Maryland Gov. Harry Hughes will ask the legislature next week to increase welfare benefits by $10 million in the fiscal year beginning July 1, State House sources said today.
The proposed increase, larger than Hughes has proposed for state employes, will include a 5 percent raise for the state's 195,000 recipients of Aid to Families with Dependent Children (AFDC), and an 8 percent rise for the 20,000 disabled individuals who receive General Public Assistance (GPA).
The increases come against a backdrop of apparently strong sentiment in Maryland to increase government spending on welfare programs. A recent poll conducted by the University of Maryland Survey Research Center showed that 58 percent of respondents thought state and local governments should spend more on programs for the poor, compared to just 9 percent who favored less spending.
Word of the benefit increase for welfare recipients came on a day that also offered prospects of a $3.2 million tax break for about 50,000 mostly elderly taxpayers in Maryland.
Acting with unusual haste, in part because it would affect this year's tax returns and in part because of the political clout of the elderly, the Senate Budget and Taxation Committee unanimously approved emergency legislation that would protect some citizens from paying state taxes on their social security benefits.
The social security measure would benefit single recipients with incomes above $25,000 and married recipients filing jointly with more than $32,000 annually. Without the measure, Maryland residents in those categories would have to pay state taxes on up to half of their social security income because the state's tax laws automatically conform to federal deduction rules.
Congress adopted a tax on the social security benefits of relatively affluent taxpayers in 1983 in an effort to help replenish the Social Security trust fund. Had the Maryland portion of the tax been in effect this year, it would have provided the state with about $3.2 million, a figure that would grow by about 18 percent annually. Local jurisdictions would have received about $1.6 million.
Hughes' proposed welfare grant increases are a departure from usual practice in two respects. Not only are welfare recipients getting a greater percentage raise than that given to state employes, but also public assistance recipients, often described as the poorest of the poor, are getting larger increases than those on AFDC.
The 8 percent increase for public assistance recipients -- childless individuals or couples who are unable to work full time because of temporary physical or mental disabilities -- is an attempt by the administration to compensate for last year when they received no increase. AFDC familes received a 6 percent boost last year.
But Hughes' proposed $10 a month increase -- to $136 -- in the monthly public assistance stipend, and his $16 a month rise -- to $329 -- for an AFDC family of three, fall well short of what welfare advocates had asked the governor to provide in his budget.
"I don't think that 8 percent makes up for not giving GPA an increase last year," said Del. Nancy Kopp (D-Montgomery) after being told of the governor's decision.
The total cost of the AFDC increase would be $6.9 million and would affect about 70,000 families who benefit from the state's major welfare program that is financed equally by the state and federal governments. Children make up about 70 percent of the Maryland AFDC caseload.
Though Hughes has consistently raised welfare benefits since taking office in 1979, increasing AFDC stipends by 36 percent through last year, Maryland still ranks 26th in the nation in the level of assistance it provides families on welfare.
The legislature, which may cut but not increase the governor's budget, is likely to accept Hughes' proposed increases.
The social security tax deduction measure is expected to move swiftly through the General Assembly, where 35 out of 47 senators have lined up as sponsors of the politically popular bill. The House is expected to hold its hearing on the legislation next week.
"Seniors are powerful, that's all," said Sen. Stewart Bainum Jr., explaining the stampede of senators to sponsor the bill. Bainum, a wealthy Montgomery County Democrat who is not a sponsor but who supports the measure, said he has mixed feelings about the equity of the deduction.
"Should a multimillionaire just because he's over 65 not have to pay taxes on social security?" asked Bainum. "Income taxes should be a function of the ability to pay, not age."
Nonetheless, Bainum said he will support the bill because the federal rationale for the tax -- rescuing the Social Security trust fund -- doesn't exist in Maryland, which would only benefit from a "de facto tax increase."
Maryland Comptroller Louis L. Goldstein has informed Maryland taxpayers to defer filing their returns this year until the legislature acts on the measure, which would go into effect as soon as it passes both Houses and is signed by Hughes.