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It’s Back! Governor Revives SDAT Cost Shift To Counties

The Governor’s “Budget Reconciliation and Financing Act” (HB 161) revives an attempt (unsuccessful last year) to shift nearly all costs of the State Department of Assessment and taxation onto county governments.

As with past versions of this proposed shift, the bill would leave counties simply footing the bill for whatever costs are incurred by the state-managed Department. Also, this year’s bill shifts the costs of the “Office of the Director” as well as the actual assessment functions. The text of the proposed change is on page 17 of the BRFA bill.

MACo has aggressively resisted this cost shift, and successfully got it removed from the state’s fiscal plan during the 2017 session. A similar effort appears to be required this year.

For more history, see previous Conduit Street coverage (in thrilling chronological order):

[FY18] Budget, First Look: Counties To Fund Most Of SDAT; Most Formulas Capped

[2017 session] House Votes Down SDAT Cost Shift

SDAT Cost Shift Dead

Maryland Receives Federal Approval of New School Improvement Plan

The U.S. Department of Education has approved Maryland’s plan for the Every Student Succeeds Act (ESSA), the federal law requiring state action on school improvement.

According to a press release,

Allowing states more flexibility in how they deliver education to students is at the core of ESSA. Each state crafted a plan that it feels will best offer educational opportunities to meet the needs of the state and its students.

The following are some of the unique elements from Maryland’s approved plan as highlighted by the state:

  • Awards credit for elementary school students completing a well-rounded curriculum as measured by the percentage of students passing social studies, fine arts, physical education and health.
  • Supports low-performing schools through innovative strategies based on collaboration between local school districts and the state, including providing access to leadership coaches for school leaders at low-performing schools in order to give guidance on the implementation of school improvement strategies.

“Maryland’s efforts, built on strong stakeholder input, are based on the belief that each child is important and deserves the highest quality education program,” said Maryland State Superintendent of Schools Karen Salmon. “We appreciate the support of the U.S. Department of Education, and we will continue our school improvement work with a focus on preparing every student for college and career.”

Read the full press release for more information.

MACo Legislative Committee Meeting to Take Place as Scheduled

MACo’s Legislative Committee will hold their first meeting of the 2018 Maryland General Assembly Session today (January 17) as scheduled, despite a slightly snowy Wednesday in Annapolis. Subcommittees will meet at 10:00 am and the full Committee will meet at 10:30 am.

The Committee, which comprises representatives from all 23 counties and Baltimore City, meets weekly during the Session to decide MACo’s policy positions.

Governor Announces FY19 Budget Proposal

Governor Larry Hogan announced at a news conference on Tuesday afternoon that he plans to submit his budget tomorrow, in accordance with State law. He announced that the budget will include record funding for K-12 education, full funding for Program Open Space, and nearly $1 billion in cash reserves. He stressed that his budget includes no new taxes, cuts to services, or raiding of special funds – and is 100 percent structurally balanced.

He committed $230 million for local roads, which is about 8 percent greater than last year. His published statement provides that this includes $178.1 million in highway user revenue funds, and $53.7 million in capital grants to local jurisdictions. He also agreed to work the legislature to restore infrastructure funding for local governments.

Governor Hogan faulted the General Assembly for attempting to pass along $2.8 billion in new spending mandates last session. He pledged to once again submit legislation providing mandate relief.

Currently, 84 cents of every single dollar is mandated spending by the legislature.

He highlighted the following pecifics:

  • $6.5 billion for K-12 education – more than required by the legislated formula
  • An additional $140m in direct aid to schools
  • $365 million in school construction
  • $261 million for community colleges – 2 percent above last year
  • Five jurisdictions will receive $15.2 million to ensure that their direct K-12 education formula aid grows by at least $100,000: Baltimore City ($11.1 million), Cecil ($3.4 million), Calvert ($540,610), Carroll ($99,799), and Garrett ($47,626).
  • $10 million dedicated to increasing graduates in STEM-related fields
  • $10 million for job creation tax credits
  • $8 million Employment Advancement Right Now (EARN) Program
  • additional $13 million to address the opioid crisis
  • $55 million towards the Chesapeake Bay and Atlantic Coastal Bays 2010 Trust Fund
  • $7 million to recruit state correctional officers

He reiterated his commitment to submit legislation to hold Maryland taxpayers harmless from the negative impacts of federal tax reform.

