Refundable tax credit is urged to help working poor in Md. But Senate president gives plan little hope of passing

January 28, 1998|By JoAnna Daemmrich | JoAnna Daemmrich,SUN STAFF

Seeking to share Maryland's greater prosperity with the working poor, several lawmakers and advocacy groups want to allow such families to cash in their earned income tax credits.

Under a formula that considers family size, income and other factors, Maryland gives low-wage families a credit that reduces or eliminates their state tax bill. But unlike the federal government, if the credit is greater than taxes owed, the state does not send them a check.

A proposal unveiled yesterday would allow them to receive a payment of up to 15 percent of their federal credit.

"It rewards work rather than idleness," said Sen. Barbara A. Hoffman, chairman of the Senate Budget and Taxation Committee.

But the Baltimore Democrat and other proponents acknowledged theirs would be an uphill battle. The refundable tax credit would cost $30 million a year, and the governor did not include it in his budget.

Senate President Thomas V. Mike Miller gave it little chance of passage.

"We already have to cut from the budget, and there are a lot of programs that have been promised to a lot of people -- education moneys for the counties, money for the developmentally disabled, health care for the poor," Miller said. "Something has to give."

Even though Maryland ranks as one of the wealthiest states, one in seven children lives in poverty, according to Steve Bartolomei-Hill, co-author of a recent study for the Maryland Budget and Tax Policy Institute. The study found 78,000 children growing up in homes where at least one parent worked but barely made ends meet.

"There's a segment of our population that's not doing well," said Kevin Appleby, deputy director of the Maryland Catholic Conference. "They're playing by the rules. They're working hard but they're losing ground."

In the 1996 tax year, 183,000 Marylanders claimed the credit on their state tax forms. Under the proposal, a single parent with two children who earned $9,828 a year would receive a $548 payment from the state.

Republican Del. Robert L. Flanagan of Howard County called the plan "a handout more than a helping hand" and instead urged tax relief for all Marylanders. But Hoffman and Del. Sheila E. Hixson, a Montgomery Democrat who has introduced a bill in the House, said they hope to help families getting off welfare.

Pub Date: 1/28/98

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