Category Archives: Budget

The Minority Report: Session 2013

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The following is a summary report of the major issues of the 2013 Legislative Session.

BUDGET & FISCAL ISSUES

Operating Budget. Despite claims that he has reduced state spending by almost $8 billion since taking office, Governor O’Malley’s FY2014 budget continued the trend of increasing the state’s overall spending by more than $1 billion each year, a 25% increase since 2007.

Maryland%27s Total SpendingTouted as “fiscally prudent and socially responsible,” the FY2014 budget is anything but. As 26% of Maryland’s budget is supported by the Federal Government, our citizens will be affected by the federal sequester more than most. With the full effects of federal sequestration still an unknown, Governor O’Malley continues to irresponsibly increase spending. State spending continues to outpace personal income growth as Maryland’s government keeps getting bigger while taxpayers struggle to keep up with new taxes and fees. O’Malley’s budget increased spending by over $1 billion dollars in FY 2014 – a 3% increase from last year.

House Republicans urged the Governor to exercise caution during these uncertain fiscal times and reduce his budget proposal by 2%, which equaled the same paycheck reduction all Marylanders saw when the federal payroll tax holiday expired in January. This proposal was rejected by the Administration and House Democrats, who are content to continue their spend-and-tax cycle.

Click here to view the House Republican Caucus press conference on the budget.

Pensions. The House Republican Caucus championed pension reform in the 2013 Session. Chronic mismanagement and underfunding of the state’s pension fund has left state employees and the state’s fiscal health in jeopardy. The Republican legislative package would have required full-funding of the state’s pension obligation and a more realistic estimation of return on fund investments as well as a stringent limitation on risky pension investments. Additional Republican proposals included the creation of a 401(k)-type retirement option for all state employees and would have added two more county representatives to the State Pension Board.

While the Republican initiatives were rejected, the General Assembly did pass alternative legislation to phase in the full-funding of the State Pension Fund, albeit at a slower rate than the Republican suggestion.

Click here to read a Baltimore Sun article about the GOP Pension Reform Proposal.

Debt Grows, Debt Payments Grow, But Funding Source FlatCapital Budget. This year, Governor O’Malley’s Capital Budget authorized $1.11 BILLION in new state debt. While the Capital Budget includes many worthy items such as school construction, the constantly increasing debt of the O’Malley-Brown Administration is not sustainable long-term. Maryland’s debt payments are funded primarily by the state’s property tax revenue. Due to the decline in home values over the last several years this revenue source has fallen short of covering our debt payments. With the debt that has already been undertaken and the additional debt that is authorized this year, the gap between what is owed and what is covered by the property tax widens significantly, making an increase in the property tax rate a very real possibility. The bottom line is that over the last seven years the O’Malley-Brown Administration has been content to max out the state’s credit card and stick present and future generations of Marylanders with the bill.

ELECTIONS

ballot boxHB 224: Election Law – Improving Access to Voting.  Governor O’Malley’s Improving Access to Voting legislation relaxes the requirements needed to register to vote by allowing same day registration, expanding early voting and allowing online access to absentee ballots. House Republicans opposed this bill on the grounds that it creates more opportunities for voter fraud and compromises the integrity of the election process.

HB 244 passed the House 92-43 and the Senate 36-11.

HB 493: Referendum Integrity Act.  While not passed, HB 493 would have placed additional burdens on the petition process and dissuaded citizens from signing onto a referendum.  If passed, HB 493 would have required petition sponsors to create a campaign finance committee for each law being petitioned, required signers to include their birthdate with their signature, required each signature page to contain language that signer information is subject to public disclosure, required petition circulators to take a training course and prohibited payment per approved signature.

This legislation was Democratic retaliation following three successful petitions that resulted in ballot initiatives in 2012: repeals of the DREAM Act, same-sex marriage and the newest legislative redistricting plan. While the legislation didn’t move forward this year, it will be something to keep an eye on in the future.

GAS TAX – TRANSPORTATION

HB 1515: Transportation Infrastructure and Investment Act of 2013

No Gas Tax HikeGas Tax. At the 11th hour, Governor O’Malley introduced the complicated and convoluted Transportation Infrastructure and Investment Act of 2013 sneaking it in just minutes before the deadline to introduce legislation in the session. This $2 billion revenue bill puts a disproportionate burden on motorists by:

  • Indexing the existing excise tax on gas using the Consumer Price Index. This means that the excise tax is indexed to inflation and will put gas tax increases on auto-pilot. The gas tax will continue to go up year after year with no legislative oversight.
  • Creating a new 1% sales tax on the retail price of gas effective July 1, 2013 that will increase to 2% on January 1, 2015, and to 3% on July 1, 2015. These amounts assume that the federal government will authorize online sales tax collection, but if that does not happen,
    the sales tax on gas will increase by 4% on January 1, 2016 and to 5% on July 1, 2016.