See his detailed statement here.

 

Legislature Leadership Spearheading Tax Reform Mitigation

House Speaker Michael E. Busch and Senate President Thomas V. Mike Miller Jr. on Tuesday announced a package of bills designed to ease Maryland taxpayers’ increased tax burden resulting from the federal government’s tax reform package. The legislative package includes a proposed expansion of personal exemptions at the state level and a decoupling of the estate tax from the federal system.

Federal tax reform capping state and local tax (SALT) deductions at $10,000 will impact Marylanders more than the residents in any other state. The average SALT deduction claimed in Maryland is $12,931. Senate President Miller said the change results in “double-taxation on the people of Maryland.”

Speaker Busch said the federal law will “take away $680M in exemptions from Maryland.” According to President Miller, the General Assembly will “restore personal exemptions… so that [Marylanders] will continue to get the standard deduction provided under federal law, but on top of that [Marylanders] will be able to claim personal exemptions.”

Delegate James J. “Jimmy” Tarlau will sponsor a bill to decouple the Maryland estate tax from the federal estate tax, which, according to Delegate Tarlau, will protect Maryland from $60 million in lost revenue from an increase in the assets exempt from the federal estate tax.

Governor Larry Hogan has also announced his Administration will propose legislation this session to protect Maryland taxpayers from any negative impacts resulting from federal tax reform.

Stay tuned to Conduit Street for more coverage.

Useful Links

Previous Conduit Street Coverage: Local Tax Deduction Elimination: “SALT” In Maryland’s Wounds

Previous Conduit Street Coverage: What’s Going On With Tax Reform?

State of the Economy: “It Depends,” Of Course

Dan White of Moody’s Analytics briefed the Senate Budget and Taxation Committee on state of the economy on Tuesday afternoon.

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The bottom line: the economy is still good, and even has room to grow – but don’t expect that growth to last very long.

The next two years are going to be as good as they are going to get.

White said to expect 2.8 percent growth in 2018, and less growth in 2019 – though still above 2.5 percent. He advised the Committee to ensure that the State has a healthy Rainy Day fund balance to get through the decrease in economic activity anticipated for 2019-2020.

Economic growth is anticipated to result as early as this year in response to federal tax reform. However, many provisions of the tax reform bill expire after five years, after which point, further economic growth is uncertain. Ten years from now, economic growth is not anticipated to be significantly higher than it is today if tax reform provisions remain untouched. Higher inflation and interest rates could undo any growth experienced within the next few years.

The economy has room to grow. We can still increase employment, and today’s housing market is incredibly undersupplied. This in part results from the aftershocks of the housing bubble bursting, which has led to very cautious homebuilders. It can also result from the applicable labor supply diminishing.

Durable goods have been deflating for a few years in large part because of the decrease in costs for oil and gas. This not only affects transportation costs, but costs for plastics and other materials which include petroleum as an ingredient. This may be part of the reason that 31 states missed their sales tax projections by more than 1 percent last year.

The good news is that there is nothing to indicate that a bubble is forming today. The bad news is that bad things happen when there are no indications of bubbles. We have gone about a decade without anything bad happening yet, and that is a long time. Economists expect the economy to turn significantly around 2020.

U.S. Senate Hearing Focuses on Water Infrastructure Needs, Local Role

The National Association of Counties representative testifies before the Senate Committee on Environment and Public Works full committee hearing, “America’s Water Infrastructure Needs and Challenges.”

NACo Associate Legislative Director Julie Ufner testifies before the U.S. Senate’s Environment and Public Works Committee to discuss the role counties play in strengthening America’s water infrastructure, and the importance of the Water Resources Development Act to counties as they fulfill our water resources responsibilities.

MACo’s 2018 Summer Conference will focus on all the ways counties work with water. Mark your calendars and join us on August 15-18, 2018 to discuss “Water, Water, Everywhere.”

From the health of the Bay and Maryland’s waterways to the infrastructure, treatment, and regulations that ensure safe and healthy water flows through our pipes, county governments are keeping our residents afloat. Conference sessions will discuss the Bay, water infrastructure, watermen and oyster/fishery/habitat issues, floods and other natural disasters, and ways to put the wind back in the sails of a tight budget.

