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Anne Arundel Budget Proposal to Include $3M in Property Tax Relief

Anne Arundel County Executive Steve Schuh today announced that his FY2019 budget proposal will include $3 million in property tax relief.

According to a press release:

We are committed to making our County an affordable place to live for our citizens,” said Schuh. “This tax relief proposal will ensure homeowners will not feel the sting rising property values as our economy continues to gain strength.”

Under the proposal, Anne Arundel County citizens would see their property taxes reduced by $1.5 million. Homeowners would see their property tax rate lowered to $0.902, which is $0.002 under the $0.904 projected property tax cap.

Public safety employees who live in the County would be able to obtain a $2,500 credit on their property taxes in addition to the proposed property tax rate cut. If enacted, the property tax cut would be the first below the tax cap in more than a decade.

The County Executive will present his full budget proposal on May 1st. The proposal is subject to County Council approval.

Read the full press release for more information.

SCOTUS on Online Sales Taxes? No Slam Dunk

Yesterday was not only a big tax day for federal income tax filers – it was also a big tax day for the Supreme Court, which heard oral arguments for South Dakota v. Wayfair – a much-followed case by state and local governments across the country which depend on sales tax revenue to fund their public services. The case sought to overturn Quill Corp. v. North Dakota. In Quill, the Supreme Court held that states cannot require retailers with no in-state physical presence to collect sales tax. The high court decided Quill in 1992, before internet sales became a commonplace occurrence.

In Direct Marketing Association v. Brohl, in 2015, Supreme Court Justice Kennedy stated that the “legal system should find an appropriate case for this court to reexamine Quill.”  Within a year, a number of state legislatures passed legislation in direct violation of Quill, requiring sales tax collection from internet sales platforms in some form or fashion.

The Maryland General Assembly considered similar legislation as recently as 2017 via the Main Street Fairness Act. This session, the Senate passed SB1025, Department of Legislative Services – Study – Sales and Use Tax Collection by Out-of-State Vendors, which would have required the Department of Legislative Services (DLS) to retain an independent consultant to study sales and use tax collections by out-of-state vendors. The bill never made it out of the Rules Committee in the House.

According to the State & Local Legal Center, South Dakota’s new law was the first ready for Supreme Court review.

Some thought that the case was a slam dunk for state and local governments which depend on sales tax. Unfortunately, yesterday’s line of questioning from the justices proved otherwise.

South Dakota Attorney General Marty Jackley, backed by the attorneys general from 42 other states, argued the case. According to SCOTUSblog, he was quickly peppered with questions.

Justice Sonia Sotomayor:

I’m concerned about the many unanswered questions that overturning precedents will create a massive amount of lawsuits about… How much contact is enough to justify placing this obligation on an out-of-town seller?…. What happens when the tax program breaks down, as it already has for the states who are using it, and merchants can’t keep track of who they’ve sold to?

Chief Justice John Roberts:

The suggestion in some of the briefs is that this is a problem that has peaked in the sense that the bigger e-commerce companies find themselves with physical presence in all 50 states. So they’re already covered. And the work-arounds that some of the states have employed are also bringing more [sellers] in. And if it is, in fact, a problem that is diminishing rather than expanding, why doesn’t that suggest that there [is] greater significance to the arguments that we should leave Quill in place?

Justice Elena Kagan:

From this court’s perspective, the choice is just binary. You either have the Quill rule or you don’t. But Congress is capable of crafting compromises and trying to figure out how to balance the wide range of interests involved here.

Justice Samuel Alito:

As things stand now, it seems that both the states and internet retailers have an incentive to ask for a congressional solution to this problem… There are incentives on both sides. But if Quill is overruled, what incentives do the states have to ask for any kind of congressional legislation?

Justice Ruth Bader Ginsburg came across more friendly to the tax collectors:

How about going back to the very basic issue? The assertion is that asking an out-of-state seller to collect tax on goods shipped in-state discriminates against interstate commerce. But, as I see it, why isn’t it, far from discriminating, equalizing sellers. That is, anyone who wants to sell in-state, whether an in-state shop, an out-of-state shop, everybody is treated to the same tax collection obligation. All who exploit an in-state market are subject to the in-state tax. Why isn’t that equalizing rather than discriminating?

