Maryland Gov. Larry Hogan (R) on Wednesday proposed expanding a state tax break for manufacturers that create new jobs, calling for lawmakers to extend the credits to more industries and jurisdictions.
Hogan's plan, which he will introduce during the 2018 legislative session, builds upon a measure he signed this year to boost employment in the state.
The existing program provides manufacturing businesses in eight high-unemployment jurisdictions with relief from state sales taxes, along with property and income taxes, if they add at least five jobs and provide workers with skills training. Manufacturers in four other counties qualify solely for income-tax credits if they create at least 10 jobs.
Hogan's proposal would tweak the program, providing the full slate of tax breaks to all 12 jurisdictions while allowing them to apply the tax relief to three additional industries of their choices.
The governor said his plan would help the state "create an environment of economic opportunity for every Marylander, and to accelerate growth in some of the sectors where Maryland already leads."
"Counties in Western Maryland may want to incentivize companies in logisistics and distribution; counties on the Eastern Shore may want to provide incentives to grow various types of agri-business," Hogan said.
Senate Budget and Taxation Committee Vice Chair Richard S. Madaleno Jr. (D-Montgomery), who is running for governor in 2018, said Hogan's proposal could have negative consequences for the state.
"I would want to see what the impact on revenues are going to be," he said. "With the Republicans in Congress about to cut the corporate income tax, I don't know that this is the moment to be giving away more to companies, when we may not be able to afford providing health care to children."
Madaleno noted the governor unveiled his proposal on the same day the state Board of Revenue Estimates announced state revenues for fiscal years 2018 and 2019 combined are projected to be $62 million below the level previously forecast.
Hogan said 70 manufacturers have notified the state that they plan to use the existing tax-relief program, potentially creating "thousands of jobs." He said 17 companies that have already filed official applications could create about 450 new jobs in places such as Baltimore City, Prince George's County, Western Maryland and the Eastern Shore.
The governor also announced Wednesday that his administration would launch a $33 million partnership with the University System of Maryland to increase the number of degrees awarded in science, technology, engineering and math.
Additionally, he said the state would team up with Johns Hopkins University to create another cell-therapy manufacturing center in Baltimore.