As a result, even with a conservative estimate of inflation, the total gas tax will increase by 88% by FY2017 and Marylanders could be paying 44.1 cents per gallon in Maryland gas taxes alone. To add insult to injury to motorists, the majority of the money raised through these new taxes will not even be used to build and repair roads and bridges, but instead will be directed to seldom-used mass transit. While just 8% of Marylanders use mass transit to commute, mass transit receives more than four times the funding for highways. Motorists are being asked to foot the bill for a service many of them don’t and will never be able to use.

The Fake Transportation Trust Fund Lock Box
The Transportation Trust Fund (TTF) has been Governor O’Malley’s overdraft protection as he continues to spend beyond the State’s means. The TTF has repeatedly been raided to balance the state’s budget and $1 billion of local highway user funds have yet to be paid back.

SB 829: Transportation Trust Fund – Financing – Use of Funds
In order to provide themselves with political cover after passing the gas tax, Democrats, following the lead of Senate President Mike Miller passed SB 829 – a fake lockbox on the Transportation Trust Fund – during the last hour of the 2013 legislative session. Instead of actually protecting the TTF from future raids, SB 829 codifies this reckless spending behavior and encapsulates it into the State Constitution. The bottom line is that SB 829 does absolutely nothing to ensure that TTF dollars are actually spent on transportation.

SB 829 passed the House 106-32 and Senate 45-2.

House Republicans strongly opposed the gas tax and advocated for the protection, alignment and restoration of the Transportation Trust Fund. They supported legislation that would create a true lockbox on the Transportation Trust Fund, bring TTF spending into alignment with the needs of Marylanders by directing more funding towards highways, and restoring nearly $1 billion in highway user funds back to the TTF. Unfortunately for Maryland’s motorists, the Republican proposals were rejected by House Democrats. While they were willing to grab more than $2 billion out of Marylander’s wallets, they were very unwilling to pass legislation to guarantee that the money raised through these new taxes would actually fund transportation infrastructure.

HB 1515 passed the House 76-63 and Senate 27-20.

Click here to view the House Republican Caucus press conference on the gas tax.

Click here to read one of many articles chronicling Senate President Mike Miller’s infamous “neanderthal” comments regarding the House Republican Transportation plan.

 LABOR ISSUES

 Mandatory Union Fees for State Public School and Higher Education Employees – HB 667 & SB 841

Governor O’Malley and his fellow Democrats continued to cave to union pressures with the passage of HB 667 and SB 863. These bills create a “fee to work” by requiring that all state public school and higher education employees pay a fee to a union regardless of whether they are a member of the organization, support its political or ideological views, or wish the organization to negotiate or advocate on their behalf. Essentially this bill takes hundreds of dollars a year out of employee paychecks and makes a deposit to the union’s banking account without the employees’ consent.

HB 667, Public School Employees – Collective Bargaining – Representation Fees, passed the House 95-43 and the Senate 31-13.

SB 841, the Higher Education Fair Share Act, passed the House 94-45
and the Senate 34-12.

NATURAL RESOURCES & ENERGY

wind turbinesHB 226: Maryland Offshore Wind Energy Act of 2013. Governor O’Malley was finally able to pass his Offshore Wind bill after working with Senate President Miller to rearrange the make-up of Senate Finance Committee to remove detractors. House Republicans opposed the bill on financial grounds. When the 200 megawatt wind project comes on line in 2018, ratepayers will bear the $112 million annual net cost of the project, which is more than twice the cost than projected conventional energy costs. Offshore wind is also a bad investment for Maryland ratepayers as is it projected to lose more than $1.4 billion over the 20-year life of the project. The increased costs to ratepayers will disproportionately affect the state’s most vulnerable low-income earners that cannot afford the latest residential upgrades or energy-saving appliances who already pay higher than average utility bills. Despite their pontificating about creating jobs in Maryland, House Democrats rejected an amendment requiring a substation be built in Maryland, thus creating sustainable jobs in the state. Democrats also rejected other amendments to cap the costs to ratepayers and ensure that companies working on the project were US-based and also used US-made materials. The bill passed the House 88-48 and the Senate 30-15.

PUBLIC SAFETY

 SB 276: Death Penalty Repeal. SB 276 repealed the Death Penalty in Maryland and made the maximum penalty issued by the state life without parole. Most members of the House Republican Caucus opposed this legislation and offered multiple amendments to the bill that were ultimately rejected. House Democrats opposed retaining the death penalty as a sentencing option in cases of mass murder, terrorism, school shootings, contract killing, murder of law enforcement and first responders, and correctional officers. House Democrats effectively removed an important tool for prosecutors and have also endangered the safety of correctional officers working in the state prisons, as there is now no deterrent to keep the most vicious criminals from committing acts of violence against them. House Democrats also rejected an amendment that would have removed prison “perks” from those serving life from parole such as TV, internet access, recreation time, and family visits.

The Death Penalty Repeal passed the House 82-57 and the Senate 27-20.

SB 715: Maryland Highway Safety Act of 2013. Deceptively named the Maryland Highway Safety Act of 2013, SB 715 authorizes the Maryland Motor Vehicle Administration (MVA) to issue drivers licenses and identification cards to illegal immigrants. These “second tier” licenses could not be used for federal purposes such as purchasing a firearm, boarding a flight, or entering a federal building.

