MARYLAND NARFE 2014 LEGISLATIVE PROGRAM The Maryland Federation of Chapters of the National Active and Retired Federal Employees Association represents almost 300,000 federal employees and annuitants in Maryland. While our main efforts focus on our constituents, we support legislation impacting all seniors. The over-65 population of Maryland is rapidly approaching one million. A large portion of this older population lives on fixed incomes being eroded by taxes and rising costs: unrealistic assessments and resultant ever increasing real estate taxes; a tax exemption benefit available only to dependent seniors but not senior tax filers; increasing health and long term care needs of a growing aging population especially cost of long term care for cognitive disease victims; and the inequitable treatment of public service retirees who cannot claim the same subtraction from income as military retirees. If we want to keep our senior population from emigrating to other, less expensive states, our legislature needs to focus on the needs of seniors on fixed incomes. Our proposed legislative initiatives are major steps in that direction. Some of these proposals include short-term decreases in state revenue; however, the overall long term result will be beneficial to both Maryland seniors and to the economy and the social fabric of our state. SPECIFIC INITIATIVES HELP SENIORS AGE IN PLACE BY REDUCING THE PROPERTY TAX BURDEN
ISSUE: Most retirees live on fixed incomes. At the same time, inflation and the rebound of the housing market have driven up home values and resultant property taxes. The RESULT – higher property taxes.
revision of the tax code in the late 90’s intended for all seniors, has only been allowed for dependents. Thus, filers aged 65 or older, have maximum exemptions of $4,200 each while an age 65 or older dependent’s exemption is $6,400.
IMPACT: These factors make it increasingly difficult for many seniors to maintain their standard of living. One solution – emigration from Maryland to a state perceived as more seniorfriendly – results in significant economic, civic and social losses to Maryland.
IMPACT: The intent of the original legislation was to provide the additional $3,200 exemption for ALL seniors. The current $2,200 gap in the amount of the exemption costs each senior taxpayer approximately $175 more in state and local income taxes annually than was intended.
LEGISLATIVE SOLUTIONS:
LEGISLATIVE SOLUTION: Increase the current $4,200 senior exemption in phases beginning in 2015 to achieve parity for all seniors. This change would be subject to the same means testing as applies to standard exemptions.
1. The Homeowners Tax Credit (HTC) Program is limited to low and moderate income homeowners. Change the HTC formula to increase the tax credit for eligible homeowners with lower incomes (under $30,000), adjust credit schedules for inflation, and increase assessment limits from $300,000 to $450,000. 2. Require annual rather than triennial reassessment of residential properties in a county when median home sale prices fall by more than 10 percent from the previous year. 3. Reduce the 10% state-wide cap on the increase rate for Homestead Tax Credits to 5%. EQUALIZE TAX EXEMPTION MARYLAND SENIORS
FOR
ISSUE: The current Maryland income tax exemption for filers is $3,200. Those filers over 65 are allowed an additional $1,000 exemption and another $1,000 if blind, amounts which have remained the same for over 20 years. An additional $3,200 exemption, included in a
PROMOTE LONG TERM CARE INSURANCE TO REDUCE THE STATE MEDICAID BURDEN ISSUE: Maryland’s MEDICAID costs are well above the national average. At the same time, the need for long term care (LTC) is increasing. A large proportion of MEDICAID funds pay for treatment and cognitive care for an aging population financially unprepared for retirement, mistakenly believing that MEDICARE will pay for long term care, and unaware that half their number will require institutional or specialized home care by their 80th year. IMPACT: Faulty cost estimates for LTC by insurance companies and the impact of “The Great Recession” on investments to cover LTC policies have reduced the number of vendors and led to
higher premiums for new purchases and significantly increased premiums for current policy holders causing some to drop their coverage.
and increase the amount of the subtraction to $10,000 for both military and public service retirees age 65 or older in phases beginning in 2015.
LEGISLATIVE SOLUTION: Encourage purchase and retention of Long Term Care insurance by the younger (age 50 – 60) population when premiums are relatively lower, by annualizing the one-time $500 tax credit in two $250 phases for tax years 2015 and 2016, then $500 for 2017 annually thereafter for new or returning purchasers; work with the major insurance companies to educate seniors as well as the younger population. The more attractive $500 annual tax credit should encourage sales and retention and each sale will help reduce the state MEDICAID burden.
OTHER AREAS OF SUPPORT
EQUALIZE TAX SUBTRACTION FROM INCOME FOR PUBLIC SERVICE RETIREES AND MILITARY RETIREES ISSUE: The inequitable treatment of public service retirees who cannot claim the same subtraction from income as military retirees under tax law. IMPACT: Because many states recognize the overall benefits local retirees contribute to the economy and social fabric of their communities they encourage migration of retirees from other states, offering tax incentives ranging from total exemption from state and local income tax to highly reduced taxes. LEGISLATIVE SOLUTION: Equalize the $5,000 subtraction from income for public retirees
We will continue to work on behalf of bills to: Reform Corporate Tax Policies Broaden the False Claims Act Promote open government Initiate public funding of candidates for the General Assembly Maryland Federation of Chapters MD PAC The non-partisan MD PAC provides financial assistance to candidates for and members of the Maryland General Assembly who are committed to uphold and actively support the Maryland Federation’s legislative goals. Contributions are received from individual members of NARFE (no chapter monies are accepted) as well as, any other individual or organization that supports our goals. For further information contact Ed Bice, Chair, at de3637@verizon.net or Dave Roseman, Treasurer, at dave.roseman@comcast.net . Contact the State Legislation Committee Edward W. Bice, Chair de3637@verizon.net 301-464-3748
Marcia Swanson, Vice Chair mkswan9013@aol.com 301-434-7266
Maryland Federation Of Chapters National Active and Retired Federal Employees Association
2014 MARYLAND LEGISLATIVE PROGRAM