Justice Stephen Breyer showed no cards:

When I read your briefs, I thought absolutely right. And then I read through the other briefs, and I thought absolutely right. And you cannot both be absolutely right.

Governing highlights other concerns expressed from the Justices:

They also raised concerns about whether states other than South Dakota would try to retroactively charge online retailers for the sales tax they didn’t impose in the past. Jackley said that 38 other states (of the 45 with sales taxes) have already asserted that they wouldn’t apply the taxes retroactively.

And several justices wondered whether Congress would be better equipped to deal with the issue, rather than the high court, because the federal lawmakers could better craft a nationwide scheme that would address many of the judges’ lingering concerns.

A decision is expected by late June 2018.

Harford Budget Proposal Holds the Line on Taxes, Makes Record Investments in Education & Public Safety

Harford County Executive’s proposed budget surpasses funding levels in public safety and education without raising taxes.

County Executive Barry Glassman has released a recommended county budget for fiscal year 2018 which includes no increase in tax rates yet provides record-level funding for public safety, education, and libraries, according to the County. The recommended budget also doubles funding to fight the opioid epidemic, increases school security measures, and invests a record $22 million to protect land from future development.

According to a Harford County press release:

“I began my term leading Harford County on a new path to fiscal balance and efficiency because I’ve always believed that if you want to lift someone up, you’ve got to be on higher ground,” County Executive Barry Glassman said. “While this path has not always been easy, it has allowed my administration to direct a total of nearly $38 million over the past four years toward reinstating salary increases for our teachers, law enforcement and dedicated county employees, without raising taxes. We have done all this at the same time we have restored our unassigned fund balance, maintained the county’s AAA bond rating and implemented the county’s first property tax credit for qualifying seniors and military retirees.”

Restoring Balance & Efficiency

  • No tax increases
  • 100% of new, ongoing FY 19 revenue dedicated to education and public safety
  • County government efficiencies help fund other operations
  • Unassigned fund balance more than doubled over the last three years
  • AAA bond rating lowers borrowing costs; rating maintained due to strong management and
    realistic Capital Improvement Program

Reinvesting in our Workforce

  • 2% COLA for all county employees plus a $2,000 merit-based increase to the base salary per
    qualifying employee
  • Equivalent increases for State’s Attorney and Circuit Court employees
  • Merit-based increase will have greater impact on lower-salaried workers
  • Funding equivalent to a 3% salary increase for Library employees; sets record-level funding for
  • Harford County Public Library
  • $2.8 million to fully fund the Sheriff’s Office’s request for salary increases; totals $5.3 million
    over the last two years
  • $122,472 for the new Sheriff’s Office Cadet Program

Investing in Education

Record-level funding continues for Harford County Public Schools:

  • $245,815,645 in FY 19 operating funds for HCPS; total increase of $7.1 million over FY 18
  • $6.4 million of the total increase dedicated to raising instructional salaries, continuing our support for teachers
  • $400,000 to Harford Community College for the county’s traditional 1/3 share of funding to
    support staff salary increases

Strengthening Communities

Preventing and treating opioid addiction:

  • County funding more than doubled to $610,000
  • Includes $250,000 toward the county’s first 24-hour crisis center for mental health &
    addiction
  • Historic-level funding for our first responders:
  • $6,964,084 Volunteer Fire Companies; represents a 3% increase over FY 2018
  • $3,546,668 EMS Foundation
  • $1,589,118 County EMS Service

Keeping our children safe in school:

  • $773,000 to expand existing School Resource Officer Program to remaining middle schools
  • $325,000 to fully fund requested school security camera upgrades
  • $100,000 ongoing annual funding to improve radio communications in schools

Agricultural preservation:

  • Record-level funding of $22 million from revenue dedicated to preserving agricultural land

Support for Community Organizations:

  • Harford County Humane Society
  • Harford Center
  • The Arc Northern Chesapeake

Read the full press release for more information.