House Republicans opposed SB 715 with concerns that the requirements to obtain a drivers license were not stringent enough and with no way to reliably verify an applicant’s identity, multiple licenses could be issued to the same person. With Maryland being the only state on the East Coast to issue licenses to illegal immigrants, our state becomes a gateway for potential terrorists and others seeking to obtain ID for questionable purposes. Additionally, the two-tiered ID system, downgrades all Maryland-issued drivers licenses and IDs and makes Maryland non-compliant with the Federal REAL ID Act. Once this measure goes into effect, no Maryland-issued ID may be used for federal purposes, including boarding a plane or entering a federal building.

House Republican amendments to require fingerprinting of illegal immigrants who were issued an ID, and to make the second-tier ID a different color, among others were rejected. SB 715 passed the House 82-55 and Senate 29-18.

SECOND AMENDMENT

 SB 281: Firearm Safety Act of 2013. The House Republican Caucus vehemently opposed SB 281 on the grounds that it severely limits the Second Amendment rights of Marylanders and effectively punishes Marylanders that legally exercise their right to own a firearm. Billed as a way to make our families and streets safer following the tragedy in Newtown, CT, SB281 does nothing to curb gun-related crime.

wethepeopleA majority of Democrats opposed amendments that would have eliminated “time off for good behavior” and other perks for those convicted of crimes with a firearm. They also opposed amendments eliminating the fingerprinting requirement, creating a special license for competitive shooters, creating a public campaign to end the stigma of mental illness, expanding conceal-carry permits, as well as many others.

While the bill limits firearm access for the mentally ill, the O’Malley Administration left many critical mental health and early intervention programs grossly underfunded so those most at-risk are not able to receive the services and support they desperately need.

Unfortunately for Maryland, Governor O’Malley decided to pave his way to the 2016 Presidential Campaign by trampling on the rights of law-abiding citizens and exploiting recent tragedies for political gain.

After almost 24 hours of hearings and debate and thousands of Second-Amendment supporters traveling to Annapolis to make their voices heard, SB 281 passed the House 78-61 and the Senate 28-19.

SB 281 makes sweeping changes to Maryland’s gun laws and goes into effect on October 1, 2013. The bill is not retroactive, meaning that it only applies to firearm purchases made on or after October 1st. The major highlights are as follows:

Assault Weapon Ban. SB 281 designates 45 rifles as “Assault Long Guns” including the AR-15, SKS, as well as any of their “copycats” and bans the sale of these firearms effective October 1st, 2013. This bill is NOT retroactive. If you currently own one of these firearms, or purchase prior to October 1st, 2013 you can continue to possess your firearm. In addition, these firearms can continue to be passed on through inheritance provided the heir is not otherwise disqualified from possessing a Regulated Firearm.

Magazine Capacity/Ammunition.  Effective October 1, 2013 magazine size for all firearms is restricted to 10 rounds or less. The purchase, transfer, or sale of higher capacity magazines is prohibited. This bill is NOT retroactive. If you currently possess a large capacity magazine, you may continue to do so.

SB 281 bans a person from possessing any ammunition if they are disqualified from possessing a regulated firearm (by virtue of a criminal conviction, drug or alcohol abuse, is a fugitive from justice, or suffers from a mental disorder)

Handgun Qualification License: Fees, Training and Fingerprinting. Anyone who wishes to purchase a handgun after October 1, 2013, must apply to the Maryland State Police for a handgun qualification license. Applicants are required to complete 4 hours of training and submit fingerprints and complete a criminal background check. The cost of the initial licensing, fingerprinting, and background check is paid by the applicant and is estimated to be over $100. Once issued, the license is good for ten years. The license can be renewed for a $20 fee and additional training is not required for renewal. If you currently own a regulated firearm you do not have to ever complete the training to apply for the handgun purchase license.

Mental Health Provisions. SB 281 restricts a person who has ever been a subject of an Involuntarily Commitment or those who are currently under a protective order from possessing any firearm and requires them to surrender any firearms to law enforcement for safe keeping. A hearing review process is available for individuals to petition to regain their rights to possess a firearm.

Active and retired law enforcement officers and military personnel over age 21 as well as firearm manufacturing facilities are generally exempted from the provisions and restrictions of this act.

For a PDF version of this report, please click here.

House Republicans Present Alternative Budget Proposal

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Today, Republican members of the House Appropriations Committee presented an alternative budget plan calling for zero growth in the upcoming fiscal year, which equates to a 2% across the board cut to Governor O’Malley’s budget proposal.  Republican committee members urged Governor O’Malley to tread cautiously given the current financial insecurity brought on by the federal sequester and still recovering local economy.

Sequestration Impact“Earlier this year, Maryland taxpayers saw their paycheck reduced by 2% as a result of decisions by the federal government,” said Delegate Tony McConkey. “It is not unreasonable for Maryland’s government to take the same reductions as its taxpayers. In light of the pending impacts of sequestration, we must be cautious with our budgeting. Now is not the time to increase spending.”

