ANNAPOLIS – A bill granting tax credits to employers who provide English classes was shot down during a Senate Budget and Taxation committee hearing Thursday.
Sen. Barbara Hoffman, D-Baltimore, fired the opening salvo, asking the bill’s sponsor, Sen. Richard Colburn, R-Wicomico, if the language training expenses were not already deductible businesses expenses.
Colburn said that he did not know. Then Hoffman proceeded to read a statement from the Office of Budget and Management opposing the bill on the grounds that such training expenses are in fact allowable business deductions on both state and federal income taxes.
Colburn next asked why Delmarva Poultry Industry Inc. requested the legislation if the expenses were currently deductible.
Hoffman replied, “Because the tax credit is more valuable.”
Credits are applied to the amount of taxes owed, giving the taxpayer the full value of the amount being claimed. Deductions, on the other hand, are subtracted from income prior to computing taxes, so the taxpayer gets only a fraction of that value.
Delmarva is a trade association representing poultry industries concentrated on Maryland’s Eastern Shore.
Gerald B. Pruitt, Delmarva’s director of public affairs, said the poultry industry employs many Spanish-speaking immigrants who are hindered by their lack of English proficiency. Pruitt believes the tax credit would provide an incentive for more businesses to offer English instruction.
The bill would allow businesses providing English classes to take a state tax credit equal to 50 percent of those expenses. The total credit would be limited to $10,000 per business annually.
The measure was introduced in 1996, but was killed in committee.
“There are already government programs in place for Adult Basic Education,” Sen. Gloria Lawlah, D-Prince George’s, noted in her objection to the bill. “These programs are funded by taxpayers’ dollars, and they are accessible.”
Colburn acknowledged that “it’s probably a bad year for tax credits. The Governor is pushing a tax cut. It doesn’t stand a chance.”
The Senate Budget and Taxation Committee has not yet scheduled a vote on the bill this year. -30-