 

MDOT Opens Scoring Application Portal, Hosts Webinar 1/17

The Maryland Department of Transportation (MDOT) has opened up its online web portal to start taking applications from counties for consideration of including major transportation projects in its Consolidated Transportation Program (CTP). It is hosting a webinar on the new process and tool tomorrow, Wednesday, January 17 at 10 am.

MDOT created the scoring system in response to a requirement passed last session after Governor Larry Hogan and General Assembly leadership reached a compromise on Chapters 36 of 2016 and 30 of 2017 – aka, the Maryland Open Transportation Investment Decision Act of 2016, “Scorecard Bill,” “Transportation Transparency Bill,” or the “Roadkill Bill,” as amended.

The compromise requires MDOT to score all projects in its CTP, but it does not have to fund its projects according to the scoring system. The scoring model was finalized on January 1, 2018. MACo submitted comments on its concerns about the provisions in the proposal which penalize counties for failing to support proposals made by municipalities. However, MDOT opted not to change this portion of its model at this time.

Helpful Links

 

Inclement Weather Policy for MACo and Annapolis Meetings

annapolis snow As bad weather looms, and the legislative session is in full swing, MACo wants our members and meeting participants to have easy and timely access to information on Annapolis events. On any day with inclement weather, MACo will post information to the blog site on its policy for that day as early as possible — usually by 7:30 am.

Here are a few guidelines and procedures for events:

The General Assembly – Bill hearings, briefings, and other public events conducted by the General Assembly are very rarely canceled due to bad weather. The General Assembly’s website is a reliable source for any overall closures, and if MACo is aware of anything being delayed or canceled, we will post it on the Conduit Street blog.

MACo Meetings – For the MACo Legislative Committee and other meetings at the MACo offices, MACo staff will consult with Association leadership in determining a closure policy. Recognizing the statewide nature of the organization, we seek to be respectful of those who face substantial travel to attend these meetings — so our consideration will include looking at multiple regions of the state, not just the state of the roadways in and around Annapolis.

Please be aware, though, that cancellation of a Legislative Committee meeting will often lead to bill positions or other strategic considerations being delayed – and may trigger extraordinary procedures to direct MACo’s advocacy. Leadership and staff will seek to balance these needs against the travel concerns in making case-by-case decisions on meeting cancellations.

Frederick Employee Awarded Bloomberg American Health Initiative Fellowship

Frederick County Health Department’s Director of Behavioral Health Services, Andrea Walker, was awarded The Johns Hopkins Bloomberg School of Public Health and Bloomberg Philanthropies’ 2017 American Health Initiative Fellowship for her work regarding addiction and overdoses.

Andrea Walker, Director of Behavioral Health Services, Frederick County (photo credit Johns Hopkins Bloomberg School of Public Health)
Andrea Walker, Director of Behavioral Health Services, Frederick County (photo courtesy Johns Hopkins Bloomberg School of Public Health)

As announced by the fellowship program:

As the director of Behavioral Health Services for Frederick County, Walker oversees prevention programs and clinical services in a county that includes suburban and rural areas. In recent years, her role has begun to shift as the division she oversees moves from being strictly a direct service provider to also serving as the Local Addiction Authority. She oversees a staff of 85, only one of whom has an MPH degree. The Bloomberg Fellowship will better equip Walker to utilize data to survey community needs and develop comprehensive plans and programs to address addiction and overdose in her county, and will prepare her to launch a syringe exchange program.

The Frederick County Health Department provides public health services to a population of about 250,000. Like its counterparts around the country, the department is on the front lines of addressing the opioid crisis, and will be a key partner for the Bloomberg American Health Initiative in its work to find and promote innovative strategies for progress.

The website notes that the Bloomberg American Health Initiative was established by a $300 million gift from Bloomberg Philanthropies. In partnership with the Johns Hopkins Bloomberg School of Public Health, the initiative seeks to establish a network of public health practitioners, organizations and researchers to explore and progress in five priority areas: addiction and overdose, violence, environmental challenges, obesity and the food system, and risks to adolescent health.

For more information visit Bloomberg’s American Health Initiative.