Governor Hogan’s State of the State Address “A New Direction for Maryland”

SOS

Speaker Busch, President Miller, members of the General Assembly, distinguished guests, ladies and gentlemen.

It is an honor, and I am truly humbled, for the opportunity to appear before this 435th General Assembly – as Maryland’s new governor – to report on the state of our state.

Marylanders are among the nation’s hardest working and most educated people. We have universities and schools that are among the best in the nation.

No state can match the beauty of the Chesapeake Bay, our beaches and farms, or the mountains of Western Maryland, the Port of Baltimore, or the historic charm of every corner of our state.

But while our assets are many, and our people are strong and hopeful, their state is simply not as strong as it could be – or as it should be.

We have a lot to do, to get Maryland back on track and working again.

The challenges we face are great.

High taxes, over-regulation, and an anti-business attitude are clearly the cause of our economic problems. Our economy is floundering, and too many Marylanders have been struggling, just to get by.

40 consecutive tax hikes have taken an additional $10 billion out of the pockets of struggling Maryland families and small businesses. We’ve lost more than 8,000 businesses, and Maryland’s unemployment nearly doubled.

We’re number three in the nation in foreclosures, and dead last in manufacturing. We’ve had the largest mass exodus of taxpayers fleeing our state – of any state in our region, and one of the worst in the nation.

And, while most states around the country have turned the corner – sadly, Maryland continues to languish behind. The federal government ranked our state’s economy 49th out of 50 states.

That is simply unacceptable.

According to a recent Gallup poll, nearly half of all Marylanders would leave the state if they could. As a lifelong Marylander who loves this state – that just breaks my heart.

We fail all Marylanders if we simply accept these dismal facts as the status quo.

Well – I refuse to accept the status quo, because the people of Maryland deserve better.

Over the past few years, as I traveled across the state, I listened to the concerns of Marylanders from all walks of life. The common theme I kept hearing was frustration. People everywhere feel a real disconnect between Annapolis and the rest of Maryland. They feel that we are way off track, heading in the wrong direction, and that change is desperately needed in Annapolis.

The problems we face aren’t Democratic problems, or Republican problems. These are Maryland’s problems.

And they will require common sense, Maryland solutions. With the will of the people behind us, and with all of us working together, we can put Maryland back on track.

And we will.

Today, Marylanders look to us for leadership. They look to us to put Maryland on a new path, toward opportunity and prosperity for all our citizens.

Ladies and gentlemen, it is time for us to listen to Maryland’s hard working taxpayers and our job creators.

The people of Maryland simply cannot afford for us to continue on the same path of more spending, more borrowing, more taxes, and politics as usual.

It is time for a new direction for Maryland.

Our administration will chart a new course; one guided by simple, common sense principles. Our focus will be on jobs, struggling Maryland families, and restoring our economy.

And every decision I make as governor will be put to a simple test.

Will this law or action make it easier for families and small businesses to stay in Maryland?

And – will it make more families and small businesses want to come to Maryland?

Our administration will work with all of you to enact the necessary budgets, tax reductions, regulatory reforms, and legislation that is necessary, to ensure that we turn our economy around.

Just 24 hours after being sworn into office, I proposed a budget for Fiscal Year 2016 that fairly and responsibly controls spending.

When my team began the budgeting process, we encountered a baseline budget of $17 billion in expenses and projected revenue of only $16.3 billion. The state was poised to somehow spend $700 million that we simply did not have.

Mandatory payments on state debt had increased by 96 percent just this year. We face an $18.7 billion unfunded pension liability.

Faced with this troubling reality, we revised that script – delivering a fiscally responsible budget that only expends what we take in. This is just common sense. And will come as no surprise to anyone that manages a family’s finances, or runs a small business.

Our team created a structurally balanced budget for the first time in nearly a decade. This budget sends a clear and important message that the days of deficit spending in Maryland are over.

We had to make some very tough decisions in just the first few days of our administration in order to get this state budget under control. But our budget puts Maryland on sound financial footing, without raising taxes or fees, without eliminating agencies, departments, or services, without imposing furloughs and without laying off a single state employee.

Our new budget also funds our priorities, including providing record investment in K-12 education and increased investment in higher education.

This proposed FY2016 budget is just a start. We will have much more to do in the days and months ahead to correct our state’s fiscal course. I am eager to work cooperatively with the General Assembly to meet these challenges head on.

Before I became governor, increases in spending were promised that simply could not be kept. If ever Maryland needed a dose of honesty, it’s now.

The debates that take place in this chamber in the weeks ahead cannot ignore the certainty of our current fiscal situation. We will make every effort to be fair, judicious and thoughtful, and my administration will work hard to preserve jobs and to fund priorities.

Budget choices are never easy, and you may have different ideas and solutions. And we look forward to hearing them, and to working together with you to find common ground.

As long as those solutions don’t include increasing taxes, spending more than we take in, or going further into debt.

And remember, every penny that is added to one program, must be taken from another.

Failing to spend the taxpayer’s money in a responsible way could eventually jeopardize our ability to adequately fund education, transportation, environmental programs, and provide support to the vulnerable and those most in need.

We simply cannot let that happen.

So, how do we begin to change direction, and to improve the state that we all love?

It won’t happen overnight, and there will be times and issues that will test us all, but there are a number of initial actions that I believe we must begin working on immediately.

  1. Making Maryland More Competitive

Maryland’s anti-business attitude, combined with our onerous tax and regulatory policies have rendered our state unable to compete with any of the states in our region. It’s the reason that businesses, jobs and taxpayers have been fleeing our state at an alarming rate.

It’s at the heart of the fiscal and economic issues we are currently dealing with, and it is something we must find solutions to.

