Two bills making their way quickly through the Legislature would create a “New Markets” program to grant tax credits for investments in firms that would, in turn, invest in economically distressed communities. These bills, SB 931 and HB 2061, would cost the state nearly $300 million over a five-year period.
The State of Maryland has a similar program, but one that is much more competitive, efficient, and market oriented.
- Maryland auctions off its tax credits; the New Markets program has a fixed tax credit that costs twice as much as those sold at auction.
- Maryland then invests the proceeds in venture capital firms that bid competitively for the investments; the New Markets program is limited to nine firms doing business in Texas.
- If the investments are successful, Maryland receives a substantial share of the profits; the New Markets program delivers nothing except the promise of jobs.
SB 931 and HB 2061 cost too much and do too little.