Del. Johnson: Legislation to improve Maryland's standing among retiree-friendly states
By Del. Steve Johnson
Mar 28, 2019 at 11:00 AM
One of a series of weekly commentaries from Harford County state legislators regarding the 2019 Maryland General Assembly session.
When I started campaigning to represent District 34A as a delegate in Annapolis, I detailed several issues of importance on my website and on the trail. They became the core of my political agenda in Harford County. One of which was retirees and seniors residing here in our state.
Maryland ranks as one of the least "retiree friendly" states in the country in terms of taxation, energy costs and housing. We have almost 1 million retirees residing in Maryland. They create jobs and provide hundreds of thousands of hours of volunteer work in schools, nonprofits, hospitals, libraries, museums and cultural venues each year.
Retirees also make up a large part of Maryland's' population that has expendable income, yet we are pushing them out to spend that income and support other states' economies. For instance, Pennsylvania retirees are tax exempt from pension and Social Security taxes as well as other types of retirement income. Delaware retirees are not taxed on Social Security and railroad benefits. Their pension is excluded from taxes up to $12,500 for ages 60 and older. Virginia retirees are not taxed on their Social Security and withdrawals from pension and retirement accounts are tax deductible up to $12,000. Finally, North Carolina is also retirement tax friendly. It does not tax Social Security retirement benefits and the state has low property taxes. By creating a competitive tax exemption, we can help Maryland be more of an attractive state for retirees to continue to live.
As a delegate I have vowed to work with other legislators and take a look at equalizing tax subtraction from income, restoring itemized deductions and equalization of senior taxpayer deductions. I feel that addressing these three issues can help Maryland be an attractive state for seniors and retirees to continue to live, create jobs and volunteer.
That is why I have introduced the Income Tax Subtraction Modification bill. This bill has bi-partisan support and gives a subtraction modification of the Maryland income tax under certain circumstances. For instance, a certain amount of retirement income attributable to a resident’s employment as a correctional officer, a law enforcement officer, or a fire, rescue or emergency services worker could be exempt.
In a hearing before the Ways and Means Committee, Jeffrey Buddle, President of the IAFF Local 1664 stated “If enacted, this legislation would put Maryland in a much better position with neighboring states and provide an incentive for retired public safety employees to remain in the state in which they faithfully served the community over the course of their careers.” And Michael Rund, President of the Professional Firefighters of Maryland, added “Making our state as welcoming and friendly as possible to retirees is simply the right thing to do. After years of our members retiring out of state, this tax modification is a great step to ensuring that the people who spend their lives in service to others are given the support and tax relief that they deserve to stay and retire in Maryland.” I was honored to have these gentlemen testify on behalf of my Hometown Heroes Bill and look forward to working together in keeping retirees in Maryland.
In addition to this legislation, we have worked in a bipartisan way to make Maryland a leading state by funding education and increasing the minimum wage. We have worked on a budget that offers record spending for school construction while also implementing the first steps of the Kirwan recommendations. And we have worked on offering legislation that addresses minimum wage while factoring in the concerns of the business community. I feel the strides we have made in Annapolis will make for a stronger Harford County and State of Maryland.