A year ago, I held my second annual Change Maryland Business Summit on Improving Maryland’s Economic Competitiveness.

We became the leading voice on these issues – it’s the reason I have the honor of being your governor, and it will be the primary focus of our administration.

I want to commend Senate President Miller and Speaker Busch for recognizing the need to make Maryland more economically competitive.

A year ago, at their urging, this legislature created the Maryland Economic Development and Business Climate Commission, also known as the Augustine Commission, to make recommendations to make Maryland competitive. It was a great first step, and we are anxiously awaiting the recommendations of this commission.

But, I am confident that we will find many areas of agreement to make Maryland a more business friendly and more competitive state, so that we can create more jobs and more opportunities for our citizens.

  1. Making State Government More Efficient And More Responsive

I’m proud of the experienced, diverse and bipartisan Cabinet that we have assembled to take over the reigns of state government.

Many of them bring fresh, innovative ideas and valuable real world, private-sector management expertise to their agencies. Their primary mission will be to find ways to restructure their agencies and to make state government more efficient, and more cost effective.

But, we also want to change the culture of state government.

The voters have given us an opportunity to build a government that works for the people – and not the other way around.

Comptroller Franchot noted at his swearing-in last week that we must reinstate old-fashioned customer service to every aspect of government.

I completely agree – and together we will.

  1. Repealing The Rain Tax

Dealing with the problem of storm water management and working to restore our most treasured asset, the Chesapeake Bay, is a goal we all strongly agree on.

But in my humble opinion, passing a state law that forced certain counties to raise taxes on their citizens – against their will – may not have been the best way to address the issue.

If there was one message that Marylanders have made perfectly clear it was that taxing struggling and already overtaxed Marylanders for the rain that falls on the roof of their homes was a mistake that needs to be corrected.

This week, our administration will submit legislation to repeal the rain tax.

  1. Tax Relief For Retirees

Nearly every day I hear from folks who say that they love the state of Maryland, that they have spent their entire lives here, and that they don’t want to leave their kids and grandkids. But, that they simply cannot afford to stay here on a fixed income.

We are losing many of our best and brightest citizens to other states.

Eventually, once we solve our current budget crisis, and turn our economy around, I want to reach the point where we are able to do away with income taxes on all retirement income, just as many other states have done.

This week, we will start heading toward that goal by submitting legislation that repeals income taxes on pensions for retired military, police, fire, and first responders.

These brave men and women have put their lives on the line for us – they deserve it – and they have earned these tax breaks.

  1. Tax Relief For Small businesses

I have spent most of my life in the private sector, running a small business in a state that, at times, seemed openly hostile to people like me.

There is much more for us to do, but as a first step, I’m proposing cutting personal property taxes for small businesses.

This burdensome tax and bureaucratic paperwork discourages the creation of new business, and drives small businesses and jobs elsewhere.

This legislation would create a tax exemption on the first $10,000 in personal property, entirely eliminating this tax for more than 70,000 small business owners — or one-half of all Maryland’s businesses.

  1. Repealing Automatic Gas Tax Increases

After syphoning a billion dollars from the Transportation Trust Fund, a decision was made to enact the largest gas tax increase in state history. This legislation also included language that would automatically increase taxes every single year without it ever having a coming up for a vote.

Marylanders deserve the transparency to know how their elected leaders vote every time the state takes a bigger share of their hard-earned dollars. This is a regressive tax that hurts struggling Maryland families and our most vulnerable, and which adds to the cost of almost everything.

These automatic tax increases should be repealed, and we will submit legislation to do so.

  1. Improving Transportation

Over the last several years, monies for local road improvements have been slashed by up to 96 percent.

Our administration is committed to restoring the money that was taken from the transportation trust fund, and to making sure that it never happens again.

Today I am pleased to announce a supplemental to our FY2016 budget that will increase Highway User Revenues by $25 million and give counties and municipalities the most money for road improvements that they have received since FY 2009.

Further, we are committed to increasing the local share of Highway User Revenues from 10% today to its original high point of 30% over the next 8 years.

This initial tax relief package is just a starting point in the process of rebuilding our state’s economy, and of course tax relief is only part of the solution. We have other important initiatives as well.

  1. Improving Education For All Maryland children

Education is our top priority.

In our proposed budget, we spend more money on education than ever before. We fund K-12 education at record levels and have committed over $290 million to school construction.

And this is the first time in history that any administration has provided additional supplemental funding for education through GCEI in their first year.

We have some great schools here in Maryland, but the gap between the best and the worst schools is dramatic.

I believe that every child in Maryland deserves a world-class education, regardless of what neighborhood they grow up in. We must fix our under-performing schools while also giving parents and children realistic and better alternatives.

So, let’s expand families choices. Let’s encourage more public charter schools to open and operate in Maryland.

This month, our administration will submit legislation to strengthen Maryland’s charter school law. This legislation will expand choices for families and make it easier for more public charter schools to operate in Maryland.

Our administration will also push for the enactment of the “Building Opportunities for All Students and Teachers” legislation, also known as “BOAST.”

It provides tax credits to those who make voluntary contributions to private or parochial schools, and it will help free up more money and resources for our students in public schools.

This legislation has been debated in these chambers for more than a decade. The Senate has already voted to support it. We need to work to convince our colleagues in the House that it is the right thing to do.

  1. Protecting The Environment

A healthy Bay is key to a strong economy and high quality of life – for all Marylanders.  It will be a top priority of our administration.

Even after spending $15 billion in Maryland tax dollars, the health of our Chesapeake Bay has declined. Maryland just received a D+ on a recent report card.

This is just the latest indicator that our current strategy for protecting and restoring our greatest natural asset is failing. Our administration intends to reverse that trend.

