Could a Maryland county in 1992 pass its local piggyback income tax rate increase before June 1 and still have the increase take effect on June 1?

Plain-English summary

Prince George's County's attorney asked the Attorney General whether Chapter 2 of the Laws of Maryland 1992 (First Special Session), which let counties and Baltimore City raise their local "piggyback" income tax rate above 50% (up to a new 60% ceiling), required a county to wait until June 1, 1992 to actually pass the rate increase, since the law's substantive authorization took effect June 1 and required the county to notify the Comptroller of any rate change by that date.

The Attorney General concluded Chapter 2 did not require the county to act on June 1 itself. A legislative body may pass "anticipatory" or contingent legislation that only becomes effective once a later condition, here, the arrival of new state-conferred taxing authority on June 1, is satisfied, and nothing in Chapter 2's language or purpose stripped counties of that ordinary legislative power. The opinion noted the statute's own language supported this reading: it barred a rate change from taking effect unless the Comptroller was notified "on or before" June 1, phrasing that assumed a county could act ahead of that date. The opinion also pointed to the law's underlying purpose, letting counties respond quickly to state aid cuts and their own fiscal shortfalls, as a reason the legislature would not have wanted to force counties to wait until the last possible day to finalize a tax change affecting the entire 1992 calendar year regardless of the exact enactment date.

Currency note

This opinion was issued in 1992. Subsequent statutory amendments, court decisions, or later AG opinions may have changed the analysis. Treat this page as historical context, not current legal advice. Verify current law before relying on any specific rule, deadline, or remedy mentioned here.

Common questions

Could a Maryland county in 1992 pass a piggyback tax rate increase before June 1 and still have it take effect on June 1? Yes, according to the opinion. The Attorney General concluded that Chapter 2 permitted a county to enact or adopt a resolution or ordinance increasing the piggyback tax rate above 50% before June 1, 1992, as long as the increase itself was made effective on June 1.

Did the county have to wait until June 1 itself to notify the Comptroller about the new tax rate? No. The opinion read the statute's requirement that the Comptroller be notified of a rate change "on or before" June 1 as indicating the rate change, and the notification, could be accomplished before that date.

Why did the 1992 piggyback tax law have a June 1 effective date and notification deadline in the first place? The opinion explained the piggyback tax increase was part of a package responding to a state fiscal crisis and cuts in state aid to local governments, and that requiring notice by June 1 let the Comptroller issue updated employer withholding tables in time, while the June 1 effective date reflected uncertainty over whether the piggyback authorization itself qualified as an appropriation exempt from that date requirement.

Background and statutory framework

Chapter 2 (Senate Bill 2) of the Laws of Maryland 1992 (First Special Session) was part of a package of enactments addressing a state fiscal crisis involving multi-million dollar budget shortfalls, alongside Chapter 62 (House Bill 458) and Chapter 1 (Senate Bill 1), which cut state aid to local governments. To help counties and Baltimore City offset those cuts, Chapter 2 amended §10-106 of the Tax-General Article to raise the maximum local piggyback income tax rate to 60%, and added uncodified Section 5, which authorized a county or Baltimore City to increase its income tax rate for calendar year 1992 by ordinance or resolution, provided the county notified the Comptroller of the rate change on or before June 1, 1992, so the Comptroller could issue new employer withholding tables effective July 1, 1992. The Senate Budget and Taxation Committee added new TG §10-106(a)(3), requiring a public hearing and two weeks of newspaper notice before a county could raise its rate above 50%, and Section 11 of the Act specified that Section 5 took effect June 1, 1992, while allowing the hearing, publication, and summary requirements to be satisfied by actions taken before that date.

The opinion reasoned that Maryland law recognizes no bar to a legislative body enacting contingent or "anticipatory" legislation whose effectiveness depends on a later, fixed condition outside the body's control, here, the state-conferred taxing authority arriving on June 1, citing precedent for the General Assembly and the Governor exercising similar anticipatory lawmaking power. County legislative bodies have the same inherent power, and the opinion found nothing in Chapter 2's text or purpose that limited counties to acting only on June 1 itself. The statute's own reference to notifying the Comptroller "on or before" June 1 supported a reading that a rate change could be accomplished ahead of that date, and the underlying purpose, letting counties respond quickly to fiscal pressure, counseled against reading the law to force counties to wait until the last possible day.

