Prince George's, Montgomery Disagree on Income Calculation
Tuesday, April 4, 2006
State lawmakers from Prince George's and Montgomery counties are tussling unexpectedly over millions of dollars in education aid in the waning days of this year's legislative session.
At the crux of the dispute: How wealthy is Montgomery County?
Prince George's lawmakers say Montgomery has benefited unfairly from a recent change in federal law that allows taxpayers to request an automatic extension for filing income tax returns as late as Oct. 15. Previously, automatic extensions were available for filing as late as Aug. 15.
The two-month federal income tax date shift affects a formula used to calculate each county's wealth level and, from that, its eligibility for state education funding under the Thornton Commission recommendations enacted in 2002. In general terms, the richer the county, the less aid it is supposed to receive.
For the formula, the state gathers income data every year as of Sept. 1. So returns filed after Sept. 1 are not included.
Montgomery lawmakers say they have strongly supported education funding for Prince George's in recent years and reject the suggestion that their own county is receiving more money than it deserves.
The state legislature is reviewing the competing assertions.
A state Department of Legislative Services analysis cited by Del. Doyle L. Niemann (D-Prince George's) found that late income tax filers with high wealth were disproportionately concentrated in two counties: Montgomery and Baltimore. The result, Niemann said, is a funding gain for Montgomery and, to a lesser extent, Baltimore County, at the expense of Prince George's, Baltimore city and 18 other jurisdictions.
To address the issue, Niemann introduced a bill to move the state's income data- gathering date to Nov. 1. The bill, which would affect state aid payments after July 2007, is expected to get a hearing today in the House Ways and Means Committee.
"It's basically a question of fairness," Niemann said. "If we're going to measure income, let's measure income. Either we're going to measure the income of a jurisdiction or we're not."
A state analysis released yesterday suggests that Montgomery would lose from $19.1 million to $25.9 million in fiscal 2008 under Niemann's bill, while Prince George's would gain $18.9 million to $24.9 million. According to the analysis, Anne Arundel County would gain from $3.3 million to $4.2 million; Howard County, from $1.7 million to $1.9 million; Frederick County, from $2.3 million to $2.9 million; Charles County, from $3.1 million to $4.4 million; St. Mary's County, from $1.4 million to $2.1 million; and Calvert County, from $900,000 to $1.2 million.
Prospects for Niemann's bill are uncertain. Del. Sheila E. Hixson (D-Montgomery), chairman of Ways and Means, said she is not interested in changing the funding formula this year.
Del. Richard S. Madaleno Jr. (D-Montgomery) said there was too little information for lawmakers to make a major change to an education funding formula on short notice. In addition, he said, Montgomery lawmakers can point to other funding formula elements that might be disadvantageous to their county, such as property tax assessment calculations.
"If you want to reopen the formula," he said, "you don't just reopen one variable. Everything is going to be on the table."