It’s time for a new approach. We can, and we must do better.

We all agree on the problem: there’s too much phosphorous, nitrogen, and sediment entering our bay. We must take action to prevent as much of this pollution as possible from entering the bay.

However – restoration of our bay must not fall on one group disproportionately. Placing unreasonable burdens upon Maryland’s farmers will serve only to devastate more rural communities.

We will work with the agricultural and environmental communities to find fair and balanced solutions for limiting phosphorus. In addition, we will take a comprehensive approach to restoring our bay by addressing the long-ignored impact of upstream polluters, and the sediment spilling over the Conowingo Dam.

We will work with all stakeholders to come up with fresh, innovative solutions to protect and restore our greatest natural asset.

  1. Tackling Maryland’s Heroin Epidemic

As I travel throughout our state, I hear the devastating stories from our families and friends who hurt from the devastation heroin has wreaked on our communities.

Throughout Maryland, from our smallest town to our biggest city, it has become an epidemic, and it is destroying lives. I have tasked Lt. Governor Rutherford with bringing together all of the stakeholders in order to come up with a plan to tackle this emergency.

Later this month, we will execute an executive order to address this heroin epidemic.

  1. Campaign Finance And Election Reform

The strength of our democracy rests on a balanced, honest and open political process that challenges convention and encourages progress.

The Fair Campaign Financing Act for gubernatorial elections provides this balance and opens discord. It levels the playing field and holds our elected leaders accountable.

And while many said we would never elect a governor because of the low spending limits mandated in our public finance laws, I stand before you today as proof that the system does work.

We must replenish this fund as soon as possible and make it available for future candidates. Therefore, we will submit legislation to reinstate the voluntary check-off which allows a taxpayer to make a donation to go towards the public campaign financing system each year.

Finally, we need to address redistricting reform.

We have some of the most gerrymandered districts in the country – this is not a distinction that we should be proud of.

Gerrymandering is a form of political gamesmanship that stifles real political debate and deprives citizens of meaningful choices. Fair and competitive elections – and having checks and balances – make for a more vibrant and responsive citizen republic.

To advance this discussion, I will execute an executive order that creates a bipartisan commission to examine Maryland’s redistricting process with the goal of fully reforming this process and giving this authority to an independent, bipartisan commission.

Though this is an ambitious agenda, I believe that these actions will begin to put Maryland on a new path, one that leads to a new era of opportunity, and prosperity for all our citizens.

Though our visions may differ, our goals are the same: a better, stronger, cleaner, healthier, and more prosperous Maryland. We can’t accomplish these goals alone. We need your help, your ideas, and your support.

And while I’m sure we will disagree on a few points in the coming weeks, I am prepared to create an environment of trust and cooperation, one in which the best ideas rise to the top based upon their merit, regardless of which side of the political debate they come from.

So let us commit ourselves to that goal: to live up to our potential, to work together to solve the big problems with cooperation and good faith, for the sake of our children and grandchildren.

Let us renew our sense of optimism, and make Maryland a place of unlimited promise. Together, let’s change Maryland for the better.

Thank you, God bless you, and may God bless the great state of Maryland.

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Inaugural Address of Lawrence J. Hogan, Jr.

Governor Christie, thank you for being here, thanks for your tremendous support, and for that very kind introduction.

To my wife, Yumi, my daughters and my entire family, please know that it is because of your incredible love and support that I am able to stand here today.

I am privileged and proud to have Lt. Governor Boyd Rutherford by my side. He has been more than a running mate. He is a friend. I am honored to serve with him.

Governor O’Malley, thank you for your gracious cooperation during the transition and for your years of public service.

Lt. Governor Brown, thank you for your service, not only to the state, but to our nation.

To my good friends Governor Ehrlich and Lt. Governor Steele, thank you for your leadership. It was an honor to serve in your administration.

Governor Hughes and Governor Mandel, thank you for all you have done for Maryland.

Senate President Miller, Speaker Busch, and members of the Maryland General Assembly, we have great challenges ahead of us, but I look forward to working together with each and every one of you.

Comptroller Franchot, Treasurer Kopp, and Attorney General Frosh, Chief Judge Barbera and the other members of the judiciary, Senators Mikulski and Cardin and members of our Congressional Delegation, and all the local elected officials and other dignitaries, thank you all for being here for this historic occasion.

Most importantly, I want to thank the citizens from all across our state, who put aside party politics and who came together and voted to change Maryland for the better.

I’m grateful, because I know something about putting aside partisanship in order to do the right thing.

Forty years ago, a Maryland Congressman, a Republican, sat on the House Judiciary Committee during Watergate, and the entire world was watching.

Would this man be willing to buck his own party, his own president, to do what he thought was right for the country?

Despite tremendous pressure, this statesman put aside partisanship and made the tough decision, and became the first Republican to come out for the impeachment of President Nixon.

That man was my dad, former Congressman Lawrence J. Hogan, Sr., who is here with us today.

He put aside party politics and his own personal considerations in order to do the right thing for the nation.

He taught me more about integrity in one day than most men learn in a lifetime, and I am so proud to be his son.

Ladies and gentlemen, today, we are gathered in front of our beautiful state house, which has been in service since 1772.

A few steps from where I’m standing is where General George Washington resigned his commission.

Two hundred and thirty one years ago, the Revolutionary War ended right here, inside this state house, with the ratification of the Treaty of Paris in 1784.

And just a few miles away from here, when the future of a fledgling nation was in doubt, Francis Scott Key penned the Star Spangled Banner during the War of 1812.

For Maryland, and for our nation, this is a place where great things begin, and where great things are accomplished.

