News from Annapolis
2018 Session:  Week 1                    Delegate Trent Kittleman - District 9A
CONTENTS

We're Back!  (So beware)

  • First three days -- two veto overrides
  • Highlights of 2017 Interim
  • Businesses: Look Out!
  • In Depth: Federal Tax Reform & Maryland
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Veto Overrides
    
       
            Despite the warm and fuzzy bi-partisan speeches from Speaker Busch and Governor Hogan on Opening Day, it didn't take the Democratic majority long to go on the attack.
            On the second day of Session (this past Thursday), the majority party voted to override two bills that had been vetoed by Governor Hogan.  
            The first of these two bills was the "Sick and Safe Leave" bill, that provides a wildly expanded definition of sick leave to every employee who works a minimum of 8 hours a week.  That means that all part-time, temporary and seasonal employees earn this leave.  Businesses with fewer than 15 employees must grant the leave, but do not have to pay the employee.  Businesses with 15 or more employees must grant PAID sick leave.
        Although two rogue Dems voted against the override, it passed the House with votes to spare, and went on to be passed by the Senate.

       The second so-called "ban the box" bill vetoed by the Governor and overridden by the legislature on Thursday provided that colleges may not inquire whether an applicant has a criminal record until after he or she has been accepted.  At that point, the college may rescind the acceptance, but that is an unlikely scenario.
       Governor Hogan as well as Republican members of the legislature contended that by preventing colleges and universities from asking up front about past convictions or incarceration, the legislation puts the safety of students at risk.
       "This is the wrong climate for this bill. It goes too far. It contains unintended consequences," said Del. Haven Shoemaker, a Carroll County Republican. He argued the bill should distinguish between nonviolent and violent crimes.
        This veto was overriden 90-50 along straight party lines in the House.
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Interim Highlights
Governor Hogan's 3-year Scorecard
  • NO TAX INCREASES!
  • Tax, toll, and fee relief totaling $700 million,
  • Added nearly 130,000 new jobs
  • Submitted three straight proposed structurally sound budgets
  • Provided record K-12 funding
  • Created our national recognized workforce development program 
  • Gone from losing 100,000 jobs to gaining nearly 130,000 jobs. 
  • Our unemployment rate stands at just 3.9 percent - the lowest rate since May 2008
  • Moved Maryland's overall economic performance from a rank of #49 out of the 50 states to #7 in the entire nation!
Remarkable Improvement in Maryland's Economy -- thanks to Gov. Hogan! 
Governor Hogan has worked tirelessly to  Change Maryland for the better.  The State:
  • Ranks 2nd in the rate of private sector job growth
  • Ranks 3rd in the rate of job creation
  • improved its overall economic performance and moved from 49th to 7th in the United States, and 
  • Maryland's unemployment rate is the lowest in a decade!
Maryland Redistricting Case to be heard by "The Supremes"

Maryland's 3rd Congressional District is so gerrymandered that a federal judge said it looks like a "broken-winged pterodactyl, lying prostate across the center of the state."
Supreme Court to hear Maryland Redistricting Case

     Early lin December, the United States Supreme Court decided to hear a Maryland redistricting case brought by seven Republian voters. 
           A three-judge panel in August ruled against the plaintiffs' request to discontinue use of the state's current congressional districts ahead of next year's midterm election. In a 2-1 decision, the court wrote that an immediate fix of the maps would have the effect of "scuttling" other legislative priorities in next year's General Assembly session.
       T he seven voters will now have an opportunity to bring their novel argument before the justices: that the redistricting amounted to a retaliation against them because of how they votedThe seven voters appealed to the Supreme Court days later.
       "This case is unlike any previous challenge to partisan gerrymandering," the Republican voters' lawyer, Michael B. Kimberly, wrote in his appeal in September. "The fact that a gerrymander successfully changes the outcome of an election is strong evidence that the burden inflicted is real."
Maryland's Department of Labor, Licensing, and Regulation (DLLR) rolls out new job-search system
New Requirement, and a new job search tool 

