Shortcut image

Legislative Issues: End of Session Wrap-Ups | MACo Initiatives | Bill Tracking | MACo Testimony | Issue Papers |
Committee Schedule

Hot Topics: Local Infrastructure Fast Track (LIFT4MD) | Transportation Scorecard | Justice Reforms | County Budgets | Education | Land Use | Transportation | OPEN MEETINGS ACT

Important Documents/Links: MD General Assembly
| MACo Testimony Summary | Budgets & Tax Rates
| Salary Survey | Local Finances | Spending Affordability

FY2018 Budget/Fiscal Links: County Effects | Fiscal Briefing | Two Year Charts | Overview of State Aid | County Revenue Outlook | Local Government Finances & Demographics

MACo Summer Conference: Register | View Schedule | #MACoCon | Hotels | More Info

What’s Going On With Tax Reform? Part 2

Last week, in the blog post, What’s Going On With Tax Reform? Part 1, I mentioned that the U.S. House of Representatives could potentially see draft tax reform legislation as early as this week. One of two potential changes under consideration could mean serious consequences for Marylanders and their counties: elimination of the deductibility of state and local taxes (SALT) from individual federal income tax payments.

What Is SALT? 

The state and local tax deduction allows taxpayers to deduct state and local taxes paid from their federally taxable income. Deductibility of these taxes prevents double taxation, since state and local taxes are mandatory payments.

In 2015, at least 95.8 percent of all itemizers took the SALT deduction. That tax year, over 36 million individuals and families making less than $200,000 claimed the deduction.

The SALT deduction has existed since 1913, when the original federal tax code came to be, with its grand total of three pages.

This one-pager sums it up well.

Americans Against Double Taxation

dkl_aeqxoaawa77

The National Association of Counties (NACo) has joined 20 other organizations, including the National Governors Association, National League of Cities, U.S. Conference of Mayors, Government Finance Officers Association (GFOA), and a wide range of other trade associations representing realtors, firefighters, government employees, educational institutions and more to fight against elimination of the SALT deduction. They call their coalition the Americans Against Double Taxation.

From their Coalition Announcement Letter:

We, the undersigned organizations, urge you to maintain the deductibility of state and local taxes in any comprehensive tax reform legislation. …

Eliminating or capping federal deductibility for state and local property, sales and income taxes would represent double taxation on local residents … Elimination would effectively increase marginal tax rates for certain taxpayers, shrink disposable income and harm housing markets, damaging the U.S. and local economies. Finally, any alterations to the deduction would upset the carefully balanced fiscal federalism that has existed since the permanent create of the federal income tax over 100 years ago.

Discussing the potential for release of more details on potential tax reform this Wednesday, Treasury Secretary Steven Mnuchin told CNN last Sunday:

We’re getting rid of lots of deductions. We’re trying to get rid of state and local deductions to get the federal government out of subsidizing it and yes I can tell you the current plan, for many, many people — it will not reduce taxes on the high end.

Americans Against Double Taxation responded:

Secretary Mnuchin’s comments on the state and local tax deduction (SALT) today are 100% wrong and backwards. SALT protects state and local governments and 44 million taxpayers from exactly the kind of federal money grab the Administration  appears to be proposing. Indeed, SALT was incorporated in the emergency Civil War tax in 1862 and was one of only six deductions in the first federal income tax in 1913, where it has remained ever since, in order to guard against what Hamilton warned in the Federalist Papers could be a ‘federal monopoly, to the entire exclusion and destruction of the State governments.’

What SALT Means In Maryland

Elimination of the SALT deduction would impact Marylanders more than the residents in any other state, according to the GFOA in The Impact of Eliminating the State and Local Tax Deduction Report.  According to the report, 45 percent of taxpayers in Maryland currently benefit from the deduction, more than any other state. The average SALT deduction in Maryland is $5,604. Read more in the post, Local Tax Deduction Elimination: “SALT” In Maryland’s Wounds.

Find data on the SALT deduction for your county here.

This is part of a blog series on federal tax reform. Here’s Part 1.

Unused Hotel Toiletries Donated to Community Assistance Network #MACoCon

CAN Donation
Gail, Megan Goffney, Ethan Hunt, Nicolette Querry, Nick Blendy

Unused hotel toiletries, collected from MACo’s 2017 Summer Conference, were donated Friday, Sept. 22 to the Westside Men’s Emergency Shelter in Baltimore County, a shelter program that is part of the Community Assistance Network.