Delegate Susan Aumann also called attention to the disparity between personal income growth and the rate of state government spending increases, “Maryland’s budget has increased over one billion dollars each year since 2008.  State spending has outpaced personal income growth and Maryland’s government continues to grow while its taxpayers are losing ground.”

Budget Growth vs Personal Income GrowthAs a way to reduce spending, Republicans encouraged the Governor to reevaluate new and redundant programs.

“We have to look at what we’re doing and change the patterns of the past,” said Delegate Addie Eckardt. “For the last several years the Governor has initiated new overlapping programs at the expense of existing programs. He has also used temporary federal money to fund long-term programs. All of this establishes an unsustainable pattern of increased spending that needs to stop.”

Republicans also expressed concerns about the growing state debt.

“Over the course of his term, the Governor has maxed out the State credit card,” remarked Delegate Gail Bates. “The state’s mortgage (debt service) is increasing year by year and is paid by the state’s property tax. In order to keep up with payments, property taxes will need to rise. Our children and grandchildren will be footing the bill for today’s spending.”

Debt Authorizations Have Skyrocketed“Although the Governor’s budget may not appear to be as bad this year as it has been in years past, spending still increases $1.4 billion more than last year,” said Delegate Nancy Stocksdale. “Over the last several years the pattern has been the same: Governor O’Malley raises taxes, then he increases spending, then he raises taxes again. Increasing spending again just means higher taxes down the road. Enough is enough.”

Republicans also commented on the added burden the Governor’s transportation plan would put on taxpayers.

“We agree that improving our transportation infrastructure needs to be a priority,” said Delegate Wendell Beitzel. “However, the Governor’s plan does not distribute the funding burden equally between motorists and mass-transit users. The Governor’s gas tax plan is also overly burdensome on the working poor, rural areas of the state, and Maryland’s small businesses.”

According to a recent Gonzales poll, 96% of Marylanders feel that they pay enough in taxes and 64% are against annual $1 billion spending increases.

“We are listening to the citizens of Maryland and responding with a plan that will protect against more taxes and fees. Our plan is a fiscally responsible alternative to another bloated spending plan presented by the Governor,” commented Delegate Kathy Szeliga. “The citizens of Maryland are clearly tired of the same old strategy of raising taxes to increase spending.  The leadership in Annapolis is out of touch with the pressures on family budgets today or they would not answer every challenge with more taxes.”

Click here for official copy of the press release.

House Republicans Respond to O’Malley/Brown Budget Proposal

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Annapolis – House Minority Leader Anthony O’Donnell and Minority Whip Jeannie Haddaway-Riccio today released the following statement regarding the O’Malley/Brown Budget Proposal for FY 2014:

“The O’Malley/Brown budget released today is not that different from those we’ve seen over the last several years. They are touting billions in spending cuts when in reality, spending has increased by 26% since FY 2008. Their accounting of convenience manipulates the numbers trying to make distinctions between ‘general funds’, ‘special funds’, and ‘federal funds’ to make the numbers come out in their political favor – but at the end of the day, all are funded out of the pockets of Marylanders.

Budget Growth Chart - FINAL

The legacy of the O’Malley/Brown Administration is one of bad choices for Maryland taxpayers. They have made the choice to raise taxes 24 times. They have made the choice to chase jobs and high-income earners out of our state with their tax policies. They have made the choice to rely heavily on federal monies to balance budgets making Marylanders too dependent on the whims in Washington. Instead of rolling up their sleeves to do the hard work, they are content to irresponsibly throw hard-earned taxpayer dollars at problems and hope that things get better.

With Marylanders footing the bill, they deserve an administration that will be truthful about how their tax dollars are being spent.”

House Republicans Shed Light on “Doomsday Budget” Discuss the Possibility of a Tax-Laden Special Session

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ImageAnnapolis – House Republicans today shed light on what many have called the “Doomsday Budget” that passed last week in the final hours of the 2012 Legislative Session.

“For all the hand wringing and wailing that we’re seeing in the media, the bottom line is spending in this budget increases by nearly $700 million over last year” said House Minority Leader Anthony J. O’Donnell. “It was not a budget that we would have crafted, but it is does not demand a Special Session.”

According to the Department of Legislative Services, even with the cuts included in the “Doomsday Budget”, total state spending still increases by nearly $700 million over last year. Total state spending in FY 2012 was $34.7 billion, in FY 2013 total spending increased to $35.4 billion.

“When you look at the numbers it seems that ‘doomsday’ is certainly in the eye of the beholder,” said Delegate Kelly Schulz. “While cuts to education have been making headlines, the reality is they’re basically level-funded in FY 2013, and still receiving more than FY 2012.  While interest groups like MSEA are making hysterical cries for a Special Session to increase taxes, we think after years of record education funding, the taxpayers deserve a break.”

