Senate Passes False Claims Act

With the “crossover” deadline looming, the Senate today passed SB 374, the Maryland False Claims Act. This bill would create a “whistleblower” system to catch fraud against both state and local governments. The bill was introduced at the request of Attorney General Brian Frosh, who spoke about the topic during his MACo visit earlier in the session.

MACo had testified in support of the bill.

See MACo’s testimony online.

See previous Conduit Street coverage of the False Claims Act.

Howard County Maintains its AAA Bond Rating

Howard County has maintained its AAA bond rating for the 18th year in a row.  AAA is the highest credit rating earned.

According to the Baltimore Sun,

Citing the county’s budget management practices and diverse tax base, all three top bond ratings agencies — Moody’s Investor Services, Standard & Poor’s and Fitch Ratings — awarded Howard a AAA rating.

Credit ratings assess the ability of a government or business to repay its debts. Howard is among 41 counties in the nation, out of more than 3,000, to earn the AAA rating from all three agencies.

The rating will also allow the county to issue debt for capital projects at favorable interest rates, according to a press release.

County Executive Allan Kittleman called the news “an affirmation” of the county’s “sound fiscal management, responsibility and strength.”

To read the full article on Howard County’s AAA bond rating, visit the Baltimore Sun online.

Register for NACo’s Annual Conference – July 10-13, 2015 – Charlotte, North Carolina

The National Association of Counties’ (NACo) Annual Conference is July 10-13, 2015 in Mecklenburg County/ Charlotte, North Carolina. Registration is OPEN!

naco conference logoNACo’s 80th Annual Conference and Exposition provides an opportunity for all county leaders and staff to learn, network and guide the direction of the association. The Annual Conference, held each July, is hosted by a NACo member county.

This year, the conference will be held in Mecklenburg County, (Charlotte) North Carolina. The Annual Conference provides county officials with a great opportunity to vote on NACo’s policies related to federal legislation and regulation; elect officers; network with colleagues; learn about innovative county programs; find out about issues impacting counties across the country; and view products and services from participating companies and exhibitors.​

Visit NACo’s website for more information on the Annual Conference.

House Committee Votes Down Bill Requiring Professional Engineering Sign-Offs

The House Economic Matters Committee voted unfavorably on HB 752 which would have required professional engineers to review government engineering documents, as opposed to the current norm of using educated and experienced unlicensed engineers or technical staff. MACo opposed this bill as it would be costly and unnecessary for local governments.

From MACo’s written testimony:

This bill has substantial and costly impacts on the operation of local governments. Counties employ engineers for a wide-range of projects, including code compliance, zoning ordinance requirements, and road and sewer work projects. The majority of review staff are unlicensed engineers who work effectively and safely under the supervision of professional engineers. These engineers are hardworking and qualified with the requisite skills to perform their duties, though they are not professional engineers.

The cross-file SB 738 was heard in the Senate Education, Health and Environmental Affairs Committee on March 18, 2015. The Committee has not taken action on the bill.

For more on MACo’s 2015 legislation, visit the legislative database.

Former MD Transportation Secretary Jim Smith Returns to Law Firm

Former Maryland Department of Transportation Secretary and Baltimore County Executive Jim Smith returns to his old law firm: Smith, Gildea & Schmidt, LLC.

jim smith
James T. Smith, Jr., Courtesy of Maryland State Archives

According to Smith, Gildea & Schmidt’s website,

Smith is now of counsel to Smith, Gildea & Schmidt, a Towson-based firm that handles civil litigation, land-use law, business law, government affairs and other cases.

Smith, 73, served as the state’s secretary of transportation from 2013 through the beginning of Gov. Larry Hogan’s administration this year.

Smith, a Democrat, also was Baltimore County executive from 2002 through 2010, was a Baltimore County Circuit Court judge from 1985 through 2001 and served on the County Council from 1978 through 1985.

This is Smith’s second stint at the law firm. He previously worked there from 2011 through 2013. In rejoining the firm, Smith will be working with his son, Michael Paul Smith, who is a partner in the firm.

“We’ve got a great team of talented, hard-working young people, and it’s really satisfying for me to work with my son and his colleagues,” Smith said in a statement.

House Committee Votes Down Bill Undermining Local Tax Collections

The House Environment and Transportation Committee voted down HB 366, which would have changed the definition of “tax” to exclude liens against real property for unpaid water and sewer charges, and prohibit Baltimore City from selling a property at tax sale just for these charges. MACo opposed this legislation due to the severe statewide consequences as changing the definition of “tax” would undermine tax collections in all local jurisdictions.

From MACo’s ,

Should this bill pass, Baltimore City would be able to enforce a lien for unpaid water and sewer bills as long as the property was being sold to enforce another lien, but the remaining 23 counties would be totally unable to collect unpaid water and sewer bills through the tax sale process.