Present were Ethan Hunt and Nick Blendy, Baltimore County staff representing Kevin Kamenetz, former MACo board president. Additionally present were, CAN Director of Homeless & Housing Services Megan Goffney, Gail, and MACo Outreach Coordinator Nicolette Querry.

In 2003, CAN’s homeless shelters partnered with Baltimore County to extend the vision of freezing weather shelters into an overnight emergency shelter program with the intent to eventually operate them year-round. This included both the Eastside Family Emergency Shelter, a 125 bed facility, located in Rosedale, and the Westside Men’s Emergency Shelter, a 154 bed facility, located in Catonsville. 

-CAN Website

 

Governor Moves MDP Secretary Peters Into Smart Growth Job

Wendi Peters (right), joins MDE Secretary Grumbles and Governor Hogan at an announcement on the Conowingo Dam (courtesy of MyEasternShoreMD)
Governor Hogan has moved Acting Secretary of Planning Wendi Peters into a new role, as a state coordinator of Smart Growth efforts. The move, into a position that does not require Senate confirmation, provides at least a temporary respite in an ongoing struggle between the executive and legislative branches over the Governor’s appointment authority. Ms. Peters had been serving without pay since July due to a dispute over the propriety of her continued appointment.

From coverage in the Baltimore Sun:

Hogan spokesman Doug Mayer said Friday that Planning Secretary Wendi Peters, whose pay was cut off July 1 in a tug-of-war between the governor and the General Assembly, was reassigned as special secretary for smart growth.

Unlike the planning secretary job, Peters’ new role does not require Senate confirmation. The Senate refused to confirm Peters’ nomination to the planning role this spring amid complaints from Democratic leaders that she was unqualified and had mismanaged the department while serving as acting secretary.

Mayer said Peters would continue to attend Hogan’s Cabinet meetings in her new role.

MACo’s Weekly County News & Notes… from Twitter

The social media site Twitter has become a fast-moving setting for news, information, and advocacy on public affairs. We welcome followers of MACo’s own Twitter feed for updates from the Conduit Street blog and other MACo hot topics, and often use Twitter to reach our own audience, and to hear from others following the same issues as county leaders.

Here are some tweets that caught our eye this week:

 

 

 

 

 

Follow MACo
Follow Executive Director Michael Sanderson
Follow NACo
See Tweets on #mdpolitics

MACo Agenda: 2018 Initiatives, Growth Plan, and School Funding

MACo 1st VP and Acting President Jerry Walker presides over a Legislative Committee meeting in Annapolis
MACo’s offices will be abuzz on September 27, as the Legislative Committee will meet at 11am, and an ad hoc discussion on school funding will follow in the afternoon.

The 11am meeting of the Legislative Committee involves designees from each jurisdiction, selected to represent their county. County officials, both elected and appointed, are welcome to attend the discussion as well. The Committee will receive an update from Matthew Rowe of the Maryland Department of Environment, on the efforts toward a new “Aligning for Growth” policy, designed to incorporate water pollution generated by new development into the State’s Phase III Watershed Implementation Plan.

The Legislative Committee will also hear a final report and presentation from the 2018 Initiatives Committee, and is scheduled to adopt a slate of legislative initiatives for the 2018 legislative session. The MACo policy staff will offer updates on issues developing over the “interim” months, as multiple work groups and task forces have been progressing on topics relevant to counties.

Following the Legislative Committee and our ever-popular lunch, county leaders are invited to join a “deep dive” discussion to catch up on public school funding issues. The Kirwan Commission has been meeting regularly through the Summer months, and has recently sharpened its focus on financing issues — including the pattern and role of county funding. This opt-in discussion will position county leaders for continued engagement on this major topic as the Commission points toward the coming session for legislative recommendations.

If you have questions about either the Legislative Committee meeting or the school funding discussion, contact Michael Sanderson at MACo.

