One of Maryland’s most powerful unions has urged legislators to pass a bill aimed at tallying the costs and benefits of tax breaks used to spur development within the state.
AFSCME, which represents 45,000 government workers across the state, submitted written testimony supporting SB 733, Task Force to Study Transparency in Tax Incentives. The bill would authorize a state body to analyze a variety of tax incentives and subsidies that have been used extensively to lure developers to build across the state.
“Tax incentives are a significant tool used by governments to promote economic development and attract investment. However, without proper oversight and transparency measures, there is a risk of misuse or ineffectiveness,” the union wrote.
“Establishing a task force will help ensure that tax incentives are administered accountability and in the best interest of the public.”
AFSCME is the third major union to back the legislation. Previously both the Maryland AFL-CIO and the SEIU, which represents hospital workers, expressed support for the measure.
The bill passed the senate with a 47-0 vote and is now set to go before the Ways and Means Committee on Tuesday. Committee Chair Delegate Vanessa Atterbeary did not respond to a request for comment on if she plans to support the measure.
SB 733 was introduced by State Senator Jill Carter. The bill would authorize a task force to gather data and recommend processes to increase transparency and accountability for how tax breaks are used. It would also seek ways to measure how effective the subsidies are and if they deliver equitable—or even quantifiable—outcomes.
Carter said the growing support from unions is a recognition that transparency regarding tax incentives has been lacking.
“If you want to give a tax break to working people, it’s unaffordable,” Carter told TRNN. “But if it’s a developer, there seems to be no issue.”
“We have a moral imperative to do better.”
The incentives in question include a variety of tax breaks with innocuous sounding acronyms like TIF and PILOT. TIFs (Tax Increment Finance) allow developers to invest up to 30 years of future property taxes into construction costs and infrastructure rather than these taxes being paid to the city. PILOTs (Payment In Lieu of Taxes) phase in taxes over time, offering a discounted rate for anywhere between 10 to 25 years.
Both are responsible for incentivizing the bulk of new development in Baltimore.
But the city also must, in part, pay for breaks tied to an array of state programs. Among those are the Brownfields Revitalization credit, which offers incentives to rehabilitate environmentally degraded property, and Enterprise Zone credits, which award breaks to businesses that add jobs and build in impoverished neighborhoods.
This report is part of our ongoing investigative series which delves into the use of tax breaks to subsidize development in Baltimore and beyond. The centerpiece of this series is the documentary, Tax Broke, a film that revealed Baltimore city has granted hundreds of millions of tax breaks to spur growth without requisite transparency.
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