Today, against this historic and majestic backdrop, Maryland once again starts a new chapter in our long, proud history.

Today’s inauguration marks a new beginning for Maryland, and the limitless possibilities before us.

I am a lifelong Marylander who loves this state. Every great experience, every great memory, every great moment I have ever had in my life, has happened right here, in Maryland.

It is such an incredible honor to be standing before you today as the 62nd governor of the great state of Maryland.

I am truly humbled and deeply grateful for the opportunity to serve my fellow Marylanders, and I vow to work tirelessly every single day to prove worthy of this great honor that you have granted me.

Today, we celebrate a new beginning for Maryland, remembering our past, while striving for a better and more promising future.

The question isn’t whether Maryland is a great state. The question is: What will we do, all of us, to reinvigorate this great state that we all love? What will we do to ensure that our future is better than our present or our past?

I believe that the time has come to cast aside the status quo, and to come together to build a better future for our state and all our citizens.

We must set the bar higher, and create a bolder vision of the future.

Let’s create a Maryland that is thriving, growing, innovating, and is responsive to the needs of all its citizens. Let’s strive to make Maryland the best place in America to work, raise a family, start a business, and even to retire.

Let us renew our sense of optimism, and make Maryland a place of unlimited promise.

Together, let’s make Maryland a place that we can all be proud of again.

Today, I am reminded of those brave Marylanders who first came to this land seeking freedom and opportunity when they landed in St. Mary’s City in 1634.

While the challenges facing us today are different, I know that the courage and the spirit of Marylanders is the same.

We seek the freedom to compete without the undue burden of high taxes and bureaucratic regulations, which make us less competitive. We seek opportunities to build better communities, better businesses, and better lives for ourselves, our children, and our children’s children. And most of all, we cherish both the freedom and opportunity to decide our future.

And today, we celebrate that freedom and opportunity.

What I envision for Maryland is not just an economic and fiscal recovery, but a rebirth of our spirit, and a renewed commitment to our common purpose.

The citizens of Maryland expect great things from us, and they deserve great things from us.

Too often, we see wedge politics and petty rhetoric used to belittle our adversaries and inflame partisan divisions. But I believe that Maryland is better than this. Our history proves that we are better than this.

It is only when the partisan shouting stops that we can hear each other’s voices and concerns.

I am prepared to create an environment of trust and cooperation, where the best ideas rise to the top based upon their merit, regardless of which side of the political debate they come from.

No problem faces us that hard work, honesty, and courage cannot solve if we work together.

Ladies and gentlemen, we can improve the tone in Annapolis, and we will. And we can move toward a common-sense, solutions-based government. The problems we face are great, but so is our resolve to fix them.

President Kennedy once said, “Let us not seek the Republican answer, or the Democratic answer, but the right answer.”

In that spirit, let us sit down together and come up with real, bipartisan, common sense solutions to the serious problems that face us. That’s what the people of Maryland voted for, it’s what they want, and it’s what they deserve.

The history of our great state is rich and deep, and our commitment to freedom and justice has always been our strength.

In 1649, the Maryland Toleration Act, one of the first laws that granted different faiths the right to freely worship, was enacted. Since then, over the many years, Maryland has blossomed into a state wonderfully defined by our vibrant culture of racial, ethnic, and religious diversity.

In our hearts, Marylanders are hard-wired for inclusiveness. It’s who we are, it’s our founding principle, it’s part of our identity, and it is our greatest strength.

Our culture of tolerance and mutual respect must also extend to those with whom we happen to differ on politics.

Today is not the beginning of an era of divided government. Today is the beginning of a new spirit of bipartisan cooperation in Annapolis.

There is so much that unites us: a love of our state, a commitment to fairness, and a desire to be economically strong and successful.

And to those who would divide us, or drive us to the extremes of either political party, I remind you that Maryland has been called “a state of middle temperament.” Our politics need that middle temperament as well.

The politics that have divided our nation need not divide our state.

In the days ahead, I ask all Marylanders to seek that middle ground, where we can all stand together.

I recognize that the events of 2014 stirred strong feelings throughout the nation. But in keeping with the moderate tradition of Maryland, we expressed our passions in a positive, open, respectful, and civil way, as concerned neighbors.

It’s one of the many reasons I am proud to be a Marylander.

Our greatest challenge has always been reaching the high expectations set for us by our founders. That is why we will always keep trying, always keep growing, and why we shall never fail.

In the end, it isn’t about politics; it’s about citizenship, and the ability to understand the difference – that is what it means to be a Marylander.

Maryland’s greatness is in her goodness. Partisanship should never denigrate the unique legacy entrusted to us by our founders.

To all my friends across the aisle, I assure you that partisanship will never play a role in my decision-making. Everything we do will be guided by four common-sense principles.

First: Fiscal responsibility.

Our state government must provide essential services, yet still live within its means. We must run our state government more efficiently and more cost effectively.

Second: Economic growth.

Maryland has an educated workforce, world-class universities and colleges, great community colleges, and public schools.

We have our beautiful Chesapeake Bay, the Port of Baltimore, and a great location in the heart of the Mid-Atlantic region. We must leverage these amazing assets to transform Maryland into a place where businesses can flourish and create more jobs and opportunities for our citizens.

Starting today let me say loudly and clearly: Maryland is open for business.

Third: Reform.

We must improve our state government’s ability to be more responsive to, and to better serve and represent all of our citizens.

Fourth: Fairness.

We must restore a sense of fairness and balance for Maryland’s hardworking and beleaguered taxpayers, in order to rebuild our forgotten middle class.

We must get the state government off our backs, and out of our pockets, so that we can grow the private sector, put people back to work, and turn our economy around.

Ladies and gentlemen, we can accomplish these things, and together we will.

