state and economic relief measures. At the start of last year’s legislative session, I introduced the Relief Act of 2021 as emergency legislation, which included the largest tax cut in state history, and included $1.45 billion in urgently needed tax relief and economic stimulus for struggling Maryland families, small businesses, and those who lost their jobs due to the pandemic.
We sent more than 420,000 direct relief checks to Marylanders in need, and more than $100 million in additional grants to small businesses, to nonprofit organizations, in order to have a real lifeline to those hardest hit, people who were struggling to get by and small businesses desperately trying to stay afloat.
Last summer, we launched Project Restore, a $25 million initiative to help incentivize new business growth in order to create more jobs on main streets and in downtowns and communities all across our state. Because of all of these efforts, and because we’ve had such strong health and economic recovery, last fall, I was able to report that tax revenues are expected to be $1.6 billion higher than projections, and that the state of Maryland is now projecting a $2.5 billion surplus, which is the largest surplus ever in the history of our state.
As I said when I announced this surplus, we are not going to squander it on mandated spending increases or special interests. We’re going to invest it in the hard-working people of Maryland, and we’re going to leave our state in better shape for future generations.
I announced a five-point frame work for how the state of Maryland would utilize the surplus, which includes bolstering and increasing the state’s rainy day fund, major relief for Maryland’s overtaxed retirees, direct tax relief for working families across the state, additional relief for underserved Marylanders, and enhancements for state employees.
Today, we are announcing the largest tax cut package in state history, which will deliver more than $4.6 billion in much needed relief for working families, for small businesses and retirees. I still hear nearly every day from folks who say I love the state of Maryland, I’ve spent my whole life here, and I don’t want to leave my kids and grandkids, but I just simply can’t afford to stay here on a fixed income.
Just last week, when Marylander told our office, quote, a growing senior population means more commerce and more economic vitality and a bigger tax base pay for more state services. I couldn’t agree more. But it’s not just good for our economy, it’s also good for our quality of life if our seniors can have the peace of mind to stay here where they spent their lives working and raising a family and where they contribute so much.
This is the one area where we are still not competing effectively with other states. And even though we’re one of the best places in America to live, and we have so many great things going for us, we continue to lose many of our best citizens. Over the course of our administration, we have been successful in getting targeted retirement tax relief passed, especially for our hometown heroes — our law enforcement, fire and rescue, corrections, and emergency personnel, as well as for military retirees. But that’s not enough.
Together, with our friends in the legislature, we need to take bolder steps. So today, we are announcing the Retirement Tax Reduction Act of 2022, which will eliminate every single penny of state retirement taxes in Maryland, providing $4 million in relief to Maryland’s deserving retirees. Our proposal will be phased in over time, beginning right away. Eliminating retirement taxes is one of the most important things that we can do, and something we’ve been trying to accomplish for seven years.
In the past, the legislature has failed to support critical relief for senior, and each year when I proposed it, they almost immediately reject it out of hand. And they always have a similar response. They say, we just can’t afford it. Well, with our increased revenue, our record surplus, and our growing economy, our fiscal health is now stronger than ever before. So we can afford it, and we must do it. What we cannot afford is continuing to lose more retirees year after year. All that is needed is the political will on both sides of the aisle. And I’m ready and willing to work with anyone to finally get this done for Marylanders.
We’re also introducing the Working Marylanders Tax Relief Act of 2022, which would make the enhanced earned income tax relief from our Historic Relief Act of 2021, the tax cut, make it permanent, in order to provide working Marylanders another $650 million in tax relief. This was one of the most successful provisions of the Relief Act. It was passed nearly unanimously, but with the support from Democrats and Republicans, and hard-working families should not have to worry that this critical tax relief is going to be taken away from them.
One of the most transformative initiatives that we’ve launched since I became governor is More Jobs for Marylanders Act, an act that in 2017 and then expanded again in 2019, this critical program incentivizes and encourages manufacturers and other businesses to create more jobs where we need them most. The results of the More Jobs for Marylanders initiative speak for themselves. Maryland is no longer losing manufacturing jobs. We’re adding them. We went from being 50th in America to adding more manufacturing jobs in the last five years than 39 other states.
The program has already helped dozens of companies including Caldwell Manufacturing, Clipper City Brewing, Alliant Tech Systems Operations, just to name a few. And nearly half of all the major economic development projects that we have in the pipeline here in Maryland are manufacturers, and they represent more than 10,000 new jobs.
To continue to incentivize even more investment and even greater job creation across the state, today we are announcing the More Jobs for Marylanders Act 3.0. In order to extent the More Jobs for Marylanders program for another five years through 2027, to continue to make our state an even more attractive place for manufacturers to start new businesses and to create jobs.
Today, we are also proposing additional small business tax relief by eliminating the $300 annual filing fee that is required for any entity that registers with the state electronically. It’s another needless and costly piece of red tape for our smallest of businesses, and we’re doing away with it altogether. We’re also going to eliminate the $100 annual filing fee for family farms. This reform would make Maryland the first state in the country to provide a zero fee option for all businesses.
