Democratic lawmakers in the General Assembly are eyeing reforms of business tax credits in light of a recent audit that found the Maryland Department of Commerce lacked in its oversight of economic incentives.
A joint committee of senators and delegates will conduct a hearing next month on the audit’s findings, but that isn’t stopping some Democrats from talking about a need for changes. The audit, as reported by the Business Journal last week, determined the Department of Commerce failed to make sure businesses receiving incentives complied with state regulations and job growth requirements. Specifically, the audit identified issues with the One Maryland Tax Credit and the Biotechnology Investment Tax Credit.
State Del. David Moon, a Democrat from Montgomery County who serves on the Joint Audit and Evaluation Committee, called the audit a “wake-up call” and said the General Assembly needs to play a greater role in oversight in how tax credits are issued and administered.
“The programs do not do what they say they are doing,” Moon said. “They basically amount to handouts to companies with very little oversight.”
In one case, auditors said the state issued a $5.5 million tax credit for ineligible project costs. The Department of Commerce argued against the finding in the specific case, saying the current law does not reflect current business practices. The agency has said it is working to implement the recommendations of the auditors.