ANNAPOLIS — Maryland Gov. Larry Hogan outlined a legislative agenda Wednesday that included tax relief for retirees and small businesses, repealing automatic increases to the gas tax and providing more autonomy for charter schools.
In the first State of the State address of his four-year term, Hogan said his new administration will focus on controlling spending and revitalizing the economy, with an eye toward benefiting Maryland’s families and businesses.
“Our economy is floundering, and too many Marylanders have been struggling just to get by,” Hogan said.
Hogan said he’ll introduce legislation to repeal income taxes on pensions for retired law enforcement, first responders, firefighters and military members.
Another proposal would create an exemption to the personal property tax that Hogan said would eliminate the charge for more than 70,000 small-business owners. His proposal would exempt from taxation the first $10,000 of personal property.
Hogan argued for rolling back a 2013 change that allowed the state’s fuel tax to increase automatically with inflation and for repealing the law requiring Maryland’s largest jurisdictions to charge a stormwater fee. In Frederick County, the fee known by critics as the “rain tax” stands at 1 cent per property.
The new Republican governor will have to work with a Democrat-dominated Legislature to advance his proposals, and in Wednesday’s speech, he reiterated his call for a spirit of bipartisanship.
But the response to Hogan’s address highlighted the party divides.
While Democrats sat in silence through many of Hogan’s applause lines, the address garnered rave reviews from Republican lawmakers.
“I certainly got my cardio from jumping up and down and clapping. I was, I think, the standing ovation queen,” said Delegate Kathy Afzali, R-District 4, adding that Hogan touched on numerous issues important to Frederick County residents.
For instance, Hogan’s education proposals speak directly to concerns raised by Frederick County’s charter school proponents, who have been asking for more self-governance, Afzali noted. The governor also vowed to combat the state’s heroin epidemic, a problem that has swept across Frederick County.
But Afzali’s colleagues across the aisle said the governor’s address was reminiscent of a campaign speech, chock-full of promises impossible to fulfill with the state’s current fiscal limitations.
Senate President Thomas V. Mike Miller Jr., a Democrat, said he’s receptive to financial assistance for charter schools or easing the tax burden on retirees. However, Hogan was facing a $750 million budget deficit this year, and it isn’t the right time for these initiatives, Miller said.
“I was just disappointed,” the Senate president said of Hogan’s speech. “Maybe he’ll grow into the job. I hope he will. I hope he’ll understand what’s doable.”
Frederick County Executive Jan Gardner watched the State of the State for signs of how Hogan’s proposals could affect local government budgets. She said she’s particularly concerned that Hogan’s proposed state budget is cutting Frederick County’s education funding.
The Hogan administration has said his budget provides record levels of statewide school funding, although not as much as local school officials were expecting to receive.
Gardner was pleased that Hogan committed to restoring state dollars for work on local roads, funding that was slashed during the recession years. The governor this week introduced a supplemental budget that provided counties with an additional $4 million for road repairs and an additional $19 million for municipalities.
Hogan also proposed phasing in more funding increases over the next eight years.
Still unknown is whether the governor’s proposed 2 percent cut to state agencies will place an added burden on local governments, Gardner said. For instance, the reductions might affect the local health department’s ability to provide public health services, she said.
“It could impact what (Hogan) is trying to accomplish on the heroin epidemic,” Gardner said of the cuts.
Sen. Ron Young objected that Hogan’s speech painted an inaccurate, doom-and-gloom picture of the state’s economy.
“You’d have thought we were in Alabama or Mississippi,” he said. “It’s not that there aren’t problems that can be corrected. There are. But it is a competitive state.”
Several of Hogan’s proposals lacked definition, such as his call for a healthier Chesapeake Bay, said Young, D-District 3. The senator said Hogan condemned the prior administration’s approach to environmental protection but failed to offer a viable alternative.
Delegate David E. Vogt III, R-District 4, said Hogan’s core priorities are to create prosperity and make the state more business-friendly, goals that are nonpartisan. However, Vogt said it will be difficult to persuade the Democratic legislators to repeal the stormwater fee and the automatic gas tax increases.
“I definitely think that we might be able to get strong enough support to get one of them through,” Vogt said.