The tax sale process, or more specifically the potential for a property to go to tax sale, presents a much-needed device to ensure that property owners remit payment for their fair share of taxes and charges connected to public services. HB 366 removes this leverage for Baltimore City and the 23 counties, and undoubtedly would create many more deficient accounts for water and sewer bills from lack of enforcement – leading to increased rates on citizens who properly pay.

For more on MACo’s 2015 legislation, visit the legislative database.

Carroll County Projecting Shortfall For FY 2016

As Carroll County Commissioners begin their discussions on the fiscal 2016 budget, budget officials are projecting a shortfall between revenues and expenditures, potentially affecting funds for the school system and nonprofits.  As reported by the Carroll County Times,

Even with an additional $10 million more in revenue projected in the upcoming fiscal year compared to the last one, Carroll government may still not have enough money to fully fund the public school system’s budget request or flat-fund nonprofits it supports.

The county’s eight primary revenue sources are expected to bring in $338.8 million during Fiscal Year 2016, compared to $328.9 million in the current year, said Ted Zaleski, director of the Department of Management and Budget. Fiscal Year 2016 begins July 1, 2015. Speaking during the Carroll County Board of Commissioners meeting Thursday, he said he and his staff are also forecasting revenue growth for fiscal years 2017 through 2021, however this growth is “modest and uncertain.”

The school system’s budget calls for $175.8 million to come from county funds, although county budget officials have estimated a lower amount.

County staff’s recommended budget for Carroll County Public Schools for FY16 is $161.95 million; $50,000 less than what the school system received in the current fiscal year and $13.85 million less than the school board’s request this year.

The school board’s original budget had anticipated a decrease in state funding because of a decline in enrollment.

Unbudgeted items are also placing pressure on the county’s longer term budget plan.

As part of the yearly budget process, county staff also made forecasts for the next five years. Several budget changes arose during the past year that will need to be included in FY16 that were not accounted for in the approved FY16-21 Operating Plan last year, including a new transportation contract with Butler Medical, a budget increase for the Carroll County Detention Center to accommodate overcrowding, rent for the state’s attorney’s office, and a new voting system.

Senate and House Committees Vote Down Safety Plan Legislation

The Senate Finance Committee and the House Economic Matters Committee voted down their respective bills, SB 279 / HB 404, which would have required a prospective bidder or offeror for a public works project over $100,000 to submit a public safety plan and an attestation that the plan meets certain requirements as part of the procurement process. The bill also requires the Department of Labor, Licensing, and Regulation (DLLR) to develop a safety and health calculation worksheet and rating system, and enforce the bills’ many new requirements.

MACo supported the bills with amendments to increase the threshold to $1 million to better target higher risk projects and lessen the effect on smaller contractors, remove a requirement that a safety plan be submitted to a procurement official as part of the selection process, clarify that the completion of the safety questionnaire and additional safety measures do not impede work on a project; and protect local jurisdictions from any deficiencies in safety plans or safety-related issues that may occur at a worksite.

A Finance Committee workgroup was appointed to work through concerns and amendments offered on the bill, and MACo’s amendments were accepted. However, members still had reservations.

The Finance Committee voted the bill unfavorable 6 – 3, with 2 members excused.

The Economic Matters Committee unanimously voted the bill unfavorable.

House and Senate Agree on Actions to Restore Funding to Local Governments

As previously posted on Conduit Street, the House of Delegates gave final approval to its budget plan last night in a 129 – 10 vote and the Senate Budget and Taxation Committee unanimously adopted its budget plan with only modest changes from the House. Senate debate on the budget will take place next week and any differences will be resolved by a House and Senate Conference Committee.

Agreed upon actions of both bodies restores funding for local governments. Actions affecting local governments are summarized below.

Budget Category Proposed Budget House Action Senate Action
Education Aid Reduces funding for education by $76 million – freezes the per pupil amount at the FY 2015 level of $6,860 and delays the implementation of the phased-in change for the calculation of wealth in the education formula by one year.Geographic Cost of Education Index (GCEI) is cut in half – an approximate $64 million reduction Restores $130 million – rejected the Governor’s proposal to freeze per pupil funding in the education formula and cap out-year growth at 1%; identified $68 million to restore GCEI;

Agreed to extend the phase-in of a wealth measure used in the funding formula – reduction of approximately $13 million.

Concurred with House funding restoration; Altered formula to provide out-year growth of 1.5% from FY 17 – FY 20.