This is our chance to build a government that works for the people, and not the other way around.

To accomplish these objectives will require leadership. I’m not talking about any one leader. It will take many, all of us, working together, rolling up our sleeves, acting with mutual respect, and doing our jobs for the people of Maryland.

It will require listening, education, and bold actions. And it will take the courage to do things differently.

A commitment to doing things differently will be challenging. But it will be worth it. We’re worth it. And more importantly, Maryland is worth it.

One hundred years from now, I want Marylanders to say, “This was when Maryland’s renaissance began.”

Ladies and gentlemen, I stand before you today, full of hope, hope for our great state, hope for our people, and hope for our future.

I want Maryland’s future, to be brighter than it’s present, and brighter than it’s past.

It can be, and it will be.

Before my father cast his vote on the impeachment committee, 40 years ago, he quoted President Lincoln, who said, “We cannot escape history.”

And, we cannot escape our future – it’s out there, waiting for us.

Let us show our fellow Marylanders that government can work, that we can work together, that change is possible, and that Maryland can live up to the promise of our founders.

Let us always act worthy of the great task entrusted to us, to renew and advance our great state.

Let us appeal to the better angels of our nature so that we can achieve the great and shining promise of Maryland.

Ladies and gentlemen, we can change Maryland for the better. And together, we will.

Thank you, God bless you, and may God bless the great state of Maryland.

House Republican Caucus Mission Statement for the 2015 Legislative Session

In November of 2014, the citizens of Maryland made a choice to change the direction Maryland was headed.  In the 2015 legislative session, it is the goal of the House Republican Caucus to help usher in that change.

Maryland is a great state, but we have some significant problems to solve – the most immediate being the tremendous budget shortfall. These problems are not “Republican” or “Democrat” problems – they impact all of Maryland, and we need to work together to solve them.

Maryland’s government is spending too much money – taking too many dollars out of the pockets of taxpayers and expanding government in ways that are not sustainable. In the coming weeks, the Hogan Administration will be putting forth an agenda that will fix our State budget mess, and put Maryland on track to begin a roll back of the litany of taxes increased over the last eight years. This is the message voters sent to Annapolis and it is what our taxpayers deserve.

The House Republican Caucus is returning to Annapolis with a historic high of 50 members, all of whom are poised to help move the Hogan agenda through the General Assembly. Twenty-four of our members return to Annapolis with a breadth of experience fighting for smaller government and lower taxes. Our twenty-six freshmen members come to Annapolis with new ideas and energy and a commitment to get Maryland working again.

In the 2015 Legislative Session the opportunity is here to truly change Maryland for the better, and the members of the House Republican Caucus are ready to get to work.

House Republican Caucus Unanimously Re-Elects Kipke and Szeliga

House Republicans today unanimously re-elected Delegate Nic Kipke and Delegate Kathy Szeliga to serve as House Minority Leader and House Minority Whip. Delegates Kipke and Szeliga have served in these leadership rolls since 2013.

“I am tremendously honored to have the continued confidence of our Caucus,” said Delegate Kipke. “This term we have the highest number of Republicans serving in the House of Delegates in the history of our state. This is a vastly talented group of legislators and I am privileged to have this opportunity to serve with them. Maryland is a great state but we face some significant problems. Nic and KathyThese are not ‘Republican’ or ‘Democratic’ problems, they impact all of Maryland and we need to work together to solve them.”

“After the historic elections of 2014, our Caucus is excited and ready to get to work,” said Delegate Kathy Szeliga. “I look forward to working with all of them to move the Hogan Agenda through the General Assembly. We have the opportunity to truly change Maryland for the better, and we are ready to get to work.”

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House Republicans Urge Public Meeting on State Center Project

Annapolis, Md. – Today, House Republicans issued a letter to House Speaker Michael Busch urging him to convene a public meeting of the House Appropriations Committee to review the latest Department of Legislative Services (DLS) analysis of the State Center Project.

In a report issued last week, the most critical concerns raised were both the long-term and short-term General Fund costs of the project given the state’s significant structural deficits; the impact of the State Center project on Maryland’s debt limits; and, the lack of legislative oversight of the State Center project as a whole.

“Maryland’s budget outlook is already grim. Based on the information from DLS, the State Center project appears to be yet another bad deal for Maryland taxpayers. This is a burden that they – quite literally – cannot afford,” said House Minority Leader, Nicholaus Kipke. “Fortunately, in their analysis, DLS also laid out options that may allow us to free Maryland’s taxpayers from the ever-growing burden of this State Center Project. These options deserve the Administration’s and Legislature’s consideration.”

The O’Malley/Brown Administration is seeking approval from the Board of Public Works to approve the latest updates to the State Center Contracts at their meeting on December 17th. House Republicans are urging the Speaker to allow the House Appropriations Committee to join a Senate Budget & Taxation Committee meeting scheduled for December 9th, or schedule one of their own in advance of the Board of Public Works meeting later this month.

“As the O’Malley/Brown Administration begins their exit from Annapolis, we question the appropriateness of their efforts to push through this bad deal for Maryland’s taxpayers in the eleventh hour of their term,” said House Minority Whip Kathy Szeliga. “We would hope that in light of voters’ loud and clear message that state spending is out of control, they would not add to their legacy as irresponsible stewards of taxpayer dollars.”

Click here to download the letter sent to Speaker Busch.
Click here to download the analysis on the State Center Project provided by the Department of Legislative Services

For more background on the State Center Project, here’s a great read: MarylandReporter.com: State Center Boondoggle.

The Minority Report: End of Session 2014

Happy Sine Die! Below find a summary of some of the primary issues in the 2014 Legislative Session. For more details, click here for the full report.