Citations and references

Statutes:

• Chapter 2 (Senate Bill 2) of the Laws of Maryland 1992 (First Special Session), the piggyback tax rate increase authorization
• Chapter 62 (House Bill 458) of the Laws of Maryland 1992 (Regular Session) and Chapter 1 (Senate Bill 1) of the Laws of Maryland 1992 (First Special Session), related state aid reduction measures
• Article XVI, §2 of the Maryland Constitution, appropriations for maintaining state government
• TG §10-106(a)(1), (a)(3), (b)(1), (b)(2), (c), (d), the piggyback tax rate provisions of the Tax-General Article
• Section 5 and Section 11 of Chapter 2, the uncodified effective-date and notification provisions

Cases:

• Kelly v. Marylanders for Sports Sanity, Inc., 310 Md. 437, 530 A.2d 245 (1987), Maryland Court of Appeals
• Baltimore v. Clunet, 23 Md. 449, 469-70 (1865), Maryland Court of Appeals
• Ogrinz v. James, 309 Md. 381, 390-92, 524 A.2d 77 (1987), Maryland Court of Appeals

Source

• Landing page: https://oag.maryland.gov/resources-info/Pages/attorney-general%E2%80%99s-opinions.aspx
• Original PDF: https://oag.maryland.gov/resources-info/Documents/pdfs/Opinions/1992/Volume77_1992.pdf (this opinion appears at printed page 32 of the bound annual volume; Maryland's site does not publish a standalone PDF of this opinion)

Original opinion text

Best-effort transcription from a scanned PDF. Minor errors may remain — the linked PDF is authoritative.

COUNTIES

Taxation - Income Tax - timing of Action to Increase "Piggyback" Tax Rate

May 8, 1992

Michael P. Whalen, Esquire
County Attorney for
Prince George's County

You have requested our opinion whether Chapter 2 of the Laws of Maryland 1992 (First Special Session) prevents a county from increasing the local income or "piggyback" tax in excess of 50% by a resolution or ordinance enacted or adopted before, but effective on June 1, 1992.

For the reasons stated below, we conclude that the language of Chapter 2, construed in light of its purpose, does not forbid a county's enactment or adoption before June 1 of a measure increasing the piggyback tax effective June 1, 1992.

I

Background

Chapter 2 (Senate Bill 2) was one of a series of enactments designed to deal with a State fiscal crisis resulting from projected multi-million dollar budget shortfalls for Fiscal Years 1992 and 1993. See Department of Fiscal Services, Legislative Fiscal Program (April 10, 1992). Two of these measures mandated massive cuts in State aid to local governments in both fiscal years. See Chapter 62 (House Bill 458) of the Laws of Maryland 1992 (Regular Session) and Chapter 1 (Senate Bill 1) of the Laws of Maryland 1992 (First Special Session).

To compensate for these local aid reductions, Chapter 2, among other things, authorized the counties and Baltimore City to raise their local piggyback tax rate up to 60%. This authorization was accomplished by an amendment to §10-106 of the Tax-General Article ("TG" Article) and the inclusion of uncodified Section 5 in Chapter 2. The latter section provides in pertinent part as follows:

[N]otwithstanding §10-106(b)(2) of the Tax-General Article, but subject to §10-106(a)(3), (b)(1), (c), and (d) of the Tax-General Article, for personal income taxes payable for calendar year 1992, a county or Baltimore City may increase by ordinance or resolution its county income tax to not more than 60% of the State income tax for an individual. An increase in a county income tax rate under this section may not take effect unless the county notifies the Comptroller of the rate change on or before June 1, 1992. The Comptroller shall issue new employer withholding tables, to be effective as of July 1, 1992, reflecting the new tax rates under this Act including any new county income tax rates.

(Emphasis added.) TG §10-106(a)(1) was amended to increase the maximum piggyback rate to 60%, and TG §10-106(c) was added to specify the multiples that a county might employ. In addition, the Senate Budget and Taxation Committee added the following language to the bill as new §10-106(a)(3):

(i) A county may not increase its county income tax rate above 50% until after the county has held a public hearing on the proposed act, ordinance, or resolution to increase the rate.

(ii) The county shall publish at least once each week for 2 successive weeks in a newspaper of general circulation in the county:

1. Notice of the public hearing; and

2. A fair summary of the proposed act, ordinance, or resolution to increase the county income tax rate above 50%.

Finally, the Committee proposed, and the General Assembly adopted, an amendment to Section 11 of Chapter 2, which as enacted provides as follows:

Section 5 of this Act shall take effect June 1, 1992, and provided further that for calendar year 1992 the publication, hearing, and summary requirements of §10-106(a)(3) of the Tax-General Article may be satisfied by a county by actions taken prior to June 1, 1992.