“Our caucus offered a well thought-out plan that reduced the budget and avoided tax increases but it was solidly rejected on party lines”, said House Minority Whip Jeannie Haddaway-Riccio. “Now we have the Democratic majority’s budget that was haphazardly crafted as a coercion tool for tax hikes – it was a bluff to force their more reluctant members to vote for tax increases. This scheme backfired and now they want a do-over.”

In fact, a special session could be quite a costly “do-over” for taxpayers. When the legislature convened for a tax-raising special session in 2007, it cost taxpayers over $20,000 per day and lasted several weeks.

“With today being the Tax Day deadline, it is important to keep in mind that nearly $3 billion in new and increased taxes proposed in the 2012 Session, said Delegate Mark Fisher. “While polling showed that 96% of Marylanders felt they paid enough taxes, Governor O’Malley and the Democratic majority were still positioning themselves to take more. The fact that Maryland’s taxpayers made it through the session with very few of those taxes passing borderlines on miraculous.”

“Even in the final days of the 2012 Session Governor O’Malley was still pushing for a gas tax increase and even floated the idea of another sales tax increase, said Delegate Haddaway-Riccio.  “This ‘Doomsday Budget’ is a contrived crisis to give them another bite at the tax apple. We do not need a special session that allows the tax-hungry General Assembly to make another grab for Marylander’s wallets.”

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Governor O’Malley “Balances” Budget on the Backs of Small Business and Middle Class

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Annapolis – Governor O’Malley today introduced a budget that is precariously balanced on the backs of Maryland’s small businesses and middle class.  Amid fantastical claims of over $7 billion in cuts, this budget increases spending by more than $1 billion over FY 2012 – just as all of the O’Malley budgets have done over the last six years.

 The Governor’s budget proposal includes numerous tax increases including capping income tax deductions and phasing out personal exemptions for those making $100,000 per year or more.  The budget increases the tax on smokeless tobacco and requires the collection of sales tax on internet purchases.  In addition, it increases the burden on local and county governments potentially forcing a tax increase at that level as well.

 “The Governor’s budget redefines “wealth” in this state and takes aim at the middle class”, said House Minority Leader Anthony O’Donnell.  “Forget millionaires, this budget takes aim at thousandaires, phasing out income tax deductions such as mortgages and business expenses for those making even $100,000 per year!  The Governor is balancing the budget on the backs of the middle class and small businesses at a time when we should be looking for ways to make them thrive.”

 “For all of the Administration’s grandstanding about job creation, this budget takes aim at Maryland’s small businesses, the driving force behind our economy”, said House Minority Whip Jeannie Haddaway-Riccio.  “From taxing coin dealers to phasing out income tax deductions, the O’Malley budget will make it more expensive to do business in Maryland.”

 “What is most chilling about the Governor’s budget proposal is that even with all the tax hikes it includes, it is only a preview of things to come”, said “O’Donnell.  “It does not include the massive increase in the flush tax or the hike in the gas tax and other fees that will be a part of the transportation package.  Maryland’s families are struggling to make ends meet and deserve more than a pickpocket government.”

 

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Winners and Losers of the 2011 Session

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Now that the 2011 Session has ended everyone will opine about who the “winners” and who “losers” were.  Who was successful in getting their legislation passed and who was left in the dust.  We are taking the opportunity again this year to put in our two cents. 

Winners

Criminals…whether you are a convicted felon serving a life term or an illegal immigrant flagrantly violating federal law, the Maryland General Assembly had nothing but love and compassion for you this year.  House Bill 302 – Inmates – Life Imprisonment – Parole Approval grants automatic release for those serving life sentences if they have to wait more than 180 days for the Governor to approve their parole.  We wouldn’t want hardened criminals to be inconvenienced now would we?  Senate Bill 167 allows illegal immigrants to pay in-state tuition.  Proponents of this bill will tell you that these students have done nothing wrong this will allow them to go to college and become contributing members of society, completely ignoring the fact that once they graduate it will be a violation of federal law to actually employ them.

Labor Unions…a consistent winner in Maryland, labor unions did well again this year.  The Democratic majority along with O’Malley Administration let the unions expand their strangle-hold on the state by unionizing independent home care providers.  As they did with daycare providers several years ago, independent home care providers will now be subject to collective bargaining.  Those who choose not to join the union will be charged a “service fee”.  Unions also secured themselves a victory in the eyes of their membership with the $750 bonus for state employees.  The truth about that “bonus” is that the bulk of it will go to pay the service fee that non-union employees will have to pay starting July 1.  So the unions get to pocket most of the money they’re also taking a tremendous amount of credit for.  Good work if you can get it.

Prince George’s County, Montgomery County, and Baltimore City…after strong “negotiations” (or vote trading) these “big three” jurisdictions are walking away with the lion’s share of the revenues from the Alcohol Tax increase.  While the whole state will pay this bill and suffer the impacts like the closure of small businesses, it is these jurisdictions that will reap most of the benefit.

