The Minority Report: Session 2013

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.

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.

Friday Press Clips

Monday Press Clips

Monday Press Clips

This Week In Annapolis

State bond cost could outstrip revenue

Lawmakers scramble for compromise as businesses reject O’Malley’s unemployment fund plan

Democrats ask for Republican ideas to solve budget crisis

Democrats seek an expansion of gambling to include table games

Chesapeake Bay blowup: How to trap pollutant-filled rain

New stimulus jobs numbers for Maryland, fresh ammo for campaign attacks

Delegate Shank trying again to get Justice’s Law passed

No judgment for judges: Gansler’s plan for judicial elections could rob citizens of any meaningful oversight

Press Clips

Stimulus Not Solving School Fiscal Woes

 

Lethal Injection Draft Regulations Released

Federal Engineers Questioned Bay Bridge Bolts’ Integrity

McIntosh Wants to Put the “Smart” Back in Growth

UM Audit Finds Credit Card Misuse

State to Reform Foster Care System

Governor Designates “Smart Sites” Across State

State Delegate Plans to Renew Push for Reform