Finally, we are introducing the Project Restore Act of 2022 to codify and make permanent Project Restore, which is one of our most successful COVID-19 recovery initiatives. And we have already had an overwhelming response to the program, awarding grants to businesses and nearly every single jurisdiction. And this bill will allow us to drive even more jobs and investments to our small towns and main streets for years to come.
With all of the important announcements that we’re making today, we are continuing our focus on delivering exactly what we promised, real long-term relief for hard-working Marylanders, small businesses and retirees, creating more jobs and more opportunity in every corner of the state and continuing to lead the nation in economic recovery so that our state comes back even stronger and better than ever before. With that, we would be happy to take some questions.
GOVERNOR HOGAN: Well, that’s exactly what we have been doing for two years. The Relief Act that I introduced last year as emergency legislation passed either unanimously or nearly unanimously with the help of my colleagues across the aisle. And what I announced today was expanding on the successes that we all achieved together by working in a bipartisan way. That was the largest tax cut in history, and now we’re taking it to another level and helping even more people.
GOVERNOR HOGAN: Yeah. I mean, we’re going to lay out our budget next week, but we can show going up for the next five years projections that we still have a surplus. We’ve done long-term budgeting and all that is taken into account and we can afford to do it. I don’t know if I mentioned it earlier, but when I was elected governor, we had a deficit and now we have a $2.5 billion surplus. We’ll have that for the foreseeable future.
GOVERNOR HOGAN: Yeah, that’s a great question. This is something that we have a huge team of people inside and outside the state government working on day and night, seven days a week. I receive briefings every day. We have provided two detailed briefings to the presiding officers of the legislature. We provided detailed briefings to the Board of Public Works and we briefed our entire delegation on the status of this.
I believe that health department folks and some of the cyber experts may have more to say about that later this week. I can’t share a lot more information or detail about it today because it’s an ongoing federal investigation of, you know, criminal activity that I can’t compromise. But I think we want to be as transparent as possible, but we also want to catch the bad guys. You know, a loft work has already been done, but there’s still more work to be done. The concern is that if you try to flip everything back on too fast, you run into the same problems they’ve had in states across the country, like in Texas where hundreds of millions of dollars and people’s data is compromised. That’s not happened here, but it’s slow to get systems back up and they’ve done work-arounds. It’s not a great situation, but it’s a lot better than it could be.
GOVERNOR HOGAN: We haven’t got the data. We’re not getting it from her office. You know, she instead lashed out and started attacking me personally when all we’re looking for is the data. We’re going to continue to press for that.
GOVERNOR HOGAN: I would rather not say.
GOVERNOR HOGAN: I’m about to start the last legislative session, and a week from today, I will begin my eighth year as governor. So we have a little more than a year left in this job. But it’s a pretty all-consuming job. I’ve said a million times, I don’t have a burning desire to serve in the U.S. Senate. I do have a burning desire to continue to focus on this job completely every day. And that’s what we are doing. We’re in the middle of a couple of crises which we’re trying to handle as best we can. We have a group of people working. I’m proud of the work they’ve been doing over the past seven years. We will continue to finish the job and, you know, we’ve got a little bit more than a year left. We’re going to land the plane and finish the job they elected us to do.
I know a lot of people are speculating. My answer is the same every time they asked me the last year, I’m not really interested in future political possibilities might be. I’m just focused on the day job.
GOVERNOR HOGAN: I’ve said the same thing just about, and there’s plenty of time to worry about that. We just started 2022. Certainly don’t have to start talking about 2024.
GOVERNOR HOGAN: No. Look, we are one of the most vaccinated state in America. We’re 92.6% vaccinated. I’m not sure how much better you can do than that, whether you have a mandate or not. We’re doing much better than most of the other states. We’re going continue to be very successful with the strategy we’ve done for the past 22 months, which I think is the way most people are happy with.
GOVERNOR HOGAN: I don’t see how it couldn’t pass, quite frankly. This is something that people are demanding for a long time. It was the reason I was elected governor twice. It has overwhelming enormous support across the state. We can afford to do it. I did convince them to pass the largest tax cut in state history last year in the middle of the pandemic, which no other Republican cover nor in America has passed a tax cut with a Democratic legislature. Why we couldn’t expand on that and do it again, I don’t know. I don’t quite agree — you know, we actually did pass retirement tax cuts four times. We proposed eliminating all retirement taxes for military retirees, and they took a little chunk of it and said, we’ll eliminate the first $10,000 of taxes, and then we did the same thing for hometown heroes with cops and firefighters and first responders. And they said we’re not going to eliminate it, but we’ll give you the first $10,000. I came back again for all of it. They doubled it. So we got four different retiree tax cut bills passed already.
And nobody actually disagreed with the goal of eliminating the retirement taxes. They simply said we can’t afford to do this. And now we’re going to show them that we can afford to do it. And it’s what we should do. Anybody else?
GOVERNOR HOGAN: We did do that for a year and a half. We had a longer moratorium on evictions, six months longer than any other state in the country. We started it before the federal government provided it. Right now, our eviction problem is lower than it’s been ever, much lower than when the pandemic started. With all the relief we put out, it’s really not as big of a problem as some of the advocates would lead you to believe. Thank you very much.