Winners and Losers of the 2011 Session

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…

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.

House Republican Caucus Weekly Update

Same Sex Marriage Update

After a long debate on Friday, the House voted to send SB116, the same sex marriage bill, back to the House Judiciary committee.  Even with weeks of pressure and arm twisting by the Democratic leadership to pass this bill, when the time came it was clear that the votes simply were not there.  Rather than suffer the embarrassment of having the bill die on the floor, supporters decided it was better to put it back in committee.  The issue is not expected to come up again this session.

Maryland’s Budget – Appropriations Committee Sets a Low Bar

The House Appropriations Committee has begun to make preliminary decisions on additional cuts to Maryland’s Budget.  According to our Ranking Member on the Committee, Delegate Gail Bates, the Democratic leadership on the Committee has set the stunningly low goal of an additional $120 million in reductions to the Governor’s budget.  That is a reduction of less than ½%.  There is no doubt that when this budget comes to the House floor, the Democrats on the Committee will pound their chest calling this a socially responsible and fiscally prudent budget. 

It is surprising that the Appropriations Committee has set the bar so low, given that their Chairman, Delegate Norm Conway, sent an email to the entire House of Delegates in late January discussing the structural deficit.  In his email, he stated “even with the Governor’s current budget proposal, the structural deficit still remains at $1.2 billion for fiscal year 2012”.  He also called this “the single most important issue the General Assembly will address this year.”  With only $120 million in reductions, this budget is anything but responsible or prudent.  In fact, it could put us on the unavoidable path to more tax hikes. 

Maryland’s budget problems, while significant, are not unsolvable.  As we told you last week, the House Republican Caucus has created a budget plan that would reduce the size of government and allow us to reduce the tax burden on our citizens and businesses.  This plan has been rolled into a bill, HB 1294 – The Deficit Reduction and Financing Act and will have a hearing on March 15th

Off-Shore Wind

The O’Malley Administration’s House Bill 1054 – Maryland Offshore Wind Energy Act, creates an off-shore wind project to be located in the Atlantic off the coast of Ocean City, MD.  During the Governor’s presentation of HB 1054, many Delegates became concerned when no one on the panel of supporters could estimate the project costs to build a 500 Megawatt (MW) offshore wind project.

In 2008 the Maryland Public Service Commission issued the Levitan Report, which came at the cost of millions of dollars and two years of expert study.  The analysis determined that building and operating an offshore wind facility was severely uneconomical.  Just over two years later the Governor’s administration declared this information to be obsolete. Still not obtaining the findings to support his initiative, the Governor issued an Executive Order requiring DNR to prepare a Long Term Electricity Report due this December. Delegate Hershey questioned the Governor and asked to wait for the results of this report prior to asking Marylanders to commit to a 25 year debt of over $4.6 billion, according to the bill’s fiscal note.

Should the project move forward, each residential ratepayer could expect their average monthly bill to increase for the next 25 years.  The House Republican Caucus will closely watch the progress of this proposed off-shore wind farm to ensure Marylanders are not asked to provide financial backing to Governor O’Malley’s pet project in spite of any associated economic considerations.

State of the State Response

 House Minority Whip Delegate Jeannie Haddaway-Riccio will deliver the Republican response to the Governor’s State of the State Speech.  The response will air on MPT today following the Governor’s speech at Noon.    The Governor’s speech and Delegate Haddaway-Riccio’s response can be viewed here The text of her speech is below.

  

Good afternoon.  I’m Jeannie Haddaway-Riccio and I am a member of the Maryland House of Delegates from the 37th District on the Eastern Shore. 

I was recently elected Minority Whip in the House and have therefore been afforded the privilege to address you today.

I want to thank Maryland Public Television for providing us with this opportunity and I would like to thank you – the viewers – for taking the time to listen to an alternative point of view from the Republican Caucus. 

As you know, there is an important difference between hearing and listening.  As voters in Maryland – you sent us a strong message in the last election. 

The crux of your message was to slow government spending, improve our economy and ensure a stronger future for our State.  I believe that you were also saying put the politics aside and get the job done.  The Maryland Republican Party wholeheartedly agrees.

 

With that in mind, we expected a budget that was lean, that curbed spending and that addressed our structural deficit. 

But over the past few days, legislative leaders on both sides of the aisle have noted the fact that the Governor’s budget only reduces the deficit from $1.6 billion to $1.2 billion. 

While the Governor has made a start, it simply is not enough.

With spending still outpacing revenues, it will now be up to the Maryland General Assembly to do the heavy lifting.

We understand that this is not an easy task and it’s one that requires us to weigh our decisions not as Democrats or Republicans, but as representatives of the people. 

The citizens of Maryland have the expectation that we restore the fiscal health of our State and get government back to its core functions and out of your everyday life.

As a Caucus, that is a responsibility that we take very seriously.

While it would be easier to sit on the sidelines and criticize, we have chosen to be leaders in this process. 

Again this year, our budget recommendations significantly reduce the state’s deficit without raising taxes, without reducing vital services and without harming vulnerable populations.

These accomplishments highlight key differences in our philosophy and approach.