MACo & MML Submit Joint Comments on Public Information Act Concerns

MACo and the Maryland Municipal League (MML) submitted an extensive joint comment letter (2017-09-15) in response to a series of preliminary findings and potential recommendations found in an interim report on the Maryland Public Information Act (PIA) by the Office of the Attorney General (OAG). The interim report summarized the results of a PIA survey of both record custodians and requestors and offered possible recommendations on: (1) the scope and enforcement authority of the PIA Compliance Board; (2) merging the PIA Compliance Board with the Open Meetings Compliance Board; (3) altering the role of the Public Access Ombudsman; (4) adding further statutory requirements for indigency and fee waiver decisions; (5) requiring third-party governmental contractor records to be disclosable under the PIA; (6) limiting or prohibiting PIA requests for purely commercial purposes; (7) modifying various other aspects of the PIA.

The interim report and a final report due in December of 2017 are required by the sweeping PIA reform legislation passed in 2015 (HB 755/SB 695). Several highlights from the MACo/MML comment letter:

Preliminary Findings

1. The PIA Compliance Board should retain its formal neutrality and the functions of both the Board and Public Access Ombudsman should not be altered.

MACo and MML support the preliminary finding that the PIA Compliance Board should remain formally neutral and that it is too early in the Board’s existence to alter the Board’s jurisdiction or statutory responsibilities. From a local government perspective, the Board must meet two criteria in order to be viewed as credible: (1) the Board maintains an overall neutral position between custodians and requesters; and (2) the Board’s preemptive authority rests within a narrow and well-defined jurisdiction that addresses significant PIA issues. To date, we believe the Board has achieved these goals and further changes would only risk upsetting the Board’s positive perception and ability to function.

MACo and MML also support the role of the Public Access Ombudsman (currently Lisa Kershner) in mediating PIA disputes between custodians and requesters. When there are differences between a custodian and a requester over a PIA issue, a neutral party such as the Ombudsman can help mediate a solution. However, if the Ombudsman is given binding authority, the perception of the Ombudsman shifts from that of an assisting mediator to that of a regulator or judge and the position loses effectiveness in reaching solutions. Instead, the Ombudsman simply becomes the first stop in the litigation process and as such must provide full due process protections. We believe the Ombudsman position is most effective if left in its current form. …

4. Agencies should be provided a level of funding sufficient to centralize responsibility for PIA compliance in one or more employees whose job performance would be evaluated principally on that basis.

MACo and MML support local government compliance with the PIA but are concerned this recommendation fails to account for the dramatic differences in size, capability, and resources of local governments. Such a recommendation would be difficult or impossible for small counties and municipalities to implement. Some smaller counties can only afford to hire a single county attorney to cover every single legal issue the county faces. Many local governments do not even have in-house counsel and use outside counsel as needed. The personnel issue is even more acute for small municipalities whose entire paid staff may encompass one or two people.

Likewise, larger counties and municipalities may have data spread across a wide number of departments and the sheer number of PIA requests may limit the ability to channel those requests through a single or even several employees. Moreover, in a larger jurisdiction, a centralized record custodian may result in another level of separation between the attorneys that respond to requests and the actual government employee that knows where responsive documents are located and has the specialized knowledge about the content of the record that informs the basis for evaluating if an exemption applies.

Local differences are further exacerbated by the fact that different local government types require different organizational structures. In short, local governments are not uniform and funding or organizational mandates regarding PIA requests would be impractical and likely inequitable.

Potential Recommendations

1. Whether the PIA Compliance Board’s jurisdiction should be expanded by lowering the threshold for complaints from $350 to $250 and by giving it jurisdiction over complaints about agency fee waiver decisions.

MACo and MML strongly oppose lowering the PIA Compliance Board’s “unreasonable” fee complaint threshold from $350 to $250 and giving the Board jurisdiction over fee waiver decisions. The complaint threshold was subject to significant debate during the passage of Chapter 135 of 2015 (HB 755/SB 695), which substantially overhauled and revised the PIA. Altering the threshold would upset the policy balance that the legislation established between local autonomy and potential preemption by the Board.

Chapter 135 added greater specificity in how local governments must calculate their fees, minimizing the risk of a fee being “unreasonable” for information requests under $350. The current $350 threshold captures the larger and more complex information requests where there is greater likelihood to be a difference of opinion between the custodian and the requester as to the time, resources, and costs needed to address the request.