(Emphasis added.) The effective date of June 1, coupled with the requirement that the Comptroller be notified of a rate change not later than June 1, has given rise to concern that a county may enact a rate change on June 1 only.

II

Analysis

There is no absolute legal or constitutional bar to the enactment of "anticipatory" legislation, the effectiveness of which is contingent upon subsequent authorization. See Baltimore v. Clunet, 23 Md. 449, 469-70 (1865); 2 Sutherland Statutory Construction §33.07, at 17 (4th ed. 1986); 61 Opinions of the Attorney General 234, 236 (1976). For example, the General Assembly may enact a law contingent upon the passage of a constitutional amendment granting the General Assembly the power to enact the legislation. See 61 Opinions of the Attorney General at 236. Similarly, it is within the Governor's budget "lawmaking" power, see 76 Opinions of the Attorney General 330 (1991), to submit a budget, balanced by revenues derived from sources not yet in existence, such as those dependent upon additional legislation. See 61 Opinions of the Attorney General 50, 56 (1976). It is also valid for the Legislature to trigger the operation of legislation on a factual finding that preceded the effective date of the law. See Ogrinz v. James, 309 Md. 381, 390-92, 524 A.2d 77 (1987).

No express sanction is necessary for a legislative body to enact such contingent or anticipatory legislation, particularly where, as here, the contingency is fixed, definite, and outside the county's control, namely, the arrival on June 1 of new State-conferred taxing authority. Rather, the power to do so is inherent in the power to enact laws. Sutherland Statutory Construction §33.07, at 16.

County legislative bodies unquestionably have this same power to enact contingent or anticipatory legislation. Cf. 5 McQuillan Municipal Corporations §5A, at 168 (3d ed. 1989) (municipal ordinances). And, in our view, nothing in either the language or purpose of Chapter 2 divests the counties of this power. To be sure, the counties are expressly authorized by Section 11 of the Act to satisfy certain hearing, publication, and summary requirements prior to June 1. However, this express reference was not intended to otherwise limit the counties from enacting a tax increase before June 1 with a June 1 effective date. In fact, Section 5 of the legislation specifically states that the change in the tax rate may not take effect unless the Comptroller is notified of "the rate change" on or "before" June 1, 1992. This language indicates that a rate change might be accomplished before June 1, 1992.

Moreover, the purpose of the piggyback tax authorization was to allow counties to deal effectively and speedily with their own fiscal problems as well as those resulting from the scheduled reductions in State aid to local jurisdictions. In light of this purpose, the General Assembly would not likely have intended to tie the hands of the subdivisions by requiring the tax rate change to be finalized only on June 1.

III

Conclusion

In summary, it is our opinion that under Chapter 2 a county may increase the local piggyback tax in excess of 50% by a resolution or ordinance enacted or adopted before but effective on June 1, 1992.

J. Joseph Curran, Jr.
Attorney General

Robert A. Zarnoch
Assistant Attorney General

Jack Schwartz
Chief Counsel
Opinions and Advice

1
Because these and some other components of the budget financing package were clearly "appropriation[s] for maintaining the State Government," within the meaning of Article XVI, §2 of the Maryland Constitution, they permissibly had an effective date prior to June 1. See generally Kelly v. Marylanders for Sports Sanity, Inc., 310 Md. 437, 530 A.2d 245 (1987).

2
We have advised that the phrase "by ordinance or resolution" authorizes charter counties to increase their tax rates by either method. Letter to Senator Thomas M. Yeager from Attorney General J. Joseph Curran, Jr. (May 1, 1992).

3
One possible reason for inclusion of such a provision in Chapter 2 was concern expressed by both the Maryland Association of Counties and the Attorney General's Office that counties with fast-approaching budget deadlines be accorded some flexibility to deal with the consequences of the General Assembly's budget and tax package. In addition, one reason why Chapter 2, unlike other components of the package, had a June 1, 1992 effective date was some uncertainty over whether the piggyback tax authorization was an appropriation for the maintaining of State government exempt from a June 1 effective date. See note 1 above.

4
It is also noteworthy that a tax rate change authorized by Chapter 2 applies to the entire 1992 calendar year. Thus, whatever the enactment date, the effect on taxpayers is the same.