Losers

Taxpayers…Maryland’s taxpayers have made the loser’s list once again. Last year, they escaped a direct tax increase, but this year they were not as fortunate.   The budget included a number of tax and fee increases…doubling the Vehicle Titling Tax, the Vanity Plate Fee, Land Recording fees, Birth Certificate fees.  Even our sweet little silver-haired grandmothers will be paying the 38% increase in the Nursing Home Tax.  The sales tax on Alcohol was increased by 50%.  Does this menu of tax increases mean that Maryland has finally ended its ongoing budget crisis?  Sadly, no.  In fact, spending increased over 10% from last year to this year and there is talk of more tax increases as early as this fall.  With the increase of the sales tax on alcohol, Maryland’s Tax Freedom Day be pushed to April 18th, meaning the taxpayers will have to work an extra day before they have paid all their taxes for the year.

Vulnerable populations…we all heard the radio commercials, saw the rallies, and read the letters from members of the Maryland’s most vulnerable populations – the disabled and mentally ill.  They were advocating an increase in the Alcohol Tax and dedicating that money to their chronically underfunded programs…a dime a drink with a link they called it.  Maryland’s most vulnerable populations were exploited by the Democratic majority who used them to bring the bill forward but then dedicated the bulk of the money to the “big three” jurisdictions, including Montgomery County – one of the wealthiest counties in the country.

Governor Martin O’Malley…one would think after a landslide win just a few months ago, Governor O’Malley would have the political capital to put his agenda on  a glide path through the General Assembly.  This proved not to be the case.  His Wind Energy Proposal deflated and his Septic Bill was flushed.  The Governor didn’t even stay in town during the critical final days of session…he headed to New Jersey to pick a fight with  Chris Christie, a Governor that is actually doing something.

Tick tock tick tock…

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While the 2011 Session is winding down, the General Assembly’s actions are ramping up.  We wanted to take a break to update you on the status of some of the major issues that have moved this week.
 
 
Spend, Tax, Repeat
 
Again this week, the General Assembly displayed how little self control they have when spending the taxpayer’s money. 
 
As we told you earlier this week, the Capital Budget came to the floor on Tuesday.  The bill is packed full of projects across the state and borrows money to pay for them – money that Maryland will not be able to pay back without increasing in the property tax in the near future.  Republican members offered a series of amendments to reduce the amount of borrowing by 5%, 3%, and 1%.  There was no will among the majority to reduce spending – not even by 1% – and they rejected these amendments.    The bill passed the House 98-41 and the Senate 41-6.
 
In addition to the Capital Budget, final approval was also given to the state’s $34 billion Operating Budget.  In its final form, the Operating Budget leaves a mere $50 million in unspent funds.  The lowest fund balance since 2004 and very little cushion against unforeseen needs or sudden economic problems.  This tiny fund balance was due in large part to the Governor’s submittal of a $62 million supplemental budget – more spending that was submitted to the General Assembly last week.
 
The House Ways and Means Committee held a hearing on the Senate’s Alcohol Tax on Friday morning.  At the beginning of session, talk about the alcohol tax was linked to increasing funding for the disabled populations.  As the bill came over from the Senate, the bulk of the tax is going to Prince George’s County and Baltimore City Schools.  As we draft this update, deals are being struck to spread the wealth to other jurisdictions to get this bill passed. It seems like a lot like “buying off” votes to us.  The bill could move as early as this afternoon.  We will update you as the bill moves forward.
 
 
Dream a little dream…
  
The bulk of Thursday’s 6 hour floor session centered around debate on Maryland’s “Dream Act” which would allow illegal immigrants to receive in-state tuition.
 
The Republicans offered a variety of amendments to the bill in an effort to improve it somewhat, but none of them were adopted and the bill passed today without amendments.
 
Among the amendments offered were an amendment by Delegate Vitale which would require that the comptroller verify that federal and state tax returns were filed before in-state tuition is granted.  Since people who aren’t in this country legally aren’t able to pay taxes, this amendment would have rendered the bill fairly innocuous.  Minority Leader Delegate O’Donnell offered an amendment that would require an immigrant to have a certified application for permanent residency before being eligible to receive in-state tuition.  Delegate Kipke offered an amendment that would allow counties to opt-out of this program if they wish.  This amendment would have relieved already over strapped counties from the burden of funding in-state tuition for non taxpaying immigrants.
 
After hours of debate on Friday, and additional amendments from Republicans that would limit the amount of money that could be expended on giving slots to illegal immigrants, the bill passed the House 74-66.
 
O’Malley’s Wind Farm Blown Off 
 
Governor O’Malley’s offshore wind proposal HB 1054 was decided by the House and Senate to be studied for the rest of the year. In the final days of session O’Malley increased his “aggressive lobbying efforts from environmentalist and labor unions” but when a number of uncertainties about the bill became apparent, including whether or not the “wind farm would even be built off Maryland’s coast” since the legislation did not specify the location, thus creating the possibility that the site could be located hundreds of miles away, benefiting the local economy of another state. 
 
While the legislation was guaranteed to increase electric bills to Maryland ratepayers in the form of a surcharge, different amounts and totals were never confirmed by the Governor’s office, the Public Service Commission, and the Department of Legislative Services. Governor O’Malley was unable to address these concerns on both the cost of a subsidy and rate increases. While the legislation is being sent to a study over the summer, and is effectively dead for this year, it is likely to reappear in the next legislative session.
 