Regarding fee waiver decisions, we share the Interim Report’s concerns that the Ombudsman has been successful in mediating fee waiver denials and moving that responsibility to the Board itself would significantly increase the Board’s workload. Such an action would create an unnecessary local government preemption.

5. Whether the PIA should be amended to make the records of all third-party government contractors subject to the Act.

MACo and MML agree with the concerns raised by the Interim Report and do not believe “one size fits all” legislation can adequately address this issue. As the Interim Report correctly states, there are existing mechanisms for gaining some third-party contractor records under the PIA or other law but that the inquiry is often fact-specific, dependent on the existing contracts and software licenses, and not easily addressed by a “bright line” rule. Requiring all contractors to make more information publicly available may also reduce the pool of companies willing to bid on government work and increase the cost the government is charged for those services. At a minimum, further evaluation of this recommendation is needed before any consideration of its adoption.

MACo and MML also offered three additional potential recommendations in the comment letter relating to (1) personal surveillance cameras; (2) email addresses and cell phone numbers used for subscriptions or notifications; and (3) release of social security numbers and dates of birth:

PIA Reform for Personal Surveillance Cameras

While Chapter 135 addressed many longstanding issues with the PIA, several issues have emerged since the passage of Chapter 135 that MACo and MML believe require addressing. Foremost among these is the release of video footage from personal surveillance cameras, which can include body cameras used by first responders or other local government officials and cameras on drones or mobile robots that follow such individuals. MACo has previously developed criteria for when such footage should be released under the PIA in a manner that: (1) maintains local government accountability; (2) protects the privacy rights of vulnerable populations; and (3) addresses local government fiscal and technological concerns. Such a policy is needed to encourage further adoption of these technologies as well as balance valid transparency and privacy interests.

PIA Reform for Email Addresses and Cell Phone Numbers Used For Subscriptions or Notifications

Additionally, there have been recent concerns about PIA requests for email addresses or cell phone numbers of individuals who have signed up to passively receive news, updates, or notifications from a local government. Requests for these email addresses have been driven by commercial or political considerations and could subject individuals, including children and the elderly, to unwanted solicitations and communications, cyber security attacks, and identity theft risks. Allowing PIA disclosure of these email addresses or cell phone numbers serves no useful governmental purpose and could ultimately discourage individuals from subscribing to local government news, notification services, or emergency alerts for fear of being subject to identity theft or cyber security attacks or “spamming.”

PIA Reform for the Release of Social Security Numbers and Dates of Birth

Identity theft has become a major problem globally and two key pieces of data that allow the crime to take place include a person’s social security number and date of birth. Yet both of these pieces of data can be accessed through a PIA request. Providing such information to someone who is not a person of interest serves no public interest or transparency purpose and should be prohibited in light of the significant criminal and financial risks disclosing the information could pose.

Useful Links

Interim Report of the OAG on the Implementation of the PIA (2016-12)

HB 755/ SB 695 of 2015

OAG PIA Webpage

MACo Urges Urban/Rural Balance On Aligning For Growth Options

MACo offered its initial thoughts on two extremely preliminary options for Maryland’s pending “Aligning for Growth” (AfG) policy in a comment letter (2017-09-15). Maryland must address onsite sewage disposal system (OSDS or septic system) and stormwater water pollution generated by new growth as part of its Phase III Watershed Implementation Plan (WIP) under the Chesapeake Bay Total Maximum Daily Load requirements.  As previously reported and described on Conduit Street, the two potential options are: (1) an OSDS/Forest Conversion Option; and (2) a Phase I and II WIP Per Capita Loading Option. MACo offered three basic comments in its letter:

 

Comment #1: More detail is needed about each option before a definitive opinion can be formed.

From a county perspective, each option has advantages and drawbacks but the initial proposals lack sufficient detail to fully consider their merits. For the OSDS/Forest Conversion Option, baseline determination remains an issue as does potential septic loading rates. Additionally, some allocation would need to be provided for septic systems (See Comment #2).

The Phase I and II WIP Per Capita Loading Option is predicated on loading maps that do not yet exist and could put certain counties and municipalities at a significant disadvantage regarding growth and economic development. It is also questionable, with respect to its potential complexity, to administer. Both options need to better define local government flexibility in assigning allocation.

Comment #2: The AfG policy must treat urban and rural growth equitably.