       On Sunday, December 4th of last year, DLLR introduced its new online system, the Re-employment Exchange Module (REX for short).
       Marylanders applying for unemployment insurance are now required to conduct an active search for work.  The claimant must record a minimum of three job contacts each week to maintain the unemployment benefits.
       To make the search process easier, the brand new REX Module will allow claimants to enter their weekly job contacts directly into the system and retain the information as a permanent work search record.  This will reduce the need for ongoing manual documentation.  
Attorney General, Brian Frosh, continued his assault against the President
Since the Legislature gave him the unilateral power last session to initiate lawsuits against the federal government, AG Frosh has been a busy beaver.
 
AG Frosh has sued the Trump administration 17 times to date, using taxpayer money to gain notoriety on the national stage.  
 
Recently, AG Frosh spoke at event and called President Trump, "lawless, self-interested, RACIST, and a LIAR."   It is patently inappropriate for an elected official, who is supposed to represent all of the citizens of Maryland, to use such bombastic language against the President of the United States, whomever he or she may be. It is even more inappropriate to be using taxpayer funds to create the forum in which to display his intolerance.
 
Hurting Maryland
 
Hurting Maryland's efforts to attract jobs .  As a result of AG Frosh's behavior, President Trump tabled locating the FBI headquarters in Maryland, and these actions will certainly not help bring the FBI's 10,000 jobs to our state.  
 
Opposing Maryland Businesses .  Recently, AG Frosh joined a multi-state lawsuit in federal court trying to stop a Maryland company from expanding.  Sinclair Broadcasting, one of Maryland's very few Fortune 500 companies, is headquartered in Cockeysville and is vying to become one of the nation's largest TV broadcasting companies. This is a business that could locate anywhere as they have holdings across our country.  Why would a Fortune 500 company, or any company, even contemplate moving to Maryland when Maryland's own AG is so anti-Maryland business?
 
Opposing Redistricting Reform.   Frosh has also opposed the redistricting lawsuit (referenced above) filed by seven Marylanders, and argued against allowing Maryland citizens their opportunity to have the Supreme Court hear their case.
 
Fortunately, the Supreme Court did not listen to AG Frosh.
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In Depth Look at:
Fixing the Fed/State Tax Conflicts
What does the federal tax reform change the current federal law?

        The most significant changes in the new federal tax reform law that affect individuals and families are the following:
  • The federal law doubles the Standard Deduction from $12,000 to $24,000 (for married couples; $12,000 for individual files)
  • The federal law eliminates the personal exemption
  • The federal law caps state and local taxes (SALT) deductions at $10,000
  • The federal law doubles the child tax credit has been doubled from $1,000 to $2,000 per child, and is now available to a broader group of people.
By doubling the Standard Deduction, the new law is likely to result in many more people choosing the Standard Deduction as opposed to itemizing, which is both complex and time-consuming. 
How the new law will affect your federal--or state--return will depend upon many individual factors.  However, below is an example of how the major factors of the new federal tax law would affect an average family: 

A married couple with three children has an adjusted gross income (AGI) of $110,000:

UNDER OLD FEDERAL TAX LAWS: taxpayer must choose between the Standard and the Itemized Deduction:
  • The couple can take a Standard Deduction of $12,000, or
  • They can Itemize their Deductions, which are made up of:
    • $10,000 in mortgage interest,
    • $4,000 in charitable contributions, and
    • $7,000 in state and local property and income taxes.
  • Since their Itemized Deductions are significantly higher at $21,000, than the Standard Deduction, this couple (and the majority of Marylanders) pay lower taxes by itemizing.
  • The couple can also claim a personal exemption ($4,150) for each member of the household which equals:  $20,750.
     
