February 19, 2010

Senate panel boosts jobs tax credit to $5,000

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By Erich Wagner
Erich@MarylandReporter.com

Businesses that hire unemployed workers could get a $5,000 reward this year, under a proposal advanced Friday by a Senate budget panel.

The Budget and Taxation Committee approved a change that would increase the value of the tax credit from $3,000, putting it in line with pending legislation on the federal level. The move keeps the overall cap on the program at $20 million. The program is essentially the only new big ticket spending item for next year’s budget.

Sen. James “Ed” DeGrange, D-Anne Arundel, proposed the amendment to try and garner better support from the business community, which has given the legislation mixed reviews.

“[The amendment] would make it more enticing for businesses to want to do it,” DeGrange said. “The business community that came and testified in support of this, I think they were recommending to go to $5,000 instead of [$3,000].”

But some senators feared that by increasing the size of the credit without raising the cap, the bill would have less of an impact in getting people back to work.

Sen. David Brinkley, R-Carroll and Frederick, was concerned that the total number of people who could be hired using the proposal would drop. He questioned how discriminating businesses would be about the amount of money available.

“If a tax credit is on the table, they’ll take it,” Brinkley said. “I’ll support the bill, amended or not, but I’d prefer 6,000 as opposed to 4,000. We want to get them paying income taxes again.”

Senate Majority Leader Edward Kasemeyer, D-Baltimore and Howard, said increasing the credit will help ensure that the proposal works to put at least some people back to work.

“I’d rather have the proposal work with fewer people than have it not work at all,” Kasemeyer said. “Putting it at $5,000 will get it to work.”

The bill now moves to the full Senate for consideration.