ANNAPOLIS – Recognizing the Congressional mood to give states more flexibility in welfare reform, the Maryland General Assembly made a bipartisan push this session for its own welfare- to-work programs.
Maryland’s new programs, however, go a step further than the GOP’s Personal Responsiblity Act. Like the Republican plan, they require welfare recipients to train or look for work. But they also spur the economy to produce those jobs.
The key is a package of tax incentives and subsidies to private businesses that hire welfare recipients.
“There’s nothing good about welfare reform if there’s no jobs,” said Del. Jean Cryor, a Republican freshman from Montgomery County.
Sen. Ulysses Currie, D-Prince George’s, agreed. “This is about working,” he said. “I think it’s uplifting for a person to come home and bring a paycheck. Being on welfare can be very demeaning.”
The reforms already have the support of private industry.
“A lot of our companies will take advantage of these programs, and it will benefit Maryland workers as well,” said Gene L. Burner, executive vice president of the Maryland Chamber of Commerce, which represents 1,600 businesses.
The Maryland programs are outlined in two measures passed in the General Assembly’s final hours — the “Work, Not Welfare Tax Incentive Act” and the “Welfare Reform Pilot Program and Child Support Reform.” Gov. Parris N. Glendening is expected to sign both, said his spokesman, Chuck Porcari.
In the details are:
– A pilot program with some of the strictest welfare rules in the country. Once federal approval is obtained, 3,000 recipients in Baltimore and Anne Arundel and Prince George’s counties will have to be in jobs, training or community service within three months of going on the rolls.
– Six-month wage subsidies for the pilot program’s participants, created by diverting the cash value of certain welfare benefits to an employer. The program adds the value of food stamps to the cash grants now going to some employers — a move that almost doubles the subsidy. Maryland is among only six states trying this approach, said Steve Savner, a senior staff attorney at the Center for Law and Social Policy, a liberal think tank based in Washington.
– A three-year statewide tax incentive program crediting businesses for the wages of people hired off welfare. The maximum credit would be $1,800 for the recipient’s first year on the job. It would fall to $1,200 in the second year and $600 in the third.
– Additional tax credits for child care provided or paid for by an employer. The credit would decline from maximums of $600 to $500 to $400 per employee over three years.
“This is capitalism at its best,” said Cryor, who championed the child care provision. By providing child care, businesses can create “a work force that wants to stay,” she said.
One goal was to provide enough flexibility to draw in all kinds of businesses, from the mom and pop shops to large corporations.
Sen. Martin Madden, R-Howard, noted that employers could take advantage of both programs for separate employees. The tax credits are geared towards better-trained applicants, he said, while the grant diversion seeks to get less-skilled applicants into jobs fast.
Madden summed up the two bills as “a super-incentive package.”
The reforms are easy to swallow for both sides of the welfare debate, said David Ghee, administrator for Maryland of the Targeted Jobs Tax Credit program, a federal employment program.
“They’re conservative in the sense that they give businesses a tax break and liberal in terms of giving services to the poor and helping them get jobs,” Ghee said. “Everyone benefits.”
There is a pricetag. But for state taxpayers, an initial outlay will lead to savings, officials said.
The tax credit program would cost the state $1.3 million the first year. But if all 31,725 potentially eligible individuals are hired and removed from Aid to Families with Dependent Children, the annual savings would be $71 million, according to an analysis by the Department of Fiscal Services.
“This year there is bipartisan recognition that it costs money to reform welfare, to get people in training and to work,” said Del. Samuel Rosenburg, D-Baltimore.
Business supporters said the new programs put Maryland in the forefront of welfare reform.
“This legislation affects many of the poorest Marylanders’ lives,” said Paul A. Tiburzi, a Baltimore business lawyer who represents the Coalition for Job Opportunities – about 50 businesses that backed the tax credit program.
Coalition member Jane McDermott of APG Inc., a personnel consulting firm in Columbia, agreed. “It’s important to have a job incentive component and to get private employers involved,” McDermott said. “I think it’s great that Maryland has stepped forward to be a leader in this area.” -30-