BUDGET & TAXES

FY 2015 Budget Growth FinalOperating Budget. The FY2015 Budget increases spending by $2 billion dollars (6%) from last year’s budget and over $10 billion (37%) higher than the first O’Malley/Brown budget in 2007. The budget also robbed dollars from the pensions of Maryland’s employees and retirees to balance the budget.

The House Republican Caucus has a solid history of offering credible alternatives to the uncapped spending frenzy that has characterized the O’Malley/Brown Administration. Since 2007, we have offered a variety of alternatives that included zero growth, cuts, and slow growth. Few organizations in this state have done more work to fight against the reckless spending of the O’Malley/Brown Administration. Over the years it has often been like walking uphill through setting concrete, but our members know the taxpayers deserve more than what they have been given by the O’Malley/Brown Administration.

This year, our Caucus members offered a series of budget amendments to again reduce state spending and put Maryland on a path of fiscal responsibility.  Our amendments included an across-the-board cut of $364 million, which restored the dollars stolen away from Maryland’s pension fund, and left a fund balance of $186 million in unspent dollars to cushion against any revenue shortages.  Additional amendments offered to the budget would have cut spending even further. Delegate Justin Ready offered an amendment that would eliminate funding for Maryland’s Health Exchange, saving the taxpayers $72 million. Delegate Cathy Vitale offered an amendment eliminating the funding for the over-priced move of a state agency where the taxpayers were on the hook for millions just for new furniture. This saved the taxpayers $4.8 million. Delegate Mark Fisher offered an amendment to eliminate the controversial Film Tax Credit program, saving $7.5 million.Delegate Cluster offered an amendment to return the operation of the scandal-ridden Baltimore City Detention Center back to Baltimore City, the only local detention center operated by the State. Once fully implemented, this would save the taxpayers $140 million. Other members offered amendments to eliminate funding for things that state tax dollars just should not pay for. Delegates Aumann and O’Donnell offered amendments that would significantly curtail the tax dollars spent for Medicaid abortions. Delegate McDermott offered an amendment eliminating funding for ballistic fingerprinting and an amendment to direct Maryland’s Stem Cell funds only to projects involving adult stem cells. In total, our caucus amendments would have reduced spending by nearly $600 million, kept pension payments on track, and left a cushion if revenues fell short like they did earlier this year.

Capital Budget. As rapidly as state spending has grown over the last eight years, the growth in state debt has also been rather dramatic. While there are certainly many worthwhile, projects in the Capital budget, Maryland’s debt far exceeds the taxpayers’ ability to pay for it. There are many good projects in the Capital Budget, but many of them are outside the scope of how government should be spending taxpayer dollars. It is charitable giving with taxpayer dollars. It may feel good, but it is not the job of government.

Maryland’s debt payments, commonly called “debt service” are funded primarily by the revenue from the property tax; a revenue source which has flat-lined over the last several years due lower property values statewide. To cover shortages, Maryland has supplemented debt payments with dollars from the General Fund. But, Maryland’s General Fund is facing significant deficits in the coming years, and will not be able to cover these growing shortages. Without supplements from the General Fund, Maryland’s only other option would be to increase the state property tax. As much as a 70% increase in property taxes could be needed to cover Maryland’s debt payments. After more than 80 tax, fee, and toll increases over the last several years, another tax increase is NOT something our citizens can afford.

In many ways, what we do in the Capital Budget is like using our children’s credit cards. We run up debt in their names, reap the benefit of all the projects, and then we leave the responsibility of paying to future generations.

House Republican Tax Relief Plan. HB0326, The Income Tax Relief Act of 2014, was the House Republican’s signature tax relief proposal for the 2014 Session. Since the start of the O’Malley/Brown Administration there have been more than 80 tax, fee and toll increases, resulting in $8 billion in new revenue to the state, increasing each household’s tax bill by $4,000. HB0326 would have lowered the income tax rate by 10% over the next three years and brought much-needed tax relief for all taxpayers, regardless of their income. Unfortunately, the Democratic majority killed this bill and it never received a committee vote.

Estate Tax. After ten years of advocacy by the House Republican Caucus and Delegate Susan Krebs (Carroll), the House and Senate finally voted to loosen the grip of Maryland’s high Estate Tax. The bill recouples the tax with the federal exemption by 2018. Our members were pleased to see their Democratic colleagues coming around on this issue and finally realizing that Maryland’s tax climate is driving citizens and their resources out of this state. While our members believe in the complete elimination of death taxes, they supported any reduction that alleviates the crippling tax burden placed on Maryland’s citizens.

Corporate Income Tax. There were four separate corporate tax bills (HB0170, HB0330, HB0339, and HB0457) introduced this year which would have reduced the corporate tax rate from 8.25% to as little as 4%. Our members see the reduction of the corporate tax rate as good for Maryland. It encourages new corporations to come to Maryland and companies that are already here to invest more heavily in the state all the while creating new jobs for Marylanders. Unfortunately none of the bills made it out of committee.

RainTaxMapRain Tax. In 2012, Maryland lawmakers passed HB987 – The Stormwater Management-Watershed and Restoration Program, known today as the “Rain Tax”. The purpose of the legislation was to reduce the pollution levels in the Chesapeake Bay. Funding for the program was to come from taxing Marylanders on anything that prevented rain water from reaching the earth. Our members agree that the Chesapeake is one of the State’s greatest natural treasures and keeping it healthy is a laudable goal, however the Rain Tax is not the way to go about it. Given the disparate ways in which it is being implemented and the fiscal impact on our small businesses, churches and charitable organizations, the Republican Caucus introduced legislation that would have repealed or modified the tax. Unfortunately, the Democratic Speaker of the House Mike Busch declared that such legislation was dead on arrival. He was correct. The bill was referred to the House Environmental Matters Committee where it received an unfavorable vote. However, restricting the Rain Tax got a bit of new life during the budget negotiations between the House and the Senate, and in a bit of good news, Frederick and Carroll counties are now exempted from the Rain Tax.