We agree with the Governor’s decision to end state employee furloughs, but to provide every state employee with a $750 bonus and five more days of paid vacation in the midst of a $1.2 billion deficit is irresponsible – especially if it is being paid for with a tax on hospital patients and nursing home residents.

Similarly, we agree with the Governor on the urgent need for pension reform.   This is particularly important given the fact that our pension shortfall has grown to billions of dollars. 

But the savings achieved from that reform should be re-invested in the fund to ensure solvency in the system.  Employees who have worked hard for many years deserve the peace of mind that their retirement will be there when the time comes.

We also oppose the continued practice of raiding funds to fuel new spending.  In the Governor’s FY2012 budget, dedicated tax payer dollars in the Transportation Trust Fund and the Chesapeake Bay Restoration Fund will again be diverted for other purposes. 

At the same time, Democratic leaders are seeking to increase taxes and fees for these funds. How can we – in good conscience – expect taxpayers to entrust their money to these purposes when the funds are continually raided for new spending?

In examining the capital budget, we looked at its effect on our State’s long term debt.  Many legislative members, including myself, have important projects that we would like to have funded, but in light of the economic times we face, our Caucus has asked that these projects not be funded. 

We believe this to be a more measured approach that provides breathing room and security for the future.

The Governor also focused on the need to create and retain jobs in the State of Maryland.

Maryland is fortunate to have economic engines such as the Port of Baltimore and lucrative industries such as biotechnology and cyber security.  Our beautiful natural resources also allow us to benefit from tourism, film and the arts.

But addressing the regulatory entanglements and the tax climate in our state would allow us to grow exponentially.  In a time of global competition, we cannot afford to enact policies that cause Maryland to be at a disadvantage. 

All time high unemployment insurance rates and the prospect of more government intervention in wage setting and employment practices will be devastating to our small businesses. 

Also of concern is our rush to be first in enacting Federal health care reform.  It’s important for health care to be affordable and accessible, but creating a new state agency and a government-run health care exchange costs money, adds bureaucracy and risks Maryland jobs.

If we must be first, we believe that a privately run exchange would create robust competition among the private sector – to lower health care costs.  Medical liability reform and modernized reimbursement rates are other important policies that should be the focus of any health reform agenda.

Lastly, I would also like to take the time to offer our perspective on Maryland’s energy policy.  In our view, a diversified energy portfolio is essential to providing affordable, reliable and sustainable power to our State. 

Off Shore wind, solar, geothermal and other renewable energies are important components.  But they are not mutually exclusive to other sources of energy. 

A new nuclear power plant at Calvert Cliffs will also bring jobs and clean power and a broader solution to Maryland’s energy needs.

 

All of these policy considerations highlight what we deem the most important to our State at this time.

As leaders, we must make sound decisions with an eye toward limited government, supporting private sector growth and reducing the tax burden on our citizens. 

Ingenuity, determination and the dignity of a strong workforce will lead us to better times – not government intervention, bureaucracy and the old, tired tax and spend mentality.

We see a bright light at the end of the tunnel.   As Marylanders and Americans, we have done it before and we can do it again – but not without participation and true leadership from all branches of government and from both sides of the aisle.

As your Republican Caucus, we gladly accept that responsibility and will strive to meet that responsibility to build a strong foundation for future generations.

Thank you again for hearing our viewpoint.

May God bless you, may he bless the State of Maryland and may he bless the United States of America.

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Not by chance but by choice…

  • It is not by chance but by choice that Governor O’Malley pushed through the largest tax increase in Maryland’s history.
  • It is not by chance but by choice that by 2012 Maryland will have lost an estimated 8,334 jobs from the sales tax increase alone. 
  • It is not by chance but by choice that Governor O’Malley has furloughed State Employees three times while still maintaining his taxpayer-funded chef at his taxpayer-funded residence.
  • It is not by chance but by choice that Governor O’Malley is seeking the repeal of the Maryland-mined Coal Tax Credit – jeopardizing more than 1,000 Maryland jobs in coal, trucking, and other related industries.
  • It is not by chance but by choice that Governor O’Malley refused to implement sex offender laws putting our communities and our children at greater risk.
  • It is not by chance but by choice that Governor O’Malley extended unemployment benefits to part-time employees at the same time unemployment rates were nearing historic highs.  This decimated the Unemployment Insurance Trust Fund – now employers are facing a tripling of their insurance premiums at a time when they are already reducing their workforce to stay afloat.
  • It is not by chance but by choice that the O’Malley administration’s stormwater management regulations go so far beyond the legislative intent that they will eliminate any growth in new construction jobs.
  • It is not by chance but by choice that Governor O’Malley has increased total spending by $3 billion over the last four year – the same amount as our projected deficit.
  • It is not by chance but by choice that Governor O’Malley used the regulatory billy club of the Public Service Commission to threaten the potential building of Calvert Cliffs III – jeopardizing 4,000 long term construction jobs and hundreds of high paying permanent jobs.
  • It is not by chance but by choice that Governor O’Malley accepted billions of stimulus dollars committing Maryland to obligations it can’t afford and leaving the bill for our children to pay.