  • Subtracting the Itemized Deduction and Personal Exemption from their AGI reduces their net taxable income to $68,250
  • Under current tax brackets, the tax on their net income is:  $9,285.
  • However, they would also get a $1,000 credit for each child of:  $3,000. 
  • The credit is subtracted directly from the tax owed, reducing it to:  $6,285.
UNDER NEW TAX REFORM LAW the Standard Deduction has been doubled and most taxpayers will benefit from electing it and not having to itemize: 
  • The same couple would have a Standard Deduction of $24,000 
  • No personal exemptions (they have been eliminated)
  • Subtracting the Standard Deduction from the AGI yields a net taxable income of $86,000  ($110,000 - $24,000)
  • Under the current tax bracket, the tax on their net income is        $10,799
  • However, they would also get a $2,000 credit for each child =         $6,000
  • The credit is subtracted directly from the tax owed, reducing it to  $4,799
  • Therefore, by using the STANDARD DEDUCTION on your federal tax return instead of itemizing, many families will reap a savings; for this family, their savings is $1,486  
 WHAT HAPPENS TO MARYLAND TAXES AS A RESULT:
  • In the example above, the couple's Itemized State Deduction is $14,000 (the State and local taxes cannot be deducted from your State taxes).
  • Maryland's Standard Deduction, however, is only $4,000.
  • More Marylanders currently choose to Itemize Deductions on their federal tax return because it's more advantageous, as this example shows.
  • By doubling the Standard Deduction, the new federal tax law will likely become more advantageous for majority of Marylanders, while the Itemized Deduction will still be more advantageous for most of those who currently use it.
  • Here's the Rub:   Maryland law requires tht if you take the Federal Standard Deduction, then you must also use the State Standard Deduction.  As you can see, this reduces state deductions from $14,000 to $4,000.
There are other issues that will need to be studied and addressed, including the impact of how - if at all - the Federal elimination of Personal Exemption will affect Maryland's tax laws.  Fortunately, Governor Hogan's administration has been studying for quite some time the potential issues created by the new tax law.  Here is what he plans to do.

Governor Hogan plans to protect Marylanders from Federal Tax Bill

Governor Larry Hogan said he will seek to protect Maryland taxpayers from higher state tax bills caused by the federal tax reform.  He will submit legislation to the General Assembly shortly and believes the measure will be important and agreeable to the Democratic majorities.

"Our goal will be to leave that money in the pockets of hard-working Marylanders," Hogan said in an opening statement at a Board of Public Works meeting. "I am confident that our partners in the General Assembly who have expressed concern over the impact of this tax reform bill will support us unanimously in protecting Marylanders who could be negatively affected. Protecting taxpayers should be a bipartisan issue."
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Businesses, Look Out!
"Fair Scheduling"  will be coming back. . .
         Versions of this bill has been introduced as the "Fair Scheduling Act" in the last two Sessions.  Thus far, the bill hasn't made it out of committee.  Essentially, the bill does the following:

        This bill requires an employer to post the employees' initial schedule at least 21 days before the 1st day the employee is scheduled to work.  The employer must also notify the employee within 24 hours of any changes made to their initial schedule and provide them with revised work schedule.  
        The employer may not require the employee to work hours not include in their initial schedule and provide them with a revised work schedule.  The employer also may not require the employee to work hours not included  in their initial work schedule without written consent from the employee or require the employee to find another employee to cover any hours the employee is unable to work.
        Within 21 days before the 1st scheduled shift, the employer may change, reduce the length of a scheduled shift, cancel an employee's scheduled shift, or change the start or end time of an employee's scheduled shift if it does not alter the total hours scheduled for work during a work week.

      I described this as the worst bill I've seen introduced in the three years I have been a Delegate -- and I no longer own a small business.   Let's hope we can forestall passage of this bill once again.
Delegate Trent Kittleman
District 9A, Western Howard County and Southern Carroll County (Sykesville)
Room 202, Lowe House Office Building
6 Bladen Street,   Annapolis, MD 21401
410-841-3556  *   [email protected]
Interim Office
3000 Kittleman Lane,  West Friendship, MD 21794
301-661-3344  *   [email protected]
Administrative Aide: Chelsea Leigh Murphy