 
Lock your doors…
  
House Bill 302, sponsored by Delegate Curt Anderson (D, Baltimore City) passed the final hurdle today on its way to the Governor’s desk for signature. Currently, after the Maryland Parole Commission recommends parole for a particular individual, the Governor must approve that parole.  The Governor, in this capacity, acts as the final arbiter on which inmates are released back into the community before their sentences are fully completed.
 
This legislation alters the process to parole a criminal who was sentenced to life imprisonment, making it possible for the inmate to be released without affirmative action by the Governor. Under the new process, if a criminal sentenced to life in prison has served 25 years, and is recommended for parole by the Parole Commission, the Governor has 6 months to write a letter to the commission refusing parole for that inmate. If the Governor doesn’t act one way or the other, the prisoner is granted parole and released. This legislation removes the responsibility of the Governor to consciously and deliberately take action in order to release a potentially violent criminal back into the community.
 
House Republican Caucus members supported efforts to amend the Senate version of the bill in order to deny, rather than grant, parole should the Governor fail to act upon the recommendation of the Commission. This amendment was first approved, but following parliamentary maneuvering, it was ultimately rejected. As the legislative process was completed, the House version moved through the process and was sent to Governor O’Malley for signature or veto. Ironically enough, should the Governor fail to act upon this legislation, it will pass and become law. 
 
Who needs private enterprise when you have state government?
 
Concerns continue to surround the Governor’s Invest Maryland program. First and foremost the bill costs taxpayers $100 million in order to raise $70 million.  Taxpayers lose 30% of their investment before a single dollar is even invested.
 
Republican Delegates brought up a number of concerns on the House floor.   Concerns range from the Administrations authority and the Governor’s influence on appointing members to the authority that oversees the government fund. (Not that this governor would ever think of letting his friends benefit from state projects.)  Amendments were also proposed by Republican Delegates which would have removed government control and guarantee the state will receive 100% return of the original investment. However, these amendments were not taken into consideration and left the plan vulnerable for political influence to control this venture fund.   The bill passed the House 94-43.

Weekly Update – March 26

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Cross-over Week

This is “cross-over week” in the General Assembly – an insider’s term for the week before important bill deadlines.  Under the rules, each chamber has until Monday, March 28th to send to the other chamber those bills it intends to pass.  So, all the House Bills must be passed on to the Senate and vice versa.  Bills passed after that date must go to the respective chamber’s Rules Committee – a hurdle to avoid with less than three weeks remaining.  Cross-over week means multiple floor sessions and multiple committee voting sessions.  The pace is fast and the tension is high.

House Passes $34 Billion Budget

Contrary to what you may read in the Baltimore Sun, the House of Delegates passed a $34 billion budget Thursday night. 

During floor debate on the budget, Minority Leader Tony O'Donnell shares a chart illustrating Maryland's budget growth since 1979.

Spending is $1 billion more than last year and just about every special interest in Maryland is protected.  Well, every special interest except the taxpayers.

General Fund spending in this budget increases by 10.6% over last year.  This was largely because of the backfilling to replace Federal Stimulus dollars that are no longer available.  Had the necessary reductions been made two years ago, these increases would not have been necessary.  But, the Governor and Democratic leadership could not resist the temptation to use that temporary money to fund permanent programs.  So, here we are. 

 The budget was balanced with a combination of tax and fee increases including:

  • Doubling the Vehicle Titling Tax from $50 to $100
  • Doubling the Vanity Plate Fee from $25 to $50
  • Doubling the Land Recording Fees from $20 to $40
  • Doubling the Birth Certificate Fees from $12 to $24
  • Doubling the Parole Supervision Fee from $25 to $50
  • Increasing Nursing Home Tax from 4% to 5.5%
  • Increasing Hospital Assessments, adding 2.5% to rates
  • Applying a 2% Tax to Insurance Premiums for the Injured Workers Insurance Fund

The unsustainable nature of these spending increases will make the taxes and fees included in this budget a mere preview of things to come. 

What is important to remember is there was another option.  The House Republican Caucus offered an alternative budget that would have decreased spending and put Maryland on a course to lower taxes and fiscal stability.  The Democrats in the House of Delegates rejected this alternative at every turn.  So when the time comes for another round of massive tax increases and they tell you there is no choice but more taxes – don’t believe them. 

Transgender Bill

On track for passage today is HB 235 – Human Relations – Sexual Orientation and Gender Identity – Antidiscrimination.  This bill would protect people who identify with a gender other than the one they were assigned at birth, or people who wish to dress in a manner that is not congruent with the gender they were assigned at birth. 

For example a male teacher who wishes to dress as a female must, without the benefit of a sex-change operation, be allowed to dress as a woman in the classroom and cannot be fired or punished for doing so.  An amendment to the bill adds that the employee must dress consistently.  A man may dress as a woman if he wishes, but he must consistently do so – he cannot switch back and forth.

