Maryland State Wire

ANNAPOLIS - Carol Park, a senior policy analyst for The Maryland Public Policy Institute, believes Gov. Larry Hogan’s proposal to reduce the tax burden for the state’s retirees “is a positive step.”

“This proposed policy would mainly benefit the retired taxpayers,” Park told the Maryland State Wire in an email. “Currently, the state has close to $20 billion in unfunded pension liabilities for the retirees. As part of the effort to keep the state's promises to the retirees, reducing the tax burden for retirees is a positive step.”

Park said the Maryland Department of Legislative Service has indicated that the state could lose up to $1 billion revenue a year under Hogan’s proposal, but “this loss of revenue could be offset if retirees are happy with the new policy and there is a resulting reduction in collective bargaining or demands for increasing retirement benefits.”

This marks the second time Gov. Larry Hogan has proposed the program to benefit Maryland’s retirees. | File photo

As a result, Park said a “reduction in cost of providing the benefits and the state’s contributions could be significant in the long term.”

However, Park said the move to help retirees could negatively impact other taxpayers, who she said could be “burdened with higher tax rate to compensate for the loss of revenue. ... It is possible that that less burden of increasing retirement benefits could also leave room to reduce tax rates for non-retirees. In that case, all taxpayers would benefit.”

This marks the second time Hogan has proposed the program to benefit Maryland’s retirees. Park said a similar proposal was rejected by the state legislature in 2014. She said the issue remains an important one to the governor.

“Hogan is committed to keeping his promises to reduce the burden for the retirees,” Park said. “Other state workers should also be optimistic about this policy, as higher disposable income for the future retirees could mean less tax burden for all of Marylanders.”