On Thursday afternoon, Maryland lawmakers sitting in a committee hearing room in Annapolis saw something that hadn’t been seen in more than eight years: their governor.
Gov. Wes Moore sat at a witness table and made a pitch for one of his signature priorities — a tax break on military retirement income — something that the prior governor, Republican Larry Hogan, pointedly never did in his two terms.
“I know it has been awhile since since the governor has had a seat at this table,” said Moore, a Democrat, as he addressed the House of Delegates Ways and Means Committee. “And I’m honored to be here.”
The committee chairperson, Del. Vanessa Atterbeary, welcomed the governor.
“I have been honored to walk these halls for eight years, and in eight years, I have not had a governor come down and testify on any piece of legislation,” said Atterbeary, a Howard County Democrat. “So I would like to thank you for showing up and demonstrating that you are going to be a partner with this legislature.”
Moore urged lawmakers to support his plan to exempt more military retirement income from taxes, saying it’s “among the most impactful” bills that lawmakers will consider this year.
Currently, the first $15,000 of military retirement income is tax-free for those aged 55 and older or $5,000 for those younger than 55. Moore’s Keep Our Heroes Home Act would raise the tax-free amount to $25,000 this year and $40,000 next year, regardless of the veteran’s age.
At full phase-in, the state would lose out on $33 million in tax payments, according to a nonpartisan analysis of the proposal. Local governments would miss out on millions as well.
Moore argues that cutting the taxes on military retirees will keep Maryland on par with other states in the region who have low retirement taxes, so that veterans are less likely to move away. He hopes the tax cut would effectively pay for itself, because many retirees will work post-military jobs and pay income and other taxes.
“The true benefit of this bill cannot be reflected in the dollars and cents. The true benefit of this bill is that it’ll keep people like the ones who are behind you here in the state of Maryland,” gesturing to military veterans, some wearing veterans organization apparel, in the hearing room audience.
Several representatives of veterans groups and the AARP testified in favor of the bill. Although the bill enjoys broad bipartisan support in concept, General Assembly leaders have indicated that the governor’s proposal might be changed.
House of Delegates Speaker Adrienne A. Jones, a Baltimore County Democrat, said in a statement earlier this week that delegates will carefully weigh the costs and benefits of all tax proposals.
And Senate President Bill Ferguson told reporters that the veterans tax credit will be considered as part of the entire state budget and other tax credits. He said “something will move forward,” but it may not be Moore’s exact proposal.
Ferguson said options for negotiation could include working in first responder retirees, such as law enforcement, firefighters and emergency responders, or limiting the tax credit to military retirees who are currently working in the state.
“We want to make sure that it’s narrowly focused to that because if we expand it further, we just don’t have the resources to sustain it,” Ferguson said.
Both leaders said they welcomed the governor’s participation in the legislative process.
Moore’s approach has been markedly different from his predecessor Hogan, who flatly said that governors don’t testify before lawmakers. The three governors before him did periodically testify on their high-priority requests of the legislature.
Moore has made a point of saying that he wants to work with members of the General Assembly. He’s been periodically inviting them to meetings at the governor’s mansion, and then posting photos on social media.
On Thursday, for example, he met with the influential Legislative Black Caucus of Maryland, and on Wednesday, the governor met with the Republican leaders from the House and Senate.
This morning I invited leadership of @MDSenateGOP and @MDhouseGOP @SenatorHershey and Leader Buckel to join me for breakfast.— Governor Wes Moore (@GovWesMoore) February 15, 2023
I’m grateful for their service to our state and for our conversation on ways to work in partnership, and work across the aisle, to move Maryland forward. pic.twitter.com/vljT20wLuP
Moore also has enlisted the help of Lt. Gov. Aruna Miller as part of his lobbying strategy with lawmakers. Miller, a former state delegate, was the chief promoter of another one of the administration’s bills, the Family Prosperity Act, on Thursday.
Miller served on the Ways and Means Committee when she was a delegate, and members of the committee welcomed her with a cheerful drumroll on their wooden desks.
The Family Prosperity Act would take a temporary expansion to Maryland’s portion of the Earned Income Tax Credit, enacted in 2021, and make it a permanent change. It would also adjust the Child Tax Credit so that more families would qualify. All told, the changes would cost the state about $171 million.
“Both of these programs are proven to significantly reduce poverty,” Miller said.
The Family Prosperity Act is one of the first steps that Moore is making toward his “audacious goal” of ending child poverty in the state.
“The Family Prosperity Act is one of the most impactful ways in which to address child poverty,” Miller told lawmakers. “Maryland has the highest median income in the nation, which means we’re the richest state in the nation. But yet 12% of Maryland children live in poverty.”
In addition to the Keep Our Heroes Home Act and the Family Prosperity Act, the House Ways and Means Committee heard testimony on a few other bills proposed by the governor. No vote is scheduled yet, and the bills also are awaiting hearings in the state Senate.