State Proposes Spending $70M from Transportation Fund on P3

Tomorrow, Wednesday, April 18, the Board of Public Works considers granting an award of $68.5 million from the Transportation Trust Fund for the Maryland Department of Transportation (MDOT)’s Traffic Relief Plan, its massively-scaled public private partnership (P3). MDOT has selected a contractor team made up of Parsons, JMT, and HNTB to:

provide fully integrated support, guidance and oversight to the Maryland Department of Transportation State Highway Administration (MDOT SHA) Public-Private Partnership (P3) Office in delivering the I-495 and I-270 P3 “Traffic Relief Plan”.

Last September, Governor Hogan announced his Traffic Relief Plan to add four new lanes to I-270, the Capital Beltway (I-495), and the Baltimore-Washington Parkway (MD 295). The anticipated $9 billion plan for these three major state highways is touted to reduce congestion for millions of drivers.

At the time, MDOT indicated that it intended not to use the Transportation Trust Fund to pay for the ground-breaking public-private partnership (P3). In fact, the original Request for Information states:

The desire of MDOT would be that any private agreement not require a financial
contribution directly from the Maryland Transportation Trust Fund and that the
agreement would provide a concession payment to MDOT upon financial close.

However, the item on tomorrow’s Board agenda calls for 100 percent of the $68.5 million award to come from the Transportation Trust Fund. The Agenda Item suggests that the sum will, at some point, be paid back to the Trust Fund:

The scope of services will include developing and implementing a new and innovative P3 project delivery strategy driven by continuous market collaboration and feedback to ensure best value and that the I-495 and I-270 “Traffic Relief Plan” is delivered at a “net-zero” cost to the Transportation Trust Fund.

The winning team includes HNTB. Notably, MDOT Secretary Pete Rahn served as Senior Vice President of HNTB for five years before joining the Hogan Administration as Secretary of Transportation in 2015, according to The Daily Record (story behind firewall). According to that article, the Maryland State Ethics Commission has advised Secretary Rahn that no conflicts of interest exist with his active involvement in the P3 procurement and management.

Baltimore City Council Unifies Over Recordation Tax Increase

The Baltimore City Council is considering raising the City’s recordation and transfer taxes to pay for affordable housing.

By raising the City’s 1.5 percent transfer tax to 2.1 percent and the recordation tax from 1 percent to 1.4 percent, the Council hopes to generate approximately $20 million for an affordable housing trust fund approved by the voters in 2016. Currently, that fund has no dedicated funding source.

Every City Council member has signed onto City Council Bill 18-0221 as a sponsor or co-sponsor, including the President – suggesting that the bill has a strong chance of passage. Owner-occupied properties would be exempt from the tax increase; buyers of residential properties can be exempt if they attest in writing that they will live in the property for at least seven of the 12 months following the purchase.

The Baltimore Sun covers the story.

 

 

CEAM Spring Conference, May 2-4 – Registration Now Open

Join the County Engineers Association of Maryland (CEAM) for their spring conference in CEAM_ColorSolomon’s Island this year! This year’s conference is at the Holiday Inn Solomon’s  – Conference Center and Marina from Wednesday, May 2 to Friday, May 4.

Back by popular demand, the spring conference, once again, is extended to a multi-day format – complete with the opportunity to earn over 6 Professional Development Hours, learn about how the 2018 session affects public works professionals from MACo Associate Director Barbara Zektick, and network with other county engineers while boating and fishing for rockfish in the Chesapeake Bay and Patuxent River.

Learn more, peruse the agenda, and register online on CEAM’s website. For questions, contact CEAM 2nd Vice President and Conference Chairwoman Danielle L. Conrow, P.E.

Federal Court Strikes Down Maryland’s Generic Drug Price Protections

Baltimore Sun article (2018-04-13) reported that the 4th Circuit Court of Appeals in a 2-1 ruling has struck down a Maryland law regulating prices on generic drugs as violating the dormant commerce clause. The recently enacted law (HB 631 of 2017) was heavily supported by Maryland Attorney General Brian Frosh and was designed to protect consumers from rapidly increasing generic medicine costs. The law allowed the Office of the Attorney General to review generic drug prices and order price reductions or fines if the Office determined the prices increased too steeply without a valid reason.

The case was brought against Frosh and then-Maryland Secretary of Health Dennis Schrader by the Association for Accessible Medicines (AAM). The holding is the first of its kind and could chill the efforts of other states to address generic drug prices.