MACo cannot support an AfG policy that has a stormwater component so prohibitive that it essentially eliminates urban infill, redevelopment, or revitalization projects; or a septic component so prohibitive that it essentially eliminates rural economic development or residential growth. Both the stormwater and septic sectors should receive growth allocations and neither should be marginalized. Regardless of the option chosen, the AfG policy must acknowledge the different growth needs and patterns of the state.

Comment #3: Further development of the AfG options must be done collaboratively with local governments.

It is imperative that the State continues to work collaboratively with both counties and municipalities, whether it is to further develop the two options referenced in this letter or create a new option not currently under consideration. Local governments will be critical partners in the success or failure of AfG and our participation and support will ultimately be necessary for the administration of a viable and sustainable AfG policy.

 

Useful Links

Conduit Street Article Describing Two Proposed AfG Options

Prior Conduit Street Coverage on AfG Policy

 

Would State Block Grants Deliver Health Insurance Reform?

With the US Senate again considering a fast-track vote on legislation to repeal the Affordable Care Act (ACA), much national attention has focused on a key notion in the proposed Graham-Cassidy Amendment: offering states “block grants” to offset health care costs, but without the prescriptive elements of the ACA.

Don Kettl, Professor at University of Maryland’s School of Public Policy, offers his take on this matter in an article on the Route Fifty website:

There’s a basic assumption in the Graham-Cassidy health care bill. It would slash federal cash for the states that didn’t expand their Medicaid programs under Obamacare by $180 billion, or 11 percent, by the year 2026. It assumes that new block grants for the states would allow them to find enough efficiencies to make up the difference.

That is a very, very tall order. What’s the evidence that the states would prove more efficient managers of health care funding than the feds?

Two things seem certain. One is that it’s going to be impossible for the states to make up the shortfall with greater efficiencies. The other is that we’ll end up with greater disparities in the health coverage that citizens get, as different states go down different roads to cope with the cuts.

Those favoring repeal-and-replace are deep in a corner from which there are few escape routes. But before pursuing the block grant strategy, which would load all the tough decisions onto the states, it’s worth looking carefully ahead at where this road would lead.

Looking specifically at the effect on Maryland, a state that expanded Medicaid eligibility based on the strong federal funding provided through the ACA to do so, Governor Hogan has opposed the current proposal in the Senate. From the Baltimore Sun coverage:

The governor released a statement emphasizing that the current law needs to be fixed, but he rejected the repeal measure sponsored by Republican Sens. Lindsey Graham of South Carolina and Bill Cassidy of Louisiana.

“Unfortunately, the Graham-Cassidy bill is not a solution that works for Maryland. It will cost our state over $2 billion annually while directly jeopardizing the health care of our citizens,” Hogan said. “We need common sense, bipartisan solutions that will stabilize markets and actually expand affordable coverage.”

This high-profile issue is pressing in several ways. Sources differ on the likelihood of a Senate floor vote being called next week, and the prognosis for the proposal’s passage remain very unclear. After the end of September (and the close of the federal fiscal year), the process of budget “reconciliation” closes, and a full 60-vote margin (to overcome an expected filibuster by opponents) would be practically required to enact any changes to federal health care law.

“This Land is Your Land” Bus Tour Highlights Role of Program Open Space

Partners for Open Space and the Rural Maryland Council is hosting a series of bus tours called “This Land is Your Land” across the state to highlight the importance and impact of the Program Open Space. The tours are open to county officials and are free, but registration is required.

 

Southern Maryland Tour (2017-09-28)

Time: 10:00 AM – 4:00 PM

Starting Point: Lawyers Mall, Annapolis, MD 21401

Register for Southern Maryland Tour

From the registration webpage:

Join us on the bus at Lawyers Mall at 10:00 am, and then sit back and enjoy a glimpse of preserved lands, parklands, and riverfront. We will travel down to the American Chestnut Land Trust, a Trust that has been caring for the land in a remarkable partnership with landowners and communities since 1986. From the Trust’s site on Parker’s Creek and Governor’s Run, we will cross the Patuxent River to beautiful Serenity Farm (site of early Native American settlements, John Smith’s Patuxent Journey, an early Colonial village, the British landing during the War of 1812, and much more!).

