February 17, 2010

Jobs tax credit has support, but not enthusiasm

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By Andy Rosen
Andy@MarylandReporter.com

Lawmakers expect to pass a proposal to reward employers who hire people off unemployment rolls, but some who support it are not sure how effective the move will be.

Identical bills in the House and Senate proposed by Gov. Martin O’Malley would give employers a $3,000 tax credit for hiring unemployed workers. The House Ways and Means Committee has begun working on changes to the bill, but leaders expect it to pass.

Costing up to $20 million, the tax credit appears to be the biggest exception this year to a vow by legislative leaders to stay away from legislation that adds any costs. Still, the support for it has been only mild.

“Things change, but I think fundamentally there’s support for it,” said Senate Majority Leader Ed Kasemeyer, D-Baltimore and Howard.  “The question is, will it be effective?”

House Majority Leader Kumar Barve, D-Montgomery, chairman of the revenues subcommittee on Ways & Means, said there are some issues to be dealt with but he believes the measure will pass. The subcommittee discussed the bill Wednesday.

“I don’t anticipate any hangups,” he said.

The Senate may actually boost the credit to $5,000 per hire, while maintaining the cap, said Kasemeyer, who is also vice chairman of the Senate Budget and Taxation Committee. The Maryland Chamber of Commerce testified that a larger credit would be more helpful to businesses.

Yet doubts remain that the bill will really do much to create jobs. Some have complained that the credits aren’t significant enough to offset the cost of taking on a new worker.

Sen. David Brinkley, R-Carroll and Frederick, a co-sponsor, said he wonders what the real benefit will be.

“I support the bill, and I want to help … hire some people.  And there’s some benefits involved, especially a tax benefit.” he said. “It’s a good idea, but whether it’s going to accomplish anything or if it’s just political feel-good – which I think is more the case – we’ll find out.”

Del. Sheila Hixson, chair of Ways and Means, said she wants the law to be written in such a way that it ensures that workers hired under the law stay on the job after a year. She also wants the bill to spread jobs around different fields, including high-paying professions.

“We’re going to work out all the issues,” Hixson said, “but something will be coming out.”