From the article:

“To be clear, we in no way mean to suggest that Maryland and other states cannot enact legislation meant to secure lower prescription drug prices for their citizens,” [majority opinion author Judge Stephanie Thacker] wrote. “Although we sympathize with the consumers affected by the prescription drug manufacturers’ conduct and with Maryland’s efforts to curtail prescription drug price gouging, we are constrained to apply the dormant commerce clause.” …

Judge James A. Wynn dissented from the majority opinion, saying the other judges had interpreted the commerce clause too broadly. Wynn wrote that their ruling would stop “Maryland from protecting its citizens against unconscionable pricing practices by out-of-state generic drug manufacturers.”

The article noted that Frosh is considering the State’s options, which include requesting an en banc review by all the 4th Circuit judges or appealing the case to the United States Supreme Court.

Useful Links

HB 631 of 2017

4th Circuit Court of Appeals Opinion – Association for Accessible Medicines v. Frosh, et al.

Maryland Congressman Proposes Comprehensive Federal Opioid Crisis Funding

Proposed CARE Act Funding: $4B to states; $2.7B for hard hit local governments; $1.8B for research; $1B for expanded services; $500M for naloxone; and $400M for CDC.

Maryland Representative Elijah Cummings in partnership with Senator Elizabeth Warren of Massachusetts is planning to introduce the Comprehensive Addiction Resources Emergency Act or CARE Act. Modeled after the 1990’s Ryan White Act, the CARE Act would provide $10 billion in annual federal funding to state and local government to tackle the opioid crisis.

As reported by The Baltimore Sun:

Cummings and Warren say the overdose epidemic must be dealt with in the same way the health crises of the past were. The Ryan White Act of 1990, they say, helped turn around the AIDS crisis and reduced deaths dramatically.

Cummings said he and Warren got the idea to fund a massive public health campaign against opioids from Baltimore Health Commissioner Dr. Leana Wen and her staff, who pitched the lawmakers on the need for increased funding.

“We have been calling for the same thing all along: Sustained funding,” Wen said. “It needs to be a proportional amount to the size of the epidemic. The funding needs to be given directly to the highest-need jurisdictions.”

Read the full article in The Baltimore Sun to learn more.

Baltimore County Passes “Oscar’s Law” to Protect Pets from Elements

The Baltimore County Council has unanimously passed “Oscar’s Law”, a bill that sets the conditions in which it is unsafe to leave animals outdoors. The bill was introduced following the death of a dog due to hypothermia after being left alone outside.

The Baltimore Sun reports:

Oscar’s Law defines “adverse environmental conditions” that are unsafe for animals to be left outside without shelter, including temperatures below 32 degrees or above 90 degrees, wind, rain, snow, ice, sleet, hail and exposure to direct sunlight or hot pavement. Under those conditions, pets would have to be brought inside within 30 minutes of the onset of those conditions.

Oscar’s Law also clarifies that either an animal control officer or a police officer can investigate animal cruelty cases.

The article notes that County Executive Kevin Kamenetz has announced the creation of a special police department unit that would manage cases of animal abuse.

For more information read:

Baltimore County Council OKs ‘Oscar’s Law,’ outlining unsafe outdoor conditions for animals (The Baltimore Sun)

Learn the Language of the General Assembly

Frederick News-Post article (2018-04-12) recounted the linguistic take-aways from a reporter covering Session for the first time. There are numerous coded phrases that those who participate in the legislative process hear regularly and understand but those outside of the process may not fully appreciate. The article summarized the reporter’s seven favorite phrases – here are two:

“It’s a simple bill.” This extremely common preamble to an explanation of a proposed law is designed to instill confidence in colleagues and signal something along the lines of “hey, let’s just pass this thing because it ain’t that complicated.”

“A second bite at the apple.” This fruit-themed phrase is often used to express humility when given the chance to speak twice or ask repeated questions on the same issue on the floor, as in “Thank you, Speaker, for allowing me a second bite at the apple.”

The article also briefly covered the increasingly contentious Frederick County Executive republican primary race between Frederick County Council Member Kirby Delauter and Maryland Delegate Kathy Afzali.