State digest

State digest

June 21, 2007

Treasury to intercept taxes from vendors

State and federal contractors have a new reason not to fall behind on their taxes: Their next payment for government work could be garnished.

The state has started working with the U.S. Treasury Department to collect back taxes from companies that do business with the government, Comptroller Peter Franchot said yesterday.

Under the reciprocal program, the state intercepts federal vendor payments and takes the amount owed in taxes before the rest of the payment is passed on to the company; the federal government does the same with state contract payments to collect federal taxes owed.

Franchot said he expects the effort to net the state $2 million in the first year and more in the long run.

"Ultimately, we will recover, I believe, tens of millions of dollars owed to the state," he said.

In the first week since the program started June 11, Maryland collected $49,870 from 69 federal vendors, and the federal government collected more than $42,000 from 38 state vendors, according to the comptroller's office. Franchot said Maryland is the first state to participate in the reciprocal program. Some other states were reluctant because of the added bureaucratic burden.

"With the structural deficit in front of us, I think that just makes it more urgent that we get every dollar," Franchot said.

The comptroller's office does something similar with personal income taxes by intercepting federal refunds to meet an individual's state income tax liabilities. The state has collected $19.7 million in back taxes this year under that program.

Gady Epstein

Annapolis

Brown presides for first time

In his eight years as a Maryland legislator, Anthony G. Brown managed to avoid meetings of the state Board of Public Works. As lieutenant governor, though, he was only a governor's fishing trip away from presiding over one of the biweekly meetings of the three-member board, as he did yesterday.

"For those who don't know, I'm the Lt. Gov. Anthony Brown," he told a standing-room-only audience of bureaucrats in the governor's reception room in the State House. The packed audience was there not to catch a glimpse of Brown, but to babysit the board's expected approvals of dozens of state government purchases and contracts.

Comptroller Peter Franchot promptly gave a firsthand demonstration of what the meetings can be like by speaking at greater length than Brown. Franchot explained the history of the Board of Public Works and then presented Brown with some light summer reading: a book about the history of the board.

Brown presided without difficulty over a noncontroversial agenda, and the U.S. Army Reserve officer made quick, efficient work of his first board meeting: It started almost on time at 10:05 a.m. -- an impossibility when the perennially tardy Gov. Martin O'Malley presides -- and the meeting ended before noon, another rarity.

Gady Epstein

Ocean City

Trimper Rides appeal discussed

Maryland tax assessment officials are considering an appeal by Trimper Rides and Amusements, a century-old Ocean City Boardwalk institution with a tax bill that has increased by more than $1.3 million in the past two years.

Hannah L. Byron, an assistant secretary in the state's economic development office, said officials have talked about possible ways to ease the tax burden for the Trimper family's beach-front holdings, which include the first three blocks of the Boardwalk in downtown Ocean City.

"We're expecting a ruling one way or another on the appeal," Byron said. "We're looking at the possibility of creating a special tax district or some sort of historic designation. But this is going to have to be something that's generated at the local level."

Members of the Trimper family (there are 17 shareholders) have said they may have to close the rides because they can't afford skyrocketing tax bills. The taxes are based on the value of the land, which is considerable in a town where high-rise condominiums and swanky hotels have replaced many old buildings. City officials say property values have risen 16 percent to 20 percent over the past three years.

State Del. James N. Mathias, a former mayor of Ocean City, said city and county officials have written letters of support for some kind of relief.

"That's what is happening at the local level, and it's getting a lot of attention from the governor's office," Mathias said. "I think there are a lot of people who are aware of how important the history and legacy of the Trimpers are to the town."

Chris Guy

Cumberland

Cross to honor Irish canal workers

A large Celtic cross will honor thousands of Irish workers who helped dig the Chesapeake and Ohio Canal, board members of the Canal Place Preservation and Development Authority have decided.

The vote Tuesday capped a 3 1/2 -year effort by local members of the Ancient Order of Hibernians, an Irish cultural group, to recognize Irish immigrants who made up the largest segment of workers during the canal's construction from 1828 to 1850. The canal, now a national historical park, parallels the Potomac River for nearly 185 miles from Washington to Cumberland.

The 6-foot granite cross will stand on a 3-foot base near a footbridge connecting the canal towpath to Canal Place, a retail and business development in downtown Cumberland. Michael Burkey, a leader of the Hibernians, said the group will pay $12,500 for the monument.

Burkey said in January that he hoped to hold a dedication ceremony on St. Patrick's Day 2008, which is March 17.

Associated Press

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