The bill deals only with housing and employment.  In previous years similar bills have been introduced and have included the use of bathrooms and locker rooms, which are not included in the bill this year.  Further, the bill would protect transgendered and transsexuals from being discriminated against when renting property.  An amendment to the bill allows individuals to refuse a renter based on any criteria, but not to include discriminatory language in an advertisement.  For example, if Aunt Martha wants to rent out an apartment that she owns, and a transgender person wants to rent it, she’s free to refuse him if she wishes.  She cannot, however, put an advertisement in the newspaper that reads “Apartment for rent. One bedroom, one bath. Furnished. No smoking, no pets, no transgenders.” 

This bill has been flying under the media’s radar and may pass so the liberal Democrats in the General Assembly can appease their supporters in the Gay, Lesbian, Bisexual & Transgender (GLBT) Community who are still upset with the failure of the Gay Marriage bill.

Weekly Update March 19th

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The Grim Reaper, just one example of the over-the-top rhetoric at the Enough is Enough rally.

Unions and the State of Maryland – When will it be “Enough”?

Calling it the “Enough is Enough” rally, thousands of union members descended upon Annapolis Monday night to protest the Governor’s budget.   They came equipped with their standby class warfare calls,their rally signs, and even The Grim Reaper (who is apparently a member of the GOP).  Never before has such a wholesale sense of entitlement rocked the streets of Annapolis.

Governor O’Malley made an appearance, and in what may be a first in his political career, actually received “boos” from the union members.  He told the crowd that he didn’t like his budget either – a rather bizarre statement since just over a month ago he said his budget, “…rightly focuses resources on jobs and innovation – the worthwhile costs of making the right choices and investments in our future.”

The reality is that while individual state employees have every reason to be upset with the Governor and his budget, the unions – particularly AFSCME – really shouldn’t be crying foul.
Consider this: part of the Governor’s budget includes a $750 bonus for state employees.  This  scored him big points with the union and at the same time allowed the union to score big points with its membership.  But, what hasn’t been widely discussed is that the bulk of this $750 bonus will not make it into the pockets of Maryland’s employees, it will instead line the coffers of AFSCME via the fair share charge.

The fair share charge is a product of “The Fair Share Act” which was a piece of Governor O’Malley’s legislative package in 2009.  It forces non-union state employees to pay a fee to the exclusive representative of their collective bargaining unit.  Who is the exclusive representative for 78% of the bargaining units subject to this fee?  AFSCME!  Even if you are a dues-paying member of another union such as Maryland Classified Employee Association (MCEA), you are still subject to the fee.

The fair share fee will be assessed for the first time in the 2012 Fiscal year which starts July 1.  While the amount of the fee is still being negotiated, it is expected to be in the ballpark of $400 per year – more than half of the $750 bonus.  According to the analysis by the Department of Legislative Services, with the bonus spread out across 26 pay periods (as it is currently designed) it will be swallowed up by the fair share fee (roughly $15 per pay period), and after taxes will only make the whopping impact of an additional $3.50 per pay period.

But don’t take our word for it, the non-partisan Department of Legislative Services said in their budget analysis “…the bonus as currently conceived will be spread over the 26 pay periods of fiscal 2012. Given the current tax structure for the average employee earning $48,500 per year, this $28.85 pre-tax boost to each check would likely result in the general post-tax range of an added $18.50 per pay period. This amount will be just enough to offset the fair share charge, hence doing little to provide a bonus to employees.”

The unions have fared quite well under Governor O’Malley’s leadership.  It’s a shame we can’t say the same for the taxpayers.  But, the question is – when will it be enough?

In-State Tuition for Illegal Immigrants

The controversial bill giving illegal immigrants in-state tuition rates moved out of the Maryland State Senate late Monday night. This legislation would allow illegal immigrants residing in the state and attending Maryland public schools the ability to receive in-state tuition benefits at Maryland public colleges.

SB 167 – Public Institutions of Higher Education – Tuition Rates – Exemptions makes illegal immigrants who have attended a MD high school for three years, and go on to complete an associate’s degree at the community college in their county of residence, eligible for in-state tuition rates both at the community college and at any public four year institution in the state. Currently, all students achieving an associate’s degree from a MD community college are eligible to transfer to a public institution to complete a bachelor’s degree.

Besides deepening Maryland’s current $1.6 billion deficit, there is an associated loss of opportunity for legal high school graduates in the state of Maryland. Currently, there are a select number of admission slots open to in-state residents. If the bill were to pass, the opportunities for legal in-state residents would decrease.

According to the Baltimore Sun, “Students who complete their associate’s degree would then be eligible to transfer to a four year institution with the same discount. Those who attend community college could save between $4,000 and $6,000 per year, while those who move on to four-year institutions could save much more.”

The fiscal impact of the Dream Act would be at “a cost of $800,000 next year. However, the total cost could grow to 3.5 million by 2016,” if signed into law. Former Governor Ehrlich vetoed a similar bill in 2003 but present Governor O’Malley has confirmed that he will sign the current bill into law if it passes the House.