 HEALTH CARE

Ctrl+Alt+DeleteHealth Care Exchange. One of the largest financial fiascos to hit the State in years is the Maryland Health Care Exchange. After spending $150 million on a computer system that didn’t work, wrangling more money out of the legislature to cover those individuals who were not able to sign up before the deadline and increasing the number of personnel in the call center from 100 to 400; the entire system will be scrapped. With less than a week in the Session, Governor O’Malley announced that Maryland will be transitioning to the Connecticut system. The cost? No one knows for certain, but an emergency contract for $50 million has been approved to pay the contractor that will handle the transition.

According to testimony earlier this month by Secretary Joshua Sharfstien, the chairman of the Maryland Health Benefit Exchange, 60,000 Marylanders have enrolled in qualified health plans since January 1. When you consider a Baltimore Sun report from November which stated that based on information from the Maryland Insurance Administration, approximately 73,000 policy holders around the state would be losing their health care coverage because of plans not grandfathered in under Obamacare, it seems that Maryland is actually losing ground.

It gets worse.

The Office of Legislative Audits issued a rather scathing report after their examination of Maryland’s Health Exchange. In the thousands of pages of documents turned over to the auditors, 26% of the documents were “heavily redacted”.

Thomas Barnickel, the Legislative Auditor wrote in his report “Generally we were unable to determine who the key decision makers were, and what decisions were attributable to them.”

Why the disaster? It started with Governor O’Malley’s rush to make Maryland the first state in the nation to implement Obamacare and ended with Lt. Governor Brown’s failure to properly oversee the construction and implementation of the exchange. Even more outrageous has been the Administration’s complete lack of accountability for the screw-ups, and Democratic leadership circling the wagons to protect Lt. Governor Brown from the political fallout.

EDUCATION

Common Core. Concerns about the transition to Common Core in Maryland’s public schools prompted several bills to slow down and even abandon it’s implementation.

HB1164 established a Work Group that would study and oversee the implementation of Common Core across the state. Delegate Pat McDonough (Baltimore County) attempted to amend the bill to include parent representation within the Work Group, but the amendment was defeated. A majority of our members supported the establishment of the workgroup.

Additionally, Delegate Ron George (Anne Arundel) submitted HB0925 that would have given each county the ability to set their own timeline for Common Core implementation. Despite being co-sponsored by many of our members, the bill died in the House Ways and Means Committee.

LEGAL MATTERS

“Bathroom Bill.” SB0212 – The Fairness for All Marylander’s Act of 2014, nicknamed the “BATHROOM BILL” passed the Senate by a vote of 32-15 and the House by a vote of 82-57. While the bill was advertised as a way to prevent discrimination against transgendered individuals, there were several unintended consequences of the bill that caused the Caucus to oppose it. The chief concern was with public facilities, specifically restrooms, locker rooms, dressing rooms, etc. that are traditionally designed for separate genders. There was nothing in the bill to prevent sex offender or some other person with nefarious intent from posing as a transgendered person just to gain access to such a private facility. Our members do not believe that because someone is transgendered it automatically means that they’re a sex offender. But, we do believe that people who prey on children would abuse this law and use it as another opportunity to gain access to children. The Caucus presented and supported several amendments that would eliminate these private facilities from the bill. Unfortunately all of the amendments were rejected.

Marijuana

Decriminalization. SB0364, that would decriminalize possession of “small” amounts of marijuana, was resurrected at the 11th hour of the 2014 Legislative Session. As passed, the bill makes the possession of 10 grams or less of marijuana a civil offense, like a parking ticket. Driving will impaired by marijuana would be prohibited. A first-time offender would pay a $100 fine, and second offenses would be $250 and $500, respectively. The House amended the bill to require offenders under 21 be evaluated and potentially referred to substance abuse counseling, and mandated a court appearance after the third offense for offenders under 21. While the bill was passed by the House and the Senate, it is still unclear if Governor O’Malley will sign it into law.

The majority of House Republicans opposed this bill because it sends a message, especially to young people, that drug use is OK. Amidst the current issues in our state with youth drug abuse, most of our members felt that this bill gives greater access to a known “gateway” drug and will be a step backwards in keeping Maryland’s kids away from controlled substances.

ELECTIONS

ballot boxPreventing Voter Fraud. HB1406, sponsored by House Minority Leader Nic Kipke (Anne Arundel) and Delegate Kathy Afzali (Frederick), HB1406 would increase the amount of time county boards of election must retain voter authority cards to 48 months. This would ensure that when investigating and prosecuting voter fraud, authorities would have a longer time to access the voter authority cards as evidence. This bill passed the House and the Senate and awaits Governor O’Malley’s signature to become law.

HB0212, The House unanimously passed a bill sponsored by Delegate Kathy Afzali (Frederick) that would make it easier for the State Board of Elections to remove the names of dead individuals from voter registration rolls by using federal Social Security Administration data to purge the rolls. It is estimated that there are as many as 20,000 such names on current rolls. The legislation would streamline the system and make it easier for these names to be removed. The bill’s crossfile in the Senate also passed and this measure awaits Governor O’Malley’s signature.

