Maryland’s Democratic legislative leaders on Monday proposed a matching-funds program for middle-income and poor families who use the state’s college-saving plan.
Under legislation supported by Senate President Thomas V. Mike Miller Jr. (D-Calvert) and House Speaker Michael E. Busch (D-Anne Arundel), families who deposit money into Maryland’s 529 College Savings Plan would receive a matching annual donation of $250 from the state.
About 40 Democratic lawmakers joined Miller and Busch in announcing the proposals during a Monday news conference as part of a larger package of legislative priorities aimed at helping working-class families. The other measures they touted would address pay equity for women and help residents save for retirement rather than relying solely on Social Security. The bills were the first in a series of packages that will be presented by leaders of the majority-Democratic General Assembly in the 90-day legislative session.
“The middle class has been squeezed since the Great Recession,” Busch said. “We need to help families feel like they have economic security and ensure their kids have access to opportunities for success that my generation had.”
In addition to the matching grants, the Education Affordability Act of 2016 also would create a tax credit of up to $5,000 for up to 1,000 residents who have student-loan debt exceeding $20,000. The amount of the credit would be based on the individual’s debt and annual income.
The matching-fund program, which is similar to the employer match for a 401(k) plan, would be scaled based on income. A family with income between $175,000 to $225,000 would have to contribute $250 to receive a $250 match. An individual or couple who earn less than $100,000 would receive a $250 match for contributing $25. Households with incomes above $225,000 would not get a match from the state.
State officials said Maryland follows a national trend showing that 529 plans are used largely by wealthier residents. By offering a match, legislative leaders are hoping that more working- and middle-class families will be encouraged to save for college.
The college-affordability measure, which would cost the state about $5 million for the first year of implementation and $10 million annually by 2020, is the second college-affordability effort from key policymakers this year. Gov. Larry Hogan (R) last week signed an executive order to create a scholarship program that provides $6,000 to students who graduate early from high school. Hogan’s office did not take a stance on the Democratic proposals Monday.
The pay-equity legislation, sponsored by Sen. Susan C. Lee (D-Montgomery) and Del. Kris Valderrama (D-Prince George’s), would make it unlawful for employers to exclude women from prime job opportunities and prohibit companies from retaliating against employees for sharing salary information with co-workers. It would not require employers to disclose salary information.
The measure would also clarify that the state’s definition of wage discrimination includes unequal pay for women and men who do the same work but in different offices. Some courts have interpreted the existing pay-equity law to allow for such disparities. Additionally, the legislation would strengthen requirements for employers to prove that pay differentials relate to job performance rather than gender.
Similar pay-equity bills have been introduced by Valderrama and Lee in past years but have been unsuccessful, with opponents arguing that existing laws provide adequate protections for women and that additional measures would create a burden on businesses.
Valderrama said the bill is about fairness in the workplace.
This is the first year that a pay-equity bill has the backing of Miller and Busch, who spoke in personal terms about women being poorly treated. The House speaker said his mother earned half of what her male colleagues at the state Motor Vehicle Administration were paid for the same job. He said his mother, who was single, also could not obtain a credit card or a car loan, adding that he eventually had to sign for the loan himself.
“Things have changed for the better, but we still have a way to go,” Miller said.
Democratic lawmakers also promised legislation to provide what Del. C. William Frick (D-Montgomery) described as a “universal retirement savings program” that would ensure all Marylanders have access to individual retirement-savings accounts through payroll deductions.
Frick said the bill would be ready “in coming weeks.”
Miller and Busch have called retirement security a “looming crisis” in Maryland, where 25 percent of the population is projected to be of retirement age by 2030.
The legislative leaders last year set up the Commission on Maryland Retirement Security and Savings to explore ways to help residents save for retirement. The panel has not submitted its recommendations to the General Assembly, despite setting a tentative deadline of December 2015 for completing its work.