Concurred with House Action

Community Colleges Reduces funding by $13 million by modifying the community college aid formula Restores $4 million in funding and applies a hold harmless grant to ensure no community college receives less than the prior year Concurred with the House Action
Libraries Extends the time for phasing-in the increase in the per-resident amount from 5 to 10 years; Per-resident amount increases from $14.00 to $14.27 instead of $15.00 in FY 2016 Agreed to the extend the per pupil phase-in – an approximate $2.3 million reduction Concurred with the House Action
Transportation Supplemental Budget provides $25 million for local transportation funding – $4 million counties; $19 million municipalities; $2 million Baltimore City Approved supplemental funding, remains intact Concurred with the House Action
Local Health Departments Funding is being reduced to the FY 2014 level of $41.7 million for FY 2015 and FY 2016 Restores $3.9 million for local health departments in FY 2016 Concurred with the House Action
Police Aid Funding is being reduced to the FY 2014 level of $67.3 million for FY 2015 and 2016Department of Legislative Services (DLS) recommended an additional $25 million reduction Police aid remains funded at $67.3 millionCommittee rejected the DLS recommendation Concurred with the House Action
Disparity Grant Funding is being reduced and capped at the FY 2014 level of $127.7 million Program is funded at current law $129.8 million, restoring $2.1 million; Administration to offer amendment to clarify funding cap and how it affects the funding level for each jurisdiction Funds the program at the level proposed in the Governor’s budget, $127.7 million and adopted language for each eligible county to receive the lesser amount of what that county received in FY 2014 or what it would receive under current in FY 2016
Program Open Space Deletes a statutorily scheduled $50m repayment of Program Open Space funds diverted in past years, and redirecting some funding from the state transfer tax to the general fund, instead of POS and related programs statutorily receiving those funds Transfers $12.8 million in Program Open Space funding to the General Fund in FY 2016; Transfers the unencumbered fund balance of $10.5 million to the General Fund in FY 2015; Delays the $50 million statutory repayment to FY 2019 Concurred with the House Action
Park Lands – Payment in Lieu of Taxes Eliminates payments to counties from State Park revenues for FY 2015 and 2016 Modified reduction to $2.2 million restoring $235,000 for Garrett County Modified the House action to make the $235,000 restoration contingent on the passage of SB 134 or HB 1091 and restores the entire payment in lieu of taxes amount, $2.4 million, if the legislation fails
Video lottery terminal local impact grants Maintains $7.85 million (FY 2015 – $4,073,964 and FY 2016 – $3,887,697) that would otherwise be allocated as local impact grants within the Education Trust Fund Rejected transfer of funds to the Education Trust Fund, keeping local impact grants intact Concurred with the House Action
Local Income Tax Reserve Fund Transfers $100 million from the local income tax reserve fund to the General Fund requiring the State to repay the transfer Adopted transfer with State  repayment of $10 million a year beginning in FY 2016 Concurred with the House Action
Freeze on Mandatory Spending Caps funding increases for statutorily mandated programs beginning in FY 2017 to a percentage increase in General Fund revenues as determined by the Board of Public Works Rejected language to permanently cap the growth in statutorily mandated funding formulas Concurred with the House Action

Stormwater Fee Poll Finds Voter Misunderstanding Key Impediment to Support

On March 13, OpinionWorks LLC released the results of a poll requested by the Clean Water Healthy Families Coalition that looked at voter attitudes about the 2012 legislation mandating 10 counties adopt a stormwater remediation fee (also known as the “rain tax” by the fee’s opponents).  Here are the major poll findings from the results:

This statewide poll identifies an overwhelming lack of public understanding of the stormwater remediation fee, which some have called the “rain tax.” The poll finds that inaccurate understandings of the fee have greatly elevated opposition. But when facts are presented, a plurality of 46% support the fee, and opposition drops to only about one-third (35%) of voters.

These are the major poll findings:

  • An overwhelming majority of voters (84%) believe the problem of water pollution can be fixed, but only 39% believe their local jurisdiction has the resources it needs to tackle water pollution locally.
  • A 50% majority of voters would support a reasonable local fee dedicated to the problem of water pollution, including a number of people who think other local taxes are too high.
  • Three-quarters of voters (75%) could not even guess how much they expect their local stormwater fee or “rain tax” to be. Of those who did offer a guess, most guessed too high.
  • Only 24% of voters think the term “rain tax” is the more accurate term for this fee.
  • Fifty percent of Maryland’s voters incorrectly think people will be taxed when it rains. Many voters are not sure, leaving only 29% who know they will not be taxed when it rains.
  • Initially, just based on what they have read or heard, 40% said they oppose this tax, 23% said they support it, and 26% had no feelings either way. The rest were unsure.
  • But those who believe “rain tax” is the more accurate term oppose it by 67% to 11%. Meanwhile, those who felt that “stormwater fee” was the more accurate name support it by 40% to 21%.
  • The major finding of this poll is the impact of information: With some facts, opposition to this fee fell to only one-third (35%) of voters, support doubled to 46%, and 11% said they had no feelings about it either way.
  • If voters believe this fee will be effective at reducing pollution, support rises even higher.

The poll questioned 594 people from the period of February 26 to March 15, 2015.