PUBLIC SAFETY

Baltimore City Detention Center. In the wake of the widespread scandal at the Baltimore City Detention Center in which nine correctional officers from the Baltimore City Correction Center were convicted of criminal activity, members of the House Republican Caucus introduced legislation to bring changes to the operation of the center. Both HB0081 and HB0084 would have prohibited individuals, as well as correctional officers, from distributing telephonic devices and accessories or contraband to individuals incarcerated at the Center failed in committee. However, HB962, which would require that the State begin to polygraph all correctional officer applicants in order to identify individuals with gang affiliations passed the House, but died in the Senate.

In addition, Delegate John Cluster (Baltimore County) also submitted legislation HB1274 to return ownership of the Baltimore City Detention Center to Baltimore City. This location is the only detention center in Maryland that is run by the State Department of Corrections. All others are operated by counties and/or local municipalities. Unfortunately, this bill was killed in committee. In addition, the Caucus also supported a budget amendment that would have removed state funding for the Baltimore City Detention Center to achieve the same goal. That amendment was defeated.

Speed Cameras. House Republicans unsuccessfully attempted to ban speed cameras with amendments to HB 929. And while we would like to see speed cameras completely eliminated in the State, many of our members supported measures that would reform the way speed cameras operate and give drivers more protections. The legislation raises the standards for speed camera vendors, ensures investigation of erroneous tickets and tightens the definition of a “school zone.”  Our members offered numerous amendments, including one by Delegate Steve Schuh (Anne Arundel) to completely eliminate speed cameras in Maryland and another by Delegate Kelly Schulz (Frederick) to ensure that cars with legislator license plates would receive the same treatment as those without and lawmakers would not receive special exemptions. In addition Delegate Justin Ready (Carroll) offered an amendment to only activate speed cameras in work zones when work was happening.

LABOR ISSUES

WhackMinimum Wage. Governor O’Malley’s signature legislative priority of the 2014 Session would raise Maryland’s minimum wage from $7.25 to $10.10 an hour (a 39% increase over the next three years). HB0295, passed the House despite House Republican efforts to lessen the negative impact of a minimum wage increase on Maryland’s low wage workers and employers, but unfortunately a majority of Democrats were more interested in furthering the Presidential ambitions of Governor O’Malley and election year politics than enacting policies that would actually create jobs and stimulate economic prosperity for low-wage workers. A minimum wage increase is effectively a job killer and job tax. A small victory form the House Economic Matters committee held the minimum wage for tipped workers at $3.63/hour.

After moving to the Senate, the minimum wage bill underwent the following significant changes:

  • Minimum wage will be increased incrementally and reach $10.10 by 2018
  • Wages for state-supported development disabled caregivers would increase by 3.5% annually through 2018.

 According to the Congressional Budget Office, a non-partisan analyst in Washington DC, raising the minimum wage to $10.10/hour will cost the nation half a million jobs. In Maryland, this extreme hike will cost our state nearly 12,000 much-needed jobs. The caucus supports helping the working poor through other alternatives such as the Earned Income Tax Credit and cut in the Income Tax Rate; but a minimum wage of this nature does nothing to help low-wage workers – it will put them on the unemployment line.

STATE GOVERNMENT

Legislator Salaries. The subject of automatic pay increases was a heated issue during the 2014 Legislative Session. Since the start of the Session, House Republicans attempted to force a vote to block automatic pay increases but were twice thwarted by the Democratic Majority who buried the resolutions in the House Rules Committee. A letter was also sent to House Speaker Michael Busch in February protesting the increases.

House Republicans oppose these pay increases because the job of a legislator is supposed to be a part-time. It’s a job you take for the honor of serving the public, not for a salary. Maryland has a citizen legislature and being a Delegate or Senator was never designed to be full-time employment. This pay increase becomes even more hypocritical as we learned last month that Maryland lost more than 10,000 jobs in February. The legislators that want to give themselves a raise are the same legislators that raised taxes, tolls and fees more than 80 times over the last 7 years and continue to promote policies that are costing Maryland much-needed jobs as citizens have to work even harder to make this state their home.

Legislative Transparency. The Caucus tried again to bring transparency to the legislative process when Delegate Michael Hough (Frederick) introduced HB0177. The bill would have required live and archived video of both Senate and House Sessions as well as each standing committee and voting session. Unfortunately efforts failed as the bill never made it out of committee.

 

 

News on Maryland’s Health Exchange Goes From BAD to WORSE

By applying a very complicated principle we like to call “basic math”, something quite literally does not add up when it comes to Maryland’s Health Exchange.

According to testimony yesterday by Secretary Joshua Sharfstien, the chairman of the Maryland Health Benefit Exchange, 60,000 Marylanders have enrolled in qualified health plans since January 1. When you consider a Baltimore Sun report from November which stated that based on information from the Maryland Insurance Administration, approximately 73,000 policy holders around the state would be losing their health care coverage because of plans not grandfathered in under Obamacare, it seems that Maryland is actually losing ground.

73,000-60,000 = 13,000

So, Maryland paid over $200 million in taxpayer dollars for 13,000 people to LOSE insurance?

That’s really bad. Unfortunately, it gets worse.

The Office of Legislative Audits issued a rather scathing report after their examination of Maryland’s Health Exchange. In the thousands of pages of documents turned over to the auditors, 26% of the documents were “heavily redacted”.

Thomas Barnickel, the Legislative Auditor wrote in his report “Generally we were unable to determine who the key decision makers were, and what decisions were attributable to them.” The full report is available here.

Anthony Brown was rather cavalier in March when he was asked about the looming federal investigation into the Health Care Exchange. But the results of the Maryland investigation prove that he should be, at least a little, concerned.

We’ve said repeatedly that the debacle of Maryland’s Health Exchange has been a failure of leadership. The reality is much, much worse. According to this audit there has been NO leadership from the O’Malley/Brown Administration, and the cost to the taxpayers continues to grow.