The Montgomery
County Council on Oct. 29 unanimously enacted Expedited Bill 8-13. The bill increases
the County’s Working Families Income Supplement for low-income households to 90
percent of the Maryland refundable credit beginning in Fiscal Year 2015, 95 percent in
FY16 and 100 percent in FY17 and beyond.
The
chief sponsor of Expedited Bill 8-13 is Councilmember Hans Riemer.
Councilmembers Roger Berliner, Marc Elrich and George Leventhal were co-sponsors.
The Government Operations and Fiscal Policy Committee, which is chaired by
Nancy Navarro and includes Councilmembers Riemer and Valerie Ervin, at a
worksession on Oct. 21 voted 3-0 to recommend that the full Council pass the
bill with several modifications.
The bill permits
the Council to approve a lower amount in the annual operating budget by a vote
of at least five Councilmembers. The minimum funding levels in the bill for the
WFIS will not apply in any year that the State increases its refundable earned
income credit above the current level.
“Montgomery County is often thought of as
one of the wealthiest counties in America. But while we do have many prosperous
communities, we also have a very high cost of living,” said Councilmember Riemer.
“Experts estimate that a household with two adults
and one preschooler needs $89,784 to get by. Many thousands of residents
struggle to earn this much, and poverty is growing faster in our County than anywhere
else in the region. As the County slowly recovers from recession, it's only
fair to working families that we help them recover too. I am gratified that we
continue to look out for our most vulnerable residents.”
Started in
1975, the EITC allows households earning income to apply tax credits to their
returns. The County Working Families Income Supplement (WFIS) is derived from
the federal earned income tax credit (EITC). The EITC is a refundable tax
credit for lower income working families and individuals. Recipients of the
WFIS include some of the lowest-paid residents of the County. To qualify for
the EITC in Tax Year 2013, a taxpayer must earn less than:
·
$46,227 ($51,567 married filing jointly) with
three or more qualifying children
·
$43,038
($48,378 married filing jointly) with two qualifying children
·
$37,870
($43,210 married filing jointly) with one qualifying child
·
$14,340
($19,680 married filing jointly) with no qualifying children
The Tax Year 2013 maximum credit is:
·
$6,044 with three or more qualifying children
·
$5,372 with two qualifying children
·
$3,250 with one qualifying child
·
$487 with no qualifying children
In FY11, the
County had 33,840 WFIS recipients who received an average amount of $381.81
each. Restoring the County match to 100
percent would provide an additional $124, for a total of $505.81. For a worker on the edge, this could mean
making a car payment, paying an overdue utility bill, or paying rent. The program encourages people to work because
a recipient must have earned income to be eligible for a refund.
Twenty-two states (including Maryland), the District of
Columbia, New York City and Montgomery County offer their residents a WFIS
based upon the EITC. Maryland permits residents to claim a credit of one-half
of the federal EITC and provides a refund for up to 25 percent of the federal
EITC. In 2000, the County began matching 100 percent of the Maryland refundable
credit to help working County residents meet the high costs of living in
Montgomery County. In May 2010, the Council enacted Expedited Bill 33-10, which
permitted the Council to set the WFIS at less than 100 percent of the Maryland
refundable credit by resolution each year.
Accordingly,
the Council set the WFIS at 72.5 percent for FY11, 68.9 percent for FY12 and 75.5
percent for FY13.
On
May 23, 2013, the Council appropriated funds to increase the WFIS to 85 percent
of the Maryland refundable credit during FY14.
