Fiscal concerns throughout the state have CPAs on the watch for legislative consequences. Here are the issues the profession is watching in Annapolis this year.

As Maryland’s 2024 General Assembly prepares to gather in Annapolis, fiscal concerns at a number of statewide levels are putting pressure on Maryland regulators and legislators to find new sources of revenue.

That increases the odds that lawmakers might look for creative ways to generate funding during the upcoming legislative session — and that, in turn, is putting the state’s CPAs on alert.

The message for MACPA members is clear: Vigilance is key as Maryland’s legislative season arrives, and that makes the 2024 edition of CPA Day in Annapolis especially important.

Scheduled for Jan. 18 at the Governor Calvert House in Annapolis, CPA Day gives members an opportunity to meet in person with their state legislators and discuss issues that impact Maryland CPAs and those with whom they do business. The event is immeasurably impactful: Legislators enthusiastically look forward to speaking directly with their constituents about the issues, and CPAs offer lawmakers deep experience, insights and expertise in matters related to finance and fiscal strategy.

Those insights are more valuable this year than ever. The issues that may directly impact CPAs and their clients include these high-profile, revenue-related topics:

• Transportation funding: Plans to close an estimated $3.3 billion budget shortfall for Maryland’s Department of Transportation with deep cuts to all transportation-related agencies is being questioned by state and county officials throughout Maryland. Many are blaming the shortfall on sagging revenues that traditionally support transportation projects.
• State budget shortfalls: Maryland faces a $322 million budget gap for the upcoming legislative session, and that gap is projected to balloon to $2 billion by fiscal 2029. Part of the issue is the end of COVID-related federal aid that dried up as the pandemic ran its course.
• The Blueprint for Maryland’s Future: Fully funding the plan to advance public education in Maryland brings substantial spending obligations at both the state and county levels.
• University of Maryland shock trauma services: The world-renowned R Adams Cowley Shock Trauma Center at the University of Maryland Medical Center is facing some funding issues as well.

The bottom line: Funding challenges in many different areas throughout the state will have legislators looking closely for any and all opportunities to raise revenue this year. It’s easy to see why fiscal-related issues are top of mind for CPAs in Annapolis this year.

With that in mind, the MACPA’s Legislative Executive Committee has compiled a legislative agenda that, while packed with familiar issues, is taking on renewed importance this year. The key issues on the association’s 2024 agenda are:

1. Opposing sales taxes on professional services, including those provided by CPAs

Proposing a sales tax on services to raise revenue would burden the citizens and businesses of Maryland unnecessarily with additional taxes and compliance complexity. It also would negatively impact economic growth and development. CPAs believe any proposal to implement sales taxes on professional services would be bad for small business in Maryland, and the MACPA will work to defeat such legislation if introduced.

2. Opposing efforts to replace Maryland’s contributory negligence standard with a comparative fault rule

In many of the past several years’ sessions of the General Assembly, trial lawyers have introduced bills designed to replace Maryland’s current system of determining a defendant’s liability with a system that makes recovery against a defendant easier – even when the person bringing the lawsuit substantially contributed to his own injuries. At present, Maryland courts allow a person sued for negligence or wrongdoing to raise the “contributory negligence” defense — that is, the party sued may claim that the plaintiff contributed to his injury and thus should not be allowed to recover from the defendant. This long-standing rule in Maryland courts prevents a person from shifting his or her responsibility to others.

The contributory negligence standard should be maintained in Maryland because:

• it prevents a flood of suits by plaintiffs who have a disproportionate amount of fault;
• it keeps the lid on insurance premium growth rates;
• it fosters the exercise of due care by all persons; and
• it enhances the predictability of litigation, including its costs.

The increased cost of conducting business and the decreased productivity associated with the comparative negligence standard would, in the long run, lead to a loss of jobs, increased liability and a deterioration of the economic climate in Maryland. MACPA will again work to retain the contributory negligence rule.

3. Support proper budget funding for the Maryland Comptroller’s Office

During the 2023 General Assembly session, the MACPA supported the Maryland Comptroller’s Office’ request for additional funding needed to carry out its extensive agenda. The Legislature agreed, and good things have happened during the past year thanks to the additional funds, but the need for expanded funding still exists, particularly when it comes to providing expanded services and paying the salaries needed to attract stellar talent.

Among its many functions, the Comptroller’s Office is responsible for collecting tax revenue and enforcing compliance with the state’s tax laws. As the collector of much of the state’s cash, it is logical that the Office be supported with a proper budget for appropriate personnel levels as well as much needed technology upgrades.

The MACPA supports a properly funded budget that will allow the Comptroller’s Office to retain its current team as well as hire additional qualified personnel by offering competitive salary levels, and also allow for a more modern IT system for efficiency of the agency’s tax administration operations.

A comprehensive list of position papers and the bills the MACPA is following this year will be found throughout the legislative session at MACPA.org/advocacy .

Making connections and having conversations with Maryland’s legislators is a key part of the MACPA’s member promise — to promote the value of the profession and support positive legislative outcomes for our members and the public.

“If we don’t have a seat at the table,” one MACPA member said, “we could end up on the menu. Thanks, MACPA, for giving us that seat.”

But keeping CPA expertise front and center is crucial for Maryland's legislative process as well. Maryland’s lieutenant governor, Aruna Miller, said as much in 2018 while representing District 15 in the House of Delegates, says.

"Probably the most sought-after professionals in the nation are our Certified Public Accountants," Miller posted on Facebook at the time, "and Maryland has the best CPAs."