Fran­chot talks taxes, econ­omy

Sunday Star - - FRONT PAGE - By KRIS­TIAN JAIME [email protected]­

Mary­land State Comptroller Peter Fran­chot vis­ited Queen Anne’s County on Thurs­day, Dec. 20, to tout eco­nomic growth and dis­cuss the up­com­ing tax sea­son for Mary­land res­i­dents.

CH­ESTER — Mary­land State Comptroller Peter Fran­chot vis­ited Queen Anne’s County on Thurs­day, Dec. 20, to tout eco­nomic growth and dis­cuss the up­com­ing tax sea­son for Mary­land res­i­dents.

Among his stops were Bada Bean Cof­fee House and the Bay Times in Ch­ester, An­i­mal Wel­fare League of Queen Anne’s County in Queen­stown and D’Alessio’s Wood-Fired Pizza in Stevensville. Aside from giv­ing the new busi­nesses procla­ma­tions for their con­tri­bu­tions to eco­nomic de­vel­op­ment of the of Is­land and meet­ing lo­cals, he toured the AWL shel­ter and heard staff con­cerns about the need to ex­pand.

Taxes topped much of the dis­cus­sion dur­ing his visit, in­clud­ing the re­cent over­haul of the fed­eral tax sys­tem and how Gov. Larry Ho­gan and state hope to stave off a higher tax li­a­bil­ity for the av­er­age tax­payer plus the com­ing up­date of the state’s tax pro­cess­ing sys­tem.

“The fed­eral tax cut will give al­most all Mary­lan­ders a cut in their fed­eral tax,” Fran­chot said. “Some will pay more state taxes in or­der to get the fed­eral tax cut. You have to take the stan­dard de­duc­tion, which has been in­creased at the fed­eral level from $12,000 to $24,000. When you claim the stan­dard de­duc­tion at the fed­eral level, you have to claim it at the state level,

as well.”

Fran­chot said the state level stan­dard de­duc­tion is much smaller, and by claim­ing the stan­dard de­duc­tion, tax­pay­ers forgo in­di­vid­ual de­duc­tions.

When the state tax in­crease to some is com­bined with the fed­eral tax cut, that still to­tals a smaller in­di­vid­ual tax bur­den, he said.

Fran­chot said only 6 per­cent

of Mary­land tax­pay­ers on a net ba­sis will be pay­ing more.

On Wed­nes­day, Dec. 19, the Board of Pub­lic Works ap­proved a $159.7 mil­lion con­tract to re­place and up­grade the state’s tax pro­cess­ing sys­tem with a sta­teof-the-art pro­gram that will ex­pand rev­enue-gen­er­at­ing projects, pro­vide en­hanced re­port­ing func­tion­al­ity and

make it eas­ier for tax­pay­ers to view their ac­counts.

“We’ve spent much time pre­par­ing for (tax sea­son), and now we have the com­pany who’s ac­tu­ally go­ing to im­ple­ment it. We’re go­ing to go slowly in the first three years and then plug it in the fourth year. Re­al­is­ti­cally, we’ll see im­prove­ments within two years,” Fran­chot said.

The sys­tem is de­signed to com­bine all facets of a tax re­turn in­clud­ing per­sonal and other types of fil­ing. Aside from im­proved flex­i­bil­ity and user in­ter­face, Fran­chot said, it will also pro­vide bet­ter se­cu­rity against hack­ers look­ing to in­ter­cept re­funds.

Fran­chot said the up­front cost of the sys­tem was just one of the few is­sues in pro­vid­ing a tax sys­tem “for the 21st cen­tury” that will out­last even him­self.

An es­ti­mated 90 per­cent of the state’s tax re­turns are now filed elec­tron­i­cally mak­ing the re­fund process that much more ex­pe­di­ent. An av­er­age of just 2.1 busi­ness days will pass be­fore a re­fund is de­posited elec­tron­i­cally into a tax­payer’s ac­count, Fran­chot said.

The state is en­joy­ing month 113 of eco­nomic ex­pan­sion, with the cur­rent record be­ing 119 months.

With the state see­ing a 2.6 per­cent in­crease in small busi­ness growth, Fran­chot at­trib­uted that to changes of the tax code at the fed­eral level and low un­em­ploy­ment num­bers. While he was glad the econ­omy was ex­pe­ri­enc­ing an uptick, he warned that ex­cess funds should be placed in a rainy day fund for a pos­si­ble re­ces­sion.

“For the next 12 months, it’s a boom town for small busi­nesses be­cause there’s very much money out there. We see that in the small busi­ness fig­ures but we hope they have their (books) in or­der in case of an eco­nomic down­turn,” Fran­chot said.

Mary­land cur­rently boasts nearly 600,000 small busi­nesses em­ploy­ing 1.1 mil­lion in­di­vid­u­als. Fran­chot sees the cur­rent eco­nomic trends as a sign of strong eco­nomic bones. He cred­ited the pri­vate sec­tor with sus­tain­ing that.

With Queen Anne’s County poised to have more than

50,000 res­i­dents by 2020, keep­ing it eco­nom­i­cally vi­able starts with the ex­pan­sion of broad­band across the Eastern Shore, Fran­chot said.

Fran­chot also said supporting lo­cal busi­nesses at­tracts other busi­nesses.

Dur­ing his visit, he toured lo­cal busi­nesses and com­mented on the vi­tal role they play in pro­vid­ing a healthy tax base for the county and state.

“This recog­ni­tion is great. Not many small busi­nesses get that, even though you see to buy lo­cal. I’ve been us­ing that on our so­cial me­dia just to re­it­er­ate that we have lo­cal sourced cof­fee and

honey for our menu items,” said Ju­lia Be­lair, gen­eral man­ager of the new Bada Bean Cof­fee House.

For James Cronin, owner of D’Alessio’s Wood-Fired Pizza, start­ing a busi­ness was not a brief process, but since its in­cep­tion, he said he has seen it thrive with its ap­proach us­ing only fresh in­gre­di­ents.

“This is a great honor and since we opened, we’ve tried to give as much to the com­mu­nity as much a pos­si­ble. In the last year and half, we’ve been able to do that giv­ing to ev­ery­one from churches to cleanup groups and home­less shel­ters and ever ything in be­tween,” Cronin aid.

Cronin said he started the per­mit process for his busi­ness in 2014 and it was com­pleted in 2017, but the wait was worth it.


State Comptroller Peter Fran­chot, left, speaks with Mary Engl of Queen­stown dur­ing his visit to Bada Bean Cof­fee House.

From left, State Comptroller Peter Fran­chot, Ju­lia Be­lair, gen­eral man­ager of Bada Bean Cof­fee Shop, and County Com­mis­sioner Chris Corchiarino with the of­fi­cial Cer­tifi­cate of Recog­ni­tion for the new busi­ness.


From left, State Comptroller Peter Fran­chot presents an of­fi­cial ci­ta­tion to James Cronin, owner of D’Alessio’s Wood-Fired Pizza, with his mother, Pa­tri­cia Cronin, and fa­ther, Michael Cronin, in at­ten­dance.

State Comptroller Peter Fran­chot, left, re­ceives a tour of the An­i­mal Wel­fare League in Queen­stown from Ra­mon Vill­toro, shel­ter man­ager.

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