On the Farm, we will enjoy the bounty of the region, including locally sourced seafood, wine, and beer. Chat with noted historians and local agricultural innovators, discuss upcoming events with regional museum leaders, and visit an historic African American graveyard to hear the compelling tale of its discovery.

If you cannot make the bus tour but would still like to meet us for lunch, please let us know by registering for the lunch only option!

From Serenity Farm we will make our way back to Annapolis on the old roads, venturing into the Patuxent River Park at Jug Bay, and past preserved farmland and fields that have been worked since the beginning of Maryland. We return to Annapolis at 4:00 pm.

We look forward to seeing you! For more information contact Lucille Walker at 301-343-2771 or email lwalker@tccsmd.org.

 

Central Maryland Tour (2017-09-29)

Time: 10:00 AM – 3:00 PM

Starting Point: Friends of Orianda House, 1901 Eagle Drive, Baltimore, MD 21207

Register for Central Maryland Tour

From the registration webpage:

This tour begins at Leakin Park, one of the largest urban Greenspaces in the US. Tour the Orianda Mansion and adjacent chapel and learn about Program Open Space’s role in protecting these historic buildings and the outdoor education programs available in the park.

From there we will travel to Jerusalem Mills, an historic village located in Gunpowder State Park, the second most visited park in Maryland. Our tour then turns to productive agricultural land passing through vegetable farms, nurseries, and grain farms. We will stop at an historic Merryland Farm and see thoroughbred horses work out on a premier training track. Enjoy lunch at Boordy Vineyards to include produce from local farms, and some delicious Priegels Ice Cream.

If you cannot make the bus tour but would still like to meet us for lunch, please let us know by registering for the lunch only option!

We will return to Leakin Park by 3:30 pm.

For more information contact Ann Jones at 443-690-8420, or email ann@partnersforopenspace.org.

 

Eastern Shore Tour (2017-10-13)

Time: 9:00 AM – 4:00 PM

Starting Point: Lawyers Mall, Annapolis, MD 21401

Register for Eastern Shore Tour

From the registration webpage:

The “This Land is Your Land” Bus Tour of the Eastern Shore is Friday, October 13, 2017 and will leave from Lawyers Mall in Annapolis, MD.

Visit the brand new Harriet Tubman Underground Railroad Visitor Center, hear how Program Open Space has helped a Easton Farmer become the President of the U.S. Wheat Association, visit a local winery that is possible in part thanks to Maryland Agricultural Land Foundation funds, and hear about what will be Maryland’s newest State Park. Lunch will be served at the Eastern Shore Conservation Center, in Easton, MD, and speakers will be throughout the day. The trip will be back to Annapolis before 5pm.

If you cannot make the bus tour but would still like to meet us for lunch, please RSVP!

For more information, contact Josh Hastings at 410-251-5268 or jhastings@eslc.org.

Useful Links

Partners for Open Space Website

Rural Maryland Council Website

 

Will Criminal Justice Reform Reappear on Congressional Agenda?

In 2016, advocates of major reforms in criminal sentencing thought a rare bipartisan deal might bring dramatic reforms to light. That possibility fizzled out, but may be put back into play this year by two US Senate sponsors.

The changed landscape with a new Executive Administration, and a new tone from the US Department of Justice, has left reform supporters unclear of the next steps for the issue.

According to Reason, a libertarian-leaning news and information site, the bill’s two sponsors intend to reintroduce it this year:

The Sentencing Reform and Corrections Act, originally introduced by Sens. Chuck Grassley (R-Ia.) and Dick Durbin (D-Il.) in 2015, would reduce the mandatory-minimum sentencing guidelines for repeat drug offenders without serious violent felonies and would broaden the “safety valve” exception to federal mandatory minimum sentences. It would also add new mandatory minimum sentences for interstate domestic abuse and for providing support for terrorists, while strengthening penalties for certain other crimes.

Grassley and Durbin say they will reintroduce the bill this year, although they did not say when.

“While the political landscape in Washington has changed, the same problems presented by the current sentencing regime remain,” Grassley said in a statement, “and we will continue to work with colleagues in Congress and the administration, as well as advocates and members of the law enforcement community, to find a comprehensive solution to ensure justice for both the victims and the accused, and support law enforcement in their mission to keep